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Shelton A. Gunaratne, Published February 18 2012

American ‘capitalism’ is a hybrid

Three replies have appeared in response to my opinion piece published in The Forum on Jan. 15. The latest response (Feb. 2) is from Rep. Wes Belter, R-Mapleton, N.D., who accuses me of expounding my “dislike for the American free enterprise system.” He gloats, “Only in America could a professor express his disdain for the system that pays his check without reprisal.”

Thus, instead of countering the points I raised, he goes off tangent to vilify me personally as an ingrate who doesn’t respect his paymaster.

He is wrong when he claims that only America offers the freedom to express disdain of the system that pays the critic’s bills. I refer him to the 2012 annual press freedom index of Reporters Without Borders, which placed the United States behind 46 other countries.

Belter presumes that America has a free enterprise system. Wrong.

Define it first

I agree with Rep. Bette Grande, R-Fargo (The Forum, Jan. 23) that America has never been a free-enterprise capitalist system, which she sees as the panacea for all our economic woes. On the contrary, I see full-fledged free-market (laissez faire) capitalism as an unworkable extreme just like the Marxist utopia of communism.

Protagonists of capitalism in The Forum debate are trying to do so without defining capitalism.

No consensus exists on the precise definition of capitalism. Economists usually use the term to emphasize the degree that government does not have control over markets (laissez faire) and on property rights. The many variants of capitalism include mercantilism, free-market capitalism, social market economy, state capitalism, corporate capitalism and mixed economy.

I argue that free-market capitalism is a mere theoretical construct that no country has ever implemented just like its opposite, communism in the Marxist sense. The economic system of a country reflects the interaction of elements of the two extremes existing as a continuum.

I submit that a free-market capitalist system can operate only under the law of the fish (matsya nyaya), which justifies the powerful few (the sharks) devouring the powerless many (the smaller fish) in quest of ceaseless profit-accumulation. Buddhist philosophy says that greed (tanha) leads to sorrow (dukkha).

A hybrid

The American system is a hybrid of corporate (crony) capitalism and mixed economy. A country that supports rich farmers with huge agricultural subsidies (about $20 billion per year) and allows the super-rich a lower tax rate than those in the middle class is by no means a free enterprise system. With an astounding national debt of $16 trillion, America is in sorrow.

I am not against capitalism, but against the sordid state of affairs that corrupt (crony) capitalism has wrought. Thomas Hanson, in his response (The Forum, Jan. 19), argues that capitalism has produced “generous benefactors who willingly share their success by donating millions to local colleges.” He threatens to speak with his pocketbook by not giving to the university that I “represent.” My opinion piece has nothing to do with Minnesota State University Moorhead, the university from which I retired in 2007.

I acknowledge that in 2010 private donations to American colleges and universities totaled $28 billion, the same amount as in 2006. Credit should go to people like Hanson. However, he is barking up the wrong tree when he speaks about his pocketbook as a threat to prevent others from criticizing whatever he means by “capitalism.”

Free market?

If the Republicans stand for genuine free enterprise, they could start with the abolition of farm subsidies and the tax breaks for the super-rich.

Finally, it is wrong for the Republicans to claim never-existed “free-market” capitalism as “the heart and soul of America” without answering the primary criticisms associated with capitalism and democracy, including social inequality, unfair distribution of wealth and power; tendency toward market monopoly or oligopoly and government by oligarchy.

Gunaratne is professor emeritus of communications, Minnesota State University Moorhead.