Mom and Pop Capitalism?
by John Spritzler
Originally written in 2014
[Libertarians: please read about the nation of Libertaria--a Libertarian Paradise]
[Also related: "The U.S. Constitution: Help or Hindrance?"]
[Read this to see that "the good old days" of early capitalism were horrible]
That there is something very wrong about American society today is clear to growing numbers of Americans. But what exactly is wrong? On this there are lots of different opinions.
Mom & Pop Capitalism, as Advocated by Some Conservatives
Libertarians like Congressman Ron Paul, [the late] Justin Raimondo (of antiwar.com) and Alex Jones (of PrisonPlanet fame) say that what's needed is to restore America as "a republic, not an empire."* They talk about the good old days when the Constitution was honored, when our foreign policy followed George Washington's advice to avoid meddling in the affairs of other nations, when we had "true capitalism" with small government, no military-industrial complex, and capitalism was about entrepreneurs producing good products, not bankers speculating as parasites on the productive economy.
Theirs is a vision of a "mom and pop" capitalist world that is very attractive. People are friendly and honest. The competition is about making "a better mouse trap," not "dog-eat-dog" competition to pit workers against each other in a race to the bottom. Furthermore, the competition is fair, with equal opportunity to succeed (i.e., get richer than other people) regardless of race or gender or ethnicity, etc. Nobody is extremely rich or poor. The needs of all are met, for the most part at least. It is not hard to see why decent people are attracted to these ideas.
Mom & Pop Capitalism, as Advocated by Some Liberals
Some liberals, such as Robert Reich most famously, want the same "Mom & Pop" capitalism that the conservatives dream of. In contrast to the conservatives, however, who think the way to get it is with less government, these liberals say the way to get it is with more government, specifically with more government regulation of capitalists to force them to behave nicely.
The Problem with Mom & Pop Capitalism, Be it Liberal or Conservative
The problem, however, with "mom and pop" capitalism--regardless of whether it is obtained with more or with less government--is the principles on which it is based and the kind of social relations that follow from those principles, and the dynamic that these set into motion. The principles are those of capitalism: capitalists own the means of production and their hired workers do not; people compete against each other instead of working for shared goals; instead of making the welfare of everybody the purpose of the economy, products and services are produced only to be sold for profit to those who can afford to buy them; it is considered natural and proper that some people are wealthier than others and should enjoy the benefits of socially produced wealth more than others.
When a society is organized around these capitalist principles, it inevitably enables some individuals, like the original John D. Rockefeller, to emerge and transform it eventually from a "mom and pop" world to a world of extreme inequality and corporate disregard for the values that decent people cherish. Mom and pop capitalism always and everywhere grows into corporate capitalism. This is the inevitable logic of the system that has landed us where we are today.
In the beginning of this process, the individuals like Rockefeller enjoy legitimacy and freedom of action because they operate within the principles of capitalism. Some of them, due to cleverness or luck, get a bit wealthier than most people. The competitive logic of capitalism cannot fail to produce winners and losers, and drive the winners to compete against each other resulting in ever wealthier and fewer winners. They buy up other companies until they dominate the industry, such as oil or railroads or the latest technology, whatever it may be. With this economic power they gain increased power over the government as old John D. did, and as the railroad barons who had the government give them vast tracts of public land did. Soon the economic and political power of the biggest winners dominates the land. The risings to power of the Rockefellers and of our present day plutocracy and of the military-industrial complex with its wars based on lies and of vampire bankers like Goldman-Sachs were not flukes; they were the full development of the social dynamics of a long ago seemingly benign "mom and pop" capitalism.**
Creating (or re-creating) "mom and pop" capitalism does not get to the root of the problem, which is capitalist social relations. Trying to make a truly better world based on equality and mutual aid by creating "mom and pop" capitalism is like trying to rid a lawn of crabgrass by merely mowing the weeds down instead of uprooting them entirely. It may produce a lawn that doesn't look too bad initially, but the roots of the weeds remain and will eventually make the lawn ugly again.
Capitalism itself needs to be replaced by something very different, and this will require a fundamental social revolution--an egalitarian revolution. A new egalitarian kind of economic system needs to be created based on the principle that people contribute according to reasonable ability and take according to need or reasonable desire, in a moneyless society in which things are shared, not bought and sold, as described here with a more brief introduction here. And a new conception of democracy needs to emerge (described briefly here), in which lawmaking power exists only at the local level in assemblies in which all who live or work in the local community and who support equality and mutual aid--and only they--have the right to attend, with social order on a larger scale deriving from voluntary federation of local communities and workplaces, as discussed in the previous links.
As is becoming increasingly obvious to the American public, the problem in our society is a very big problem. And very big problems require very big solutions. Mom and pop capitalism is not a big enough solution to work.
What about Social Democracy?
Social democracy is simply capitalism at a moment in time when ordinary people (who want a more egalitarian society) have, by one means or another, forced the capitalist class to enact substantial reforms that benefit ordinary people. The existence of these reforms, however, does not mean that the conflict between the anti-egalitarian capitalists versus egalitarian working class people has disappeared. The capitalists continue to try to make society more unequal and undemocratic and if ordinary people are not vigorously fighting to make society truly egalitarian the anti-egalitarian forces will prevail.
Indeed, the anti-egalitarian forces are currently prevailing in the nations called social democracies, as I discuss in these articles:
"Class Inequality Soars in "Social Democratic" Germany"
"DENMARK: A CLASS CONFLICT BATTLEGROUND"
Not Nonviolence, But Class Struggle--Often Violent--Made Norway's Rulers Grant Big Concessions
"Why They're Rioting in Sweden"
"The 'Iceland Did it Right' Myth"
"The Problem with Democratic Socialists of America"
What about Big (not Mom and Pop) Capitalism but with Equal Opportunity?
Some conservatives, such as Jordan Peterson, argue that the problem with our Big Capitalism today is that it does not truly provide equal opportunity and instead--with liberal policies characterized lately as 'woke'--denies equal opportunity (to get richer than others). This, they say, prevents the best people from making our capitalist economy maximally productive, which in turn harms the poorest people in the world. For the sake of making life better for the poorest people, these conservatives argue, we need Big Capitalism with equal opportunity. These conservatives characterize the 'woke' policies as policies designed to achieve equal outcomes instead of equal opportunity; they say this is wrong and actually harmful to the poorest people.
These conservatives virtually never acknowledge the fact that the egalitarian kind of an equal-outcomes society is not at all the same as the Marxist societies such as the Soviet Union, which were indeed both ugly and fundamentally anti-democratic and much less productive than capitalist societies. In contrast to Marxist societies, however, the egalitarian equal-outcomes one that existed in half of Spain in 1936-9 economically outperformed--produced more than!--the capitalist society it replaced, as you can read about in detail here. When there are some rich and some poor, there inevitably is terrible oppression, as discussed and illustrated in detail here.
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* Part of the "A republic, not an empire" thinking includes the idea that the problem in the United States is that we no longer obey the Constitution. But as this article explains, the Constitution itself is part of the problem because it requires class inequality.
** In 1835 the French aristocrat, Alexis de Tocqueville, travelled extensively in the United States and wrote the famous book, Democracy in America. The great flaw in this book (and the reason the American upper class loves it so much) is that de Tocqueville characterized the United States as a society where everybody was equal--despite the fact that some were very rich and others very poor--on the grounds, simply, that, unlike in Europe, there was no hereditary aristocracy with inherited privileges denied to others under the law. Nonetheless, de Tocqueville noted that there was a kind of aristocracy in the United States: the manufacturing capitalists were essentially aristocratic masters over their workers.
De Tocqueville first describes the relation between the capitalist and the workers in a manufacturing plant that uses division of labor as it must to be competitive:
“Whereas the workman concentrates his faculties more and more upon the study of a single detail, the master surveys a more extensive whole, and the mind of the latter is enlarged in proportion as that of the former is narrowed. In a short time the one will require nothing but physical strength without intelligence; the other stands in need of science, and almost of genius, to insure success. This man resembles more and more the administrator of a vast empire—that man, a brute. The master and the workman have then here no similarity, and their differences increase every day. They are only connected as the two rings at the extremities of a long chain. Each of them fills the station which is made for him, and out of which he does not get: the one is continually, closely, and necessarily dependent upon the other, and seems as much born to obey as that other is to command. What is this but aristocracy?”
— Democracy in America (Fully Illustrated with Author Biography) by Alexis de Tocqueville
Then de Tocqueville explains why, despite this new kind of manufacturing aristocracy being, in his words, "one of the harshest which ever existed in the world," he does not fear that it will ever become a serious problem in the United States, because manufacturing involves such a small proportion of the American population.
“As the conditions of men constituting the nation become more and more equal, the demand for manufactured commodities becomes more general and more extensive; and the cheapness which places these objects within the reach of slender fortunes becomes a great element of success. Hence there are every day more men of great opulence and education who devote their wealth and knowledge to manufactures; and who seek, by opening large establishments, and by a strict division of labor, to meet the fresh demands which are made on all sides. Thus, in proportion as the mass of the nation turns to democracy, that particular class which is engaged in manufactures becomes more aristocratic. Men grow more alike in the one—more different in the other; and inequality increases in the less numerous class in the same ratio in which it decreases in the community. Hence it would appear, on searching to the bottom, that aristocracy should naturally spring out of the bosom of democracy. [my emphasis--J.S.] But this kind of aristocracy by no means resembles those kinds which preceded it. It will be observed at once, that as it applies exclusively to manufactures and to some manufacturing callings, it is a monstrous exception in the general aspect of society.”
— Democracy in America (Fully Illustrated with Author Biography) by Alexis de Tocqueville
“I am of opinion, upon the whole, that the manufacturing aristocracy which is growing up under our eyes is one of the harshest which ever existed in the world; but at the same time it is one of the most confined and least dangerous.”
— Democracy in America (Fully Illustrated with Author Biography) by Alexis de Tocqueville
Clearly de Tocqueville, while correctly observing that capitalist aristocracy was "one of the harshest which ever existed in the world," was very wrong in thinking that it would remain "one of the most confined and least dangerous." De Tocqueville did not grasp that this harsh aristocratic (i.e., class inequality) seed, so to speak, was destined to grow to the obscene enormity that we are living under today. This is the nature of tiny seeds; they grow to be very large organisms if they exist in favorable conditions without people deliberately ensuring that they do not flourish.