Newspaper article MinnPost.com

Our Economy and Democracy Thrive Best with an Evolving Mix of Socialism and Capitalism

Newspaper article MinnPost.com

Our Economy and Democracy Thrive Best with an Evolving Mix of Socialism and Capitalism

Article excerpt

A few weeks ago Merriam-Webster Dictionary announced its most popular word of 2012 -- a tie between capitalism and socialism.

This is both telling and unfortunate, as it symbolizes the country's simplistic political imagination and faulty rhetoric about our political economy.

Too often, our political commentary falsely presents capitalism and socialism as a choice with a single winner in a game of two -- the capitalists versus socialists, like a football game hinging on electoral field goal kickers. Close observers of the nation's history, however, know that our economy and democracy thrive best with an evolving mix of socialism and capitalism.

A continuing puzzle

Both the Declaration of Independence and Adam Smith's "An Inquiry in the Nature and Causes of the Wealth of Nations" were published in 1776. Rather than a zero sum competition between socialism and capitalism, the nation's founders and Smith embraced elements of a mixed economy. Since then, the question of how to balance cultural values of meritocracy and social egalitarianism is a puzzle we continue to address.

The past century illustrated that upward economic mobility and the associated American dream are enhanced and furthered by healthy doses of public and private sector involvement and investments in things like education, food security, health insurance, civil rights, housing and infrastructure. Over time, we all do better when more do better.

However, the Hollywoodized rags-to-riches individual capitalist story of the American dream and economic mobility is like a proverbial rabbit leading greyhounds around a track. It's there, but remains unreachable for most people -- especially those born into poverty and those without a college education.

President John F. Kennedy's aphorism "a rising tide lifts all boats" was originally used to justify federal spending on hydroelectric dams. Subsequently, supporters of supply-side economics have cited Kennedy's metaphor as grounds for reducing the top tax rates on the wealthy wherein some of gains of the rich would eventually trickle-down. Yet the most recent economic data reveals only limited trickling.

Under President Barack Obama, the top 1 percent of earners (those who earn more than $352,000 per year) took in 93 percent of the additional income created since the end of the recession. …

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