Column: America should restructure its capitalism, not change it


Courtesy of Creative Commons

Adrian Tolstoy, columnist

Many Americans feel as if the system is rigged against them. In fact, only 17 percent of the population trusts the U.S. government. What might be the reason for this distrust? Partially the unreasonably staggering inequality: while some people within one corporation struggle to make ends meet, people working the same hours within the same office live in absurd wealth. For example, the average CEO makes 287 times as much as the average worker. Another elucidate example is the Walton family, who owns the majority of stocks in Walmart, making them $4 million an hour, while the average Walmart employee makes $12 per hour. As a result, some Americans feel left out, and are beginning to see democratic socialism as a path to rebalance the nation. Consequently, support for Senators Elizabeth Warren and Bernie Sanders is on the rise

Younger voters tend to support socialist candidates like Warren and Sanders. Northeastern students are among these voters created Huskies for Sanders, a newly formed community of Sanders supporters. The support for socialism among students is on the rise, mainly because it promises solutions to issues specific to young voters. However, socialism is unfavorable, most importantly, because the system is inherently prone to corruption. As the power concentrates to the country’s governing body, a few people will have great control over the economy, which enables corruption.

While democratic socialism might be a more equal system, a capitalistic system embraces values Americans oftentimes take for granted. As an international student, I have witnessed how driven and innovative students are here, particularly compared to my home country of Sweden. Capitalism promotes freedom, innovation, entrepreneurship, choice, cooperation and emulation. Socialism does not support these societal characteristics due to the nature of the system. American voters, students included, should advocate to reform the country’s capitalistic system, rather than completely changing it to a democratic socialist system that Sanders and Warren intend to implement as president.

The first structural change should aim to reestablish strong antitrust laws in order to promote consumer welfare and competition. These laws regulate corporations in order to prevent unlawful business practices. Due to the reduction of antitrust laws and other regulatory frameworks abolished by Reagan, competition in the U.S. decreased. The U.S. government should structure the economy to promote increased competition in as many sectors as possible. Increased antitrust legislation will increase regulation on large corporations, and allow smaller companies to grow independently and potentially yield positive results for consumers, innovative corporations and workers. 

According to the Federal Trade Commission, or FTC, the number of annual corporate mergers increased from 2,308 in 1985 to 15,361 in 2017. Another way to boost competition is to provide the FTC with a comprehensive legal framework to stop these mergers more aggressively and decrease future market congestion. In order for a government to do that, there must be politicians, such as Pete Buttigieg and John Delaney, who are in favor of increasing antitrust laws and who want to allocate resources to the FTC. These are candidates students should support to fix the system. 

Another structural change needed in the U.S. economy is to decrease the amount of money in politics. According to the Campaign Finance Institute, the total PAC contributions to congressional candidates have increased from $131.3 million to $479.6 million between 1978 and 2018, adjusted for inflation, inclining politicians to enforce legislation supporting shareholders and corporations instead of non-shareholders. Furthermore, in 1978, the total PAC contributions to congressional candidates from labor exceeded that of corporations by nearly $2 million in today’s value. Today, PAC contributions to congressional candidates from corporations exceed labor by $127.3 million. These numbers demonstrate the imbalance of money in American politics. Companies have one inherent mission, and that is to maximize shareholder wealth. If the government works solely on behalf of the corporations and not the workers, everyone in power is working on behalf of shareholders, resulting in non-shareholders feeling powerless, who make up the majority of Americans. To make government officials work for the people, which they are elected to do, America’s campaign financing system needs to be reformed. 

Lastly, the United States should increase organized labor. Since 1983, when Reagan brought to light how corporations can dismiss their workers’ demands, the percentage of unionized workers was cut in half. Furthermore, the number of union members in the private market is now as low as 6.4 percent, which decreased workers’ ability to make demands for their workplace.

America must strengthen its labor unions in order to regain a sustainable capitalistic economy. Stronger unions would give power back to workers and allow them to influence their workplace. Further, it would prevent corporations from slashing wages, health benefits and other similar compensations. Stronger labor unions would force corporations to be more conscious of their decisions and consider their workers more. Moreover, strengthening unions and pooling labor money would balance money in politics. This change would make the economy less discriminatory without  changing the whole system. 

A Congress influenced by pooled labor money and corporate funds leads to legislation passing in favor of both workers and corporations, ensuring workers’ rights and promoting economic growth. We would witness flourishing businesses while assuring the quality of life for the average worker improves as well. The United States is facing tremendous issues, which caused its citizens to distrust the current capitalistic system, but switching the system would eradicate many of America’s fundamental values. Instead of changing the whole economic system into socialism, the government should focus on reforming its existing system.