Not So Fast, Capitalism

The triumphalism of capitalism can sometimes be hard to take. Platitudes such as "A rising tide lifts all boats" abound, rarely questioned except by the most astute among us, thereby excluding much of the MSM.

Fortunately, there are still people like Linda McQuaig to set the record straight on a recent claim in the NYT that life just keeps getting better today:

Amid growing criticism of extreme inequality, expect to hear lots more about how today’s capitalism is benefiting the world — especially next week when the global elite meets for their annual self-celebration in Davos, Switzerland.

It’s a powerful narrative. If capitalism is working wonders for humanity, maybe it doesn’t matter that a small number of billionaires have an increasing share of the world’s wealth.

But is the narrative true?

McQuaig suggests something other than capitalism is at work that has improved people's lives:

Life expectancy only began to improve towards the end of the 1800s — and only because of the public health movement, which pushed for separating sewage from drinking water. This extremely good idea was vigorously opposed by capitalists, who raged against paying taxes to fund it.

So sanitation, not capitalism, may be humanity’s true elixir.

Indeed, things only truly got better, says British historian Simon Szreter, after ordinary people won the right to vote and to join unions that pushed for higher wages and helped secure public access to health care, education and housing — again over the fierce objections of capitalists.

This suggests that it’s not capitalism but rather the forces fighting to curb capitalism’s worst excesses — unions and progressive political movements — that have improved people’s lives.

This is not to imply, however, that advocates of unfettered capitalism are helpless against such onslaughts of insight. While public polling suggests widespread, growing support for greater taxation of the wealthy, they have a potent threat in their arsenal:

Don’t even think of taxing us, because we’ll just move our money offshore.

The antidote to such extortionate tactics is suggested by Emmanuel Saez and Gabriel Zucman, economists at the University of California, Berkeley, in their book, The Triumph of Injustice:

... they argue that advanced nations could effectively clamp down on tax havens if they co-ordinated their efforts, just as they do in other areas, like trade policy.

Saez and Zucman point out there’s nothing to prevent advanced nations from simply collecting the corporate taxes that the tax havens don’t.

Recent reporting requirements make this possible. “It has never been easier for big countries to police their own multinationals,” they argue. “Should the G20 countries tomorrow impose a 25 per cent minimum tax on their multinationals, more than 90 per cent of the world’s profits would immediately become effectively taxed at 25 per cent or more.”

As always, there are solutions to the ills that plague us. What is in short supply, however, are politicians with the vision, integrity and backbone to implement them.