Just a quick summary of the basic concepts I have been trying to communicate in recent columns. Consider this a blanket response to some hostile emails.
I believe capitalism is the best possible economic system.
Capitalism depends on the consent of the people.
Inequality is an integral part of capitalism. The people have recognized this as an essential component of capitalism throughout our nation’s history. Inequality of outcome is not a valid argument against capitalism; nor is it a bar to public acceptance of the system.
For at least the last three decades, however, equality of opportunity has declined. Because an increasing percentage of the population is barred from the opportunity to accumulate capital, inequality of outcome has reached historic levels.
The degree of wealth polarization is accelerating.
As the people recognize the extent to which they are precluded from enjoying the benefits of capitalism, one of three things can happen:
1) Convinced that those with capital control the political system, they will revolt. This is the worst-case scenario.
2) If democracy works efficiently — and the people recognize it works — they will reject capitalism by voting for candidates that oppose it. This also is a negative scenario, as history has over and over shown that alternatives to capitalism do not work. By electing a socialist president, France has shown its willingness to abandon capitalism.
3) We can tweak capitalism to increase opportunity and decrease inequality, essentially rolling it back toward the version of capitalism enjoyed by Americans until the 1980s. This is the strategy I believe Americans should employ. The goal should be to return to a system in which all people have an opportunity to accumulate capital.
I have all kinds of problems with President Barack Obama, but I believe he provides the nation with the best path toward reforming capitalism without destroying it.