1. The biggest threat to the poverty-ending power of capitalism today is the looming backlash against free trade and open markets in the developed world, especially in the U.S. If the rich world shuts its borders we’ll hurt economic prospects elsewhere in ways that no amount of “creative capitalism,” as discussed here, can begin to offset.
2. The paradox, then, is that the biggest, most “creative” boost American capitalists can offer the world’s poor is to ease the economic anxiety of workers here at home -- because it’s their insecurity that will fuel the protectionist backlash.
Then I got a little nervous:
3. Easing this economic anxiety means providing better health care and pension security for average workers.
Then I felt he fell off the truck:
4. This can’t happen without government playing a bigger role, and supplanting over time the central (and unique) role corporations have come to play in the American welfare state. It will also entail higher taxes.
5. American capitalists -- including, perhaps, Mr. Gates, though I’ve not seen him speak to these questions -- are generally confused about the necessity of this transition. On the one hand business leaders want to get out of the health care and pension business, because soaring costs are killing them. But in the next breath most executives say they don’t want “big government” more involved. Who else do they think is available?
6. In addition, American capitalists wrongly believe that the higher taxes needed to support this transition would hurt the economy, when the evidence from other advanced nations shows that the modestly higher taxes required to relieve corporations of this burden, and plug other gaps in the safety net, are perfectly consistent with strong economic growth. America would not become France or Sweden.
Why wasn't the answer education instead of appeasement? I have a really hard time with the idea of the idea of people blocking free trade unless given concessions. I feel the same way about income redistribution. I've heard people say that playing Robin Hood keeps the poor peaceful.
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