Proponents of free-market capitalism, where market forces of supply and demand control, tell us it will produce the best of all possible economic conditions with virtually no government regulation.
But economic theory tells us that free-market forces drive wages to the lowest possible levels and maximize the profits of the corporations.
We tried free market in the 1920s when we had 25 percent unemployment, bread lines, sweatshops, a huge disparity between rich and poor. And because the economy was so hostile to the average American, more people were turning to communism as an answer. Free-market capitalism benefits the super-rich at the expense of the rest because the super-rich have the money and power to control government. Witness Fred Lazarus, who in 1939 persuaded President Franklin D. Roosevelt to change the date of Thanksgiving to give his department store more shopping days until Christmas.
Modern capitalism has gone through three phases. In the 1920s and 1930s the super-rich ran the country. John D. Rockefeller, Andrew Carnegie and J.P. Morgan controlled their industries, amassed tremendous wealth while government regulation was barely visible. Without consumer safeguards, the banks went under and the Great Depression resulted.
After World War II, a rush of government regulations and laws were enacted, consumer demand was pent up and the nation thrived. This ushered in a period of a controlled, limited free-market system that worked so well that a massive middle class emerged. This continued until a few decades ago when phase three began.
Giant corporations learned that they could manipulate Congress with campaign contributions and future lucrative lobbying jobs to get anything they wanted. And they wanted three things: preferential tax treatment, subsidies for their industries and the ability to write the laws that were supposed to regulate them.
This resulted in massive deregulation, with the excuse that regulations were too burdensome and costly, inhibiting job creation and prosperity. That led not only to the economic calamity of 2008 but to a system now so pointed in favor of the super-rich that the middle class is in danger of permanent stagnation, if not extinction.
It turns out that free-market capitalism is the enemy of democracy because today's version has resulted in citizens virtually losing their votes. Congress pays attention to lobbyists who tell them how to vote if they want the money and the promise of juicy jobs after their terms are up.
To prove the point, look at gun control. The overwhelming majority of Americans want universal background checks. Does Congress listen? Not just no, but hell no!
When the government bailed out the banks that were near collapse with billions of dollars. there were few strings attached. The banks gave much of that money to employees as bonuses. The most insidious act of Congress in recent times was the repeal of the Glass-Steagall Act, which probably would have prevented the deep recession of 2008.
Today, the banks that were too big to fail are allowed to grow even larger. Lobbyists continue their stranglehold on our bought-and-paid-for Congress, which spends three out of five days fundraising and is intent on satisfying the special interests at the expense of such things as Pell grants, food stamps and education.
It is clear that the present capitalistic system is not working for most. Today, the disparity between the super-rich and the rest of America is greater than during the Great Depression. Hard-working people can no longer be assured of reaching the American dream of a secure financial future. Instead, too many will never achieve that dream, regardless of their work ethic and determination.
It's past time to re-institute a limited free-market system and take our country back from the fox, who keeps telling us that our chickens will be fine if we just cut taxes and eliminate regulations. Same old movie we've seen before. Fool me thrice?
Marty Solomon, a retired University of Kentucky professor, can be reached at email@example.com.