Capitalism is too important to be left to ... capitalists

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Capitalism is too important to be left to ... capitalists

Article by: DAVID STRAND
Updated: June 4, 2012 - 11:13 AM

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As an insider of a multinational corporation for 36 years, I have been rewarded by capitalism beyond what any average person could expect. It's a reality worth preserving.

But there is also a dark side of capitalism. When its excesses have been left unchecked, as they have been at times in our history and were again preceding the Great Recession, government leadership has emerged to save capitalism from itself.

It took the analyses of historians to appreciate what Presidents Theodore Roosevelt and Franklin Roosevelt accomplished. At the time of their courageous leadership, they were hated by business leaders. It is a classic case of the dogs of capitalism biting the hand that preserved their existence.

President Teddy Roosevelt (1901-09) first went after the giant railroad trusts, and his fight against them was upheld by the Supreme Court in 1905. Conglomerates in banking, sugar, fertilizer and other key commodities were dissolved along with transportation trusts. This "Rough Rider" Roosevelt also championed common people and environmental preservation, keys to his Fair Deal.

Teddy's cousin Franklin, another child of wealth with a love for public service, emerged in time to calm a panicked nation during the greatest economic collapse in our history, the Great Depression. FDR cleaned out the banking industry, put millions back to work and fashioned the elements of the New Deal. And he was even more hated by business moguls than Teddy was.

It turns out that capitalism is a marvelous creation for efficiently producing and distributing goods and services. It is the genius that unleashes creativity through human energy and effort. It satisfies the human need to build something, for people to say "this is what I accomplished."

Unfortunately, the previously mentioned dark side of capitalism is the outcome of a system without constraints, the necessary regulations that serve to check the negative consequences. The harm to society has been legendary. Examples are child labor, acid rain, rivers catching fire, destruction of our atmosphere's life-protecting ozone, lead poisoning, black lung disease, mountaintop removal, the dead zone in the Gulf of Mexico, toxic waste dumps, selling lethal tainted meat and produce, the destruction of urban rail transit systems, and lung cancer induced by cigarettes. This last example calls to memory the tobacco CEOs arrogantly telling Congress that "no, we don't believe cigarettes are addictive or cancer causing."

Even in the birthing contractions of American corporations, the 19th-century transcontinental railroads (see "Railroaded," by Richard White), corrupt promoters deliberately conned masses of immigrants into flooding the arid western United States by telling them "the rain will follow the plow." Of course it didn't, and human misery instead of prosperous agriculture visited early settlements that dried up and blew away with the wind.

You see, capitalism is too important to be left to the whims of capitalists. When Barack Obama took the oath of president, his inbox came straight from hell. Over the objections of a GOP that wanted government to imitate the disastrous inaction of Herbert Hoover, Obama and the Federal Reserve unfroze the panicked financial system and averted a collapse into another economic depression. The lessons of the 1930s were not forgotten.

These lessons again teach that the temptation to put a businessman in the White House should be rejected. It would be courting disaster.

Recently, U.S. Chamber of Commerce president Tom Donohue gave the president a C+ grade on his handling of the economy. Coming from that ardent conservative, it's almost like getting the Nobel Prize in economics.

And as some have observed, General Motors is alive and Osama bin Laden is dead.

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David Strand, of Aitkin, Minn., is a retired engineer and business executive.

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