Joe Biden Fixes Capitalism In 31 Short Pages

Maybe it’s just me, but it feels like every other speech and soundbite emanating from top Democrats amounts to a roundabout apology for countenancing the many perils of predatory capitalism.

On Friday, during remarks coinciding with a new executive order aimed at promoting competition across the world’s largest economy, Joe Biden called himself a “proud capitalist.” He added a caveat. “Capitalism without competition isn’t capitalism,” he said. “It’s exploitation.”

With apologies to the president, capitalism without exploitation isn’t capitalism either. In fact, capitalism is almost synonymous with exploitation. Show me a capitalist who isn’t currently (as in, right now, this second) exploiting something (or someone), and I’ll show you a capitalist who’s either already failed and just doesn’t know it yet, or else on the way to failing.

“Without healthy competition, big players can… charge whatever they want and treat you however they want,” Biden went on to lament.

To be sure, Biden said quite a few things right on Friday, during the signing ceremony. For example, he dated the onset of predatory capitalism to the Reagan Revolution and described the last four decades as a “failed experiment” in “letting giant corporations acquire more and more power.” The order will purportedly start the process of “revers[ing] these dangerous trends,” as he put it.

You can read the order (all 31 pages of it) for yourself here. In essence, Biden is directing (or asking) multiple federal agencies to crack down on the tech, agriculture and drug industries in a bid to help solve “the problem of economic consolidation,” which the order says “endanger[s] our ability to rebuild and emerge from the… pandemic with a vibrant, innovative and growing economy.”

Billed as a kind of holistic, “whole-of-government” approach, the White House imagines the order will make American capitalism “work for the people.” That, as opposed to the current state of affairs, in which the people work for capitalism.

I doubt seriously that this order will be efficacious. The sentiment is nice, but when it comes to reining in giant corporates that accumulated too much power, there are really only three approaches with any hope of success. One is to sue them and hope for a landmark, precedent-setting victory. Another is to pass new laws. The most effective approach is only available to autocrats like Xi Jinping, who rely on the (implicit, but highly credible) threat of physical violence to compel offending corporates to rectify their “wrong behavior.” China is currently engaged in just such a dance with its own home-grown tech giants.

Some economists contend that many of the provisions of Biden’s order will help the US economy in the long run. That may well be true. But, coming full circle, Americans are still in denial about capitalism. It’s exploitative by nature and the notion that it works best when markets are totally “open and fair” (Biden’s words) is a patent falsehood.

As Immanuel Wallerstein reminds us, in a totally free market, “it would always be possible for the buyers to bargain down the sellers to an absolutely minuscule level of profit and this low level of profit would make the capitalist game entirely uninteresting to producers, removing the basic social underpinning of such a system.”

The system needs quasi-monopolies to function. And only a strong state can support quasi-monopolies (think: patents, subsidies, tax incentives and protectionist measures).

Ironically, the only people willing to come out and say that American-style capitalism just isn’t working are some of the country’s most successful capitalists. As Ray Dalio put it during a testy exchange with CNBC in 2019, “One way or another, you’ve got to engineer the goddamn thing to get results.”

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6 thoughts on “Joe Biden Fixes Capitalism In 31 Short Pages

  1. In 1970 President Nixon ordered the CIA to “make the economy scream” in Chile to “prevent Allende from coming to power or to unseat him.” During the late 1970s our screaming economy unseated President Carter and resulted in Reagan’s election. If history rhymes, we have $200/barrel oil in our immediate future as the empire strikes back.

  2. Here is a little story about (generally) wealthy democrats that I find not only amusing, but a good example of the hypocrisy of political parties.
    In 1999, the Aspen city council passed a resolution to petition the US Congress and President Clinton to restrict US immigration. Aspen residents cited concerns about the environmental impacts of increased immigration on their community, including urban and suburban sprawl, pollution from the older automobiles typically driven by immigrants, and litter accumulating in the mountains attributable to the increasing population. The impetus for the resolution was the increasing number of trailer parks that housed the migrant workers employed locally in the service sector and ski industry. The parks were perceived to be degrading to the town’s image, property values, and environment.
    In Colorado, Aspen deems itself as the ultimate within the Democratic party. Using environmental reasons to get rid of immigrants and trailer park housing is not honorable. Nothing against Aspen, I enjoy visiting there- but I can not trust any large, organized political party at this point.
    No wonder many Americans are “independent” voters.

    1. I don’t remember the year exactly but around the same time the Aspen rich were doing their thing the “salt of the earth” members of the downtown retail owners council in Cedar Rapids got together and decided there were too many new upstart business starting up in “their” downtown. They all signed a petition to the city council to pass a law granting these noble capitalist retailers absolute veto power over any new business formations they didn’t like so they could control their precious competitive environment. Sensibly, the city council showed them where they could get off.

  3. Thanks for providing this space, H.

    It’s a start. I reckon Joe B. and his advisors are still evolving their ideas about this (and other issues). But he has one advantage, which to many seems to be a shortcoming: He’s pushing 80! He has seen it all. I don’t think he gives a damn about distractions. To the extent he focuses on what’s important to the country, he does well. Off the subject – I’m looking forward to modest increases in corporate taxes that can be spent on sorely needed infrastructure improvements. Rather than just buying back their stock, modest corporate tax increases will benefit all of us, including corporates.

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