Since the agriculturalists in the Fertile Crescent supplanted many of the hunter-gatherers some 12,000 years ago, those early stirrings of capitalism have become embedded in our DNA. I see it in preschool children.
Our foreign exchange student recalls when she was 4, learning from her dad about interest and how she gleefully lent him money to be paid back with the interest added on. I wonder if he also taught her about usury.
When we were in grade school, we neighborhood kids started a newspaper called the Washington Highway Times that we printed on a discarded mimeograph machine, while getting looped on the toxic fumes from the duplicating fluid. We sold it for five cents a copy to neighbors and used the money to buy candy at the Bijou Theater.
My niece began a thriving business at the age of 6, charging me a fee each time I used a “dirty” word at the dinner table. Surprised at how quickly her bill mounted up, I told her it was only fair that she provide me with a schedule of fines for the words I occasionally let slip. She did so.
Here’s her schedule and an invoice for her last visit.
Capitalism was a source of pride and well-being in Morrisville, the town I grew up in. As my Grandmother Elise would say, Saturday was “trading day” as she went off to do her shopping. Vibrant commerce of local goods and services imbued townspeople with a sense of community and a reasonable living. Shopkeepers were respected and shoppers were treated well so they would return.
As ownership began to consolidate and earnings were seduced by the Sears and Montgomery Ward catalogs, more local money took flight. Local shops began to dwindle, though some folks made the 90-minute trip to Burlington, where many shops still survived.
Merle Wood’s Forest Hill Factory Outlet was the first major discount store in Vermont, and I remember as a UVM student relying on Merle’s “three pounds for a dollar” hamburger meat that, rumor had it, was one-third day-old ground-up Bunny Bread. Good, though, and Merle was a local boy.
By the end of the millennium, newcomer Amazon had shipped 20 million items to 150 countries around the world. E-commerce was established. The result: Small rural communities had lost many of their local retail stores.
Across all sectors — energy, consumer goods, groceries, pharmaceuticals, defense, transportation, entertainment, construction, agriculture — ownership consolidated into larger and larger entities owned by fewer and fewer people.
Along with commerce, wealth consolidated and gave us the most significant polarity of wealth since the days of the robber barons at the end of the 19th century.
But, betraying his lofty class, Republican Teddy Roosevelt took on the monopolies and became famous as the first “trust-buster.” His weapon was the Sherman Anti-Trust Act of 1890, which declared all mergers “in restraint-of-trade” as illegal.
For the first decade, the new law was largely ignored by the U.S. courts in favor of businessmen like J.P. Morgan, who owned most of the railroads, or the Havemeyer family, which owned the sugar industry. But Teddy persisted and went after trusts that abused workers, docked wages, and killed union organizers.
Three decades later, Teddy’s fifth cousin, FDR, began a subsequent effort to address a resurgence of monopolies, along with the concentration of wealth in fewer and fewer elite families. His April 29, 1938, speech to Congress on curbing monopolies is worth reading today, 85 years later. Its message is eerily prescient.
“To the Congress:
Unhappy events abroad have retaught us two simple truths about the liberty of a democratic people.
The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is Fascism — ownership of Government by an individual, by a group, or by any other controlling private power.
The second truth is that the liberty of a democracy is not safe if its business system does not provide employment and produce and distribute goods in such a way as to sustain an acceptable standard of living… ”
Here at home, the healthy exercise of capitalism is vital to the well-being of our many small communities. But without clear rules of the road, accountability and enforcement, it can indeed become a serious threat to democracy and humankind.
The increasingly repudiated Friedman Doctrine that “the social responsibility of business is to increase profits and maximize returns to shareholders” and that “a company has no social responsibility to the public or society,” as expressed in a 1970 essay in The New York Times that might have been written by the robber barons themselves, was the plenary indulgence that blessed business consolidation again into monopolies over the next 50 years, fueling the present and dangerous concentration of wealth.
Is there a Roosevelt in the house?
Today, as in the past, the moral dichotomy of politics is whether it is a commitment to community service and well-being or to the personal accretion of power and wealth. We see this ambiguity playing out daily in the politics of our country and of Vermont.
The consolidation of banks, health care institutions, filling stations, agricultural interests, Pharma and retail chains goes largely unregulated.
Lobbying interests spent just shy of $4 million within Vermont last year and just shy of $4 billion nationally to ensure that legislation counter to their interests does not see the light of day or emerges neutered and ineffective.
In the first nine months of last year, Pharma spent $22.4 million lobbying against Democratic efforts to reverse the Pharma-generated law making it illegal for the government to negotiate and lower volume drug-pricing. In the end, Pharma bought off three Democratic senators (Tom Carper, Kyrsten Sinema and Robert Menendez) and the effort failed, making America yet again an outlier in the world. Virtually all countries negotiate national drug pricing with American producers.
Add to that our lack of a national health care system, paid family leave, and any universal child care system, and you have true “American Exceptionalism.”
Here at home, retiring Secretary of State Jim Condos and his deputy, Chris Winters, who is running to succeed him, have worked tirelessly for a decade to try to embed in law a functioning ethics culture, code and enforcement authority in Vermont. As a columnist, I have written and testified in favor of this.
We are one of only five states with no statutory ethics code. Apparently, the threat of an enforceable ethics canon in Vermont is too much a threat to politicians who see politics as an opportunity for self-service.
On March 25, the Vermont Senate unanimously passed a bill to create a code of ethics. Not unexpectedly, the bill gives the Vermont Ethics Commission the right to “review” but not investigate or redress violations.
If we really believed that the key responsibility of political service is the social and economic well-being of our communities, we would provide and enforce ethical guidelines for the behavior of our politicians. We would provide strategic outcome-based regulation (as opposed to micromanagement) and regulate the vibrant capitalism that has allowed our citizens and communities to thrive.
Capitalism and public service are indeed the drivers of well-being and community cohesion. But with no clear rules of the road, no serious regulation focused on that goal, we may soon witness democracy’s endgame.