Capitalism: Right or Privelige?

[guitar man]

I feel an argument coming on with a RW friend about outsourcing and the upward wealth distribution from the poor/middle class to the upper classes.

As far as I can tell, there is no guarantee of a capitalist economic system in the Constitution. Am I right? Hopefully someone who is a better Constitutional scholar than I can help me out.

I am no communist and don't want to see the US head that way. What these right-wingers like to call "capitalism" today is actually feudalism to the core. I'd just like to be able to point out to this guy that the constitution doesn't guarantee either, but would indicate an economy that will "promote the general welfare"

Thanks.

[Lucky Luciano]

1. I am no lawyer,

but I think I remember things in the constitution (from reading it wayyyyyyyyyyyyyyy back) about interstate commerce etc - that implies a capitalist endorsement to me, though, to be fair, I need to reread it to draw a full conclusion.

[guitar man]

2. thanks

I need to do a thorough re-read myself.

[amjsjc]

3. No guarantee to capitalism

The constitution was written well before anyone had thought up socialism.

[Lucky Luciano]

5. True, the word may not have been invented yet,

but what I said about interstate commerce suggests that maybe they endorsed capitalistic policies.

[Mike Niendorff]

11. "commerce" is not the same as "capitalism"

Furthermore, the fact that the federal government is given *regulatory authority* over interstate commerce necessarily implies that commerce is, itself, rightfully a *subject* for government regulation.

With that in mind, go back to the Commerce Clause cases of the early 1900's (Hammer v. Dagenhart, for example) and you'll find numerous examples of laissez-faire activists trying just about every revisionist trick in the book to restrict (or outright eliminate) that same Constitutional authority when it interfered with their extra-Constitutional "free market" agenda.

Anyway, I think it's pretty tenuous to claim that the Constitution's recognition of "commerce" necessarily implies endorsement of a laissez-faire capitalist structure (which post-dates the Constitution by a full century, anyway). Rather, I think both the plain text of the Constitution and the history that have arisen out of it demonstrate exactly the opposite -- much to the chagrin of today's radical wingnuts, of course :)


MDN

[amjsjc]

20. The founding fathers mostly pre-dated this debate...

I'm not a huge expert on American economic history in this period, but so far as I know, a lot of the problems associated with modern capitalism didn't really spring up until the industrial revolution was farther along (and even then they would have been centered in England for quite some time afterwards...) The founding fathers probably didn't think in terms of laissez faire capitalism vs socialism.
The Constitution itself basically lays out how the government is to function, while the Bill of Rights places explicit restrictions on what the Federal govt can do. It only peripherally touches on issues that might be related to economics (ie the interstate commerce clause--which was probably meant more to ensure that nothing blocked interstate commerce rather than regulating it in the present sense-- and the BoRs restriction against unreasonable searches and seizures).
As a practical matter the founding fathers probably would have been considered pretty fiercely libertarian by today's standards; they had a deep seated distrust of federal power (just look at the constitution) and would probably oppose government regulation on principle. Of course they lived before the era of really massive corporation etc, etc...

[Mike Niendorff]

21. a mostly agrarian society, largely plantation-based, slave labor common

indentured servitude common, vast majority of Americans were non-landowners (and, hence, denied the vote). Etc.

At most, I'd call this structure "proto-capitalist" (in that it still stands on a straight line running from medeival feudalism toward the scaled-up feudalism that capitalism has become today). But, as you say, it certainly wasn't "capitalist" in the modern, industrial sense (since that form of capital didn't exist yet, nor did the state apparatus necessary to support it).


MDN

[DemocratSinceBirth]

15. Au Contraire

The early Christians lived as communists...

[amjsjc]

19. But it didn't exist as an economic philsosophy...

Trapping of these ideologies existed long before anyone codified them into systems of belief like capitalism or communism...

[noahmijo]

4. We are a mixed economy today

Half Capitalist Half Socialist.

I agree people have the right to positive aspects of Capitalism (the right to start up businesses, venture capitalism, the right to choose between goods ect) but left without watchdogs lasse faire can be very dangerous.

[tom_paine]

10. Well said! gets to the heart of the Economic Matter

Of course, the Busheviks are bad on so many levels.

[wurzel]

25. We don't have "capitalism": we have "fascism".

Capitalism is Private ownership of the means of production. This was perverted with the introduction of the stock exchange. Stocks brought about giant corporations which have achieved great political power. The symbiosis we now have between corporations and the government, acting against democratic institutions that express individual rights, is a form of fascism. It is unconstitutional because if the Constitution is not about individual political rights, it is about nothing.

[Sirveri]

6. If the wealthy screw over the poor enough

then they will be torn down and dragged thru the streets. It has happened before, and it will happen again. Regulations were put in place because those businesses screwed over the common citizen. Removing them without understanding why they're there in the first place is short sighted and ignorant.

[guitar man]

7. That's the truth

We are approaching the same set of conditions that led to the Bolshevik revolution. I for one don't want to see that happen here.

[datasuspect]

18. no it will not happen

the poor and pretenders to the middle class are narcotized sufficiently with god, patriotism, and dvd players.

i really think many of your "average people" out there think they are rich. a few big screen tv's, some new cars, and a mchouse in the suburbs is enough for many people to think they are "successful." true, they are loaded up the ass with consumer debt, but if you can have the purchasing power (at least with CREDIT) of a rich person, you are rich, no?

long story short, the rich and the powerful have a bagful of ruses to keep us fighting against each other. i really doubt the possibility of a popular revolution in this country ever again.

[Sirveri]

24. That is true, until outsourcing came along.

Look at the 50's, it was all happy happy buy buy buy. Go to college, get a great job, support a family, go into debt and die. There's only one problem, you can't go into debt if your job gets outsourced to Bangkok, because you won't have any money.

I was quickly on my way to becoming a blissfully unaware anesthestised middle class sheeple. I really really liked that. I was feeling secure. Age 20 and making 16.54 a hour doing something I enjoyed with full benefits. Then due to outsourcing and the resulting tech crash I got to spend about 14 month on unemployment. Before getting a shitty job as a cashier at a hardware store where they fired me so that they didn't have to pay benefits.

Now rinse and repeat with the rest of the middle class often enough. You will soon jolt them into reality, and that's when the revolution begins. Business ethics were created by the rich to keep the rich in power. When the rich became overly greedy and violated those ethics, not having any respect for something they've never experienced. They have paved the way for a major social upheaval. Business ethics will soon reign far and wide again, if business as we know it is still around after the dust clears.

[datasuspect]

33. i hear ya'

regarding the job thing.

shit, i was living out in the street in chicago once i lost my apartment and my unemployment ran out.

talk about rough. between the gangbangers and the cops, it was truly living like an animal.

i haven't worked in more than a year. although i do have an interview next week, so i guess i can look forward to that.

[punpirate]

8. Here's what I remember from some reading...

... a while ago. The Constitution does not explicitly endorse the corporation (or charters of incorporation as they were called then). In fact, the founders were exceedingly suspicious of them. After all, much of the colonies' problems stemmed from the actions of the British East India Company, which was the crown-authorized trading company in the colonies. American merchants knew well that King George and the British East India were in cahoots to loot the colonies.

But, the founders left the business of incorporation matters up to the states. Through about 1850 or so, there were very few chartered corporations in the US. Around 1800, there were only about forty country-wide.

What changed the corporation forever was a ruling in 1886 by the Supreme Court. By a misreading of the head notes of a case of a California railroad against a California county, it became institutionalized in law that a corporation had all the rights of a person. After that, the corporation grew in importance and in insulation from the laws affecting real persons.

The history of this is well-documented in Thom Hartmann's Unequal Protection.

But, strictly speaking, an incorporated entity exists because of a charter issued by a state. That charter can be revoked, in most state law, if the corporation fails to substantially act within the guidelines of law. (There have been some attempts to revoke charters, particularly in California, but no attorney general has decided to act on those requests for revocation.)

So, in that sense, the corporation exists at the will of the state, and, therefore, can be seen as a privilege. In more practical terms, though, corporations see their existence as a right, because no one wants to take on a large corporation to test their right to exist.

Cheers.

[Lucky Luciano]

9. Interesting post

I will some day look into Hartmann's book.

[July]

12. Question.

What do you think is more important (for us), the corporate right to exist or the concept of corporate personhood? What would change if corporations were permitted but did not have the "personhood" rights?

Also, could you explain about the misreading of the head notes?

[punpirate]

13. Head notes are...

... a brief description of the case and the conclusions made by the justices--a short summary, in other words. At the time of the decision, the clerk of the court did the summary, and the clerk of the court was a very powerful person--very prized position. Hartmann makes the argument that the clerk of the court intentionally wrote the summary to include "personhood," hoping to confuse future references to the case. (In fact, the issue was not a part of the case, and the Chief Justice had said that it would not be considered in the case.)

Legally, "personhood" for corporations has had a fairly dramatic effect, particularly with regard to corporations asserting they have 1st and 14th amendment rights. A good example of such would be Nike's assertion in a recent case that truth in advertising laws don't apply to it, since anything Nike says of itself is free speech.

As for corporations existing, there's not much to be done about that--law permits it--and anyone can incorporate. The great problem is that the corporation, as a person, is utterly amoral. There was a documentary done recently, innocently called, "The Corporation,":

http://www.thecorporation.tv/

which enlisted a pychologist to do a personality profile of the corporation (carrying the notion of personhood to a logical extreme). The result: pyschopath.

There are two things which can be done to bring corporations into line--first, clarify in law the difference between the rights of natural persons and artificial persons. Once that is done, the second necessity can come about, which is removing the right of corporations to contribute to political campaigns. Since the Supreme Court has made a ruling equating money with speech as protected under the 1st amendment, clarifying the rights of artificial persons is essential beforehand.

Admittedly, neither of these things will come about in the current political climate. But, as long as corporate money has so much sway in the political process, we'll continue to see legislation and court rulings benefitting corporations. Note that the House just gave corporations yet another $140 billion tax break....

Cheers.

[LiberalEconomist]

23. Here is my take

The Republic began to die with the advent of the Industrial Revolution.

[eagler]

14. Rogue capitalism can be every bit as oppressive as

rogue communism.

[leftofthedial]

16. capitalism is independent of our Constitution

unregulated capitalism is wholly incompatible with democracy.

[LiberalEconomist]

22. Correct

Unfettered capitalism is compatible only with facism.

[leftofthedial]

32. and welcome to our world.

:-(

[MAlibdem]

17. If it had been "Life, Liberty, and Property"...

...there would be more of a case for it. But government intervention in the economy has been demonstrated to be Consitutionally acceptable (since the 1930s), so really anything to "regulate interstate commerce" would fly, I think.

[disinfo_guy]

28. government intervention since the 1930s???

The Republican party was founded for "internal improvements" - corporate welfare - before the Civil War. Not only that, but the Constitutional Convention itself http://www.yale.edu/lawweb/avalon/avalon.htm had a great deal to do with closely merging "national interests" with economic special interests. Just look at Cuba.

The idea that FDR was the first to allow the government into the economy is nonsense, and usually only taken seriously by right-wing anti-FDR types.

[MAlibdem]

31. To allow serious intervention was def FDR....

he had to threaten the Supreme Court with Court-stacking to allow it. He was a good guy, but made some serious changes that needed to be made.

[stavka]

26. Off-Shoring of Business is a huge rip in the fabric

It means American big business enjoys the protection of the US government (which it more or less controls) and yet owes no obligation or debt to either the government or the people.

This is a great example of what free market capitalism is not.

And its screwing you, your neighbor, and the world....in the very easier way to explain. US Marines will storm ashore to protect "American Investment" meaning a handful of people's wealth who have contributed NOTHING to America.

[doni_georgia]

27. capitalism is the brain child of Adam Smith (1723-1790)

In "The Wealth of Nations" he laid the groundwork for the free market economy, which our capitalistic economic system is still based on. Many of the founding fathers had read this book by the time of the Constitutional Convention. Smith's theory's combined with the philosophies of John Locke and Thomas Hobbes greatly influenced the framers of the COnstitution. Smith's theory outlined that the major role of government is to protect the interests of its citizens, and that the economic system of a country should be as independent as possible from the political system.

Sorry - political science major in college - Could go into lengthy detail on Hobbes, but will spare you all.

[kaitykaity]

29. Problem is we're not capitalist anymore.

We're corporatist. Bordering on fascist -- Mussolini's
definition being the joining of state and corporate
power.

Regulated capitalism works. There's competition, and
regulation keeps the big fish from eating up all the
little fish.

Reagan brought about the era of unregulated capitalism,
and this mess is the natural progression of that
beginning.

[James T. Kirk]

30. Capitalism & Free Markets in the Constitution

The U.S. Constitution identifies a number of points in support of a capitalist system. The first is the acknowledgment of a money system in which people are paid currency for their work and use currency in their business transactions. The second point is that the government is dependent on the rest of the nation for revenue. It does not place the government in control of the economy or economic sectors. The government merely regulates commerce. Third, the explicit protection of the right of private individuals to own property, which would include land and capital, is very strongly stressed. Finally, the powers of the government are broadly limited and the rights of people to participate in economic activity, which would naturally include forming businesses, are broadly protected.

Let’s review the Constitution together! Here we go!

Article I, Section 6
The Senators and Representatives shall receive a Compensation for their Services, to be ascertained by Law, and paid out of the Treasury of the United States.

Paying the Congress out of the treasury implies that a currency system exists. That is one of the prerequisites for a capitalist or free-market society.

Article I, Section 7
All bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.

Again, there is a reference to money. Another important point is that the government raises revenue from the nation, which implies that the wealth is owned by the nation and government takes only part of it. The government does not own the wealth of the nation. That is another important component in a capitalist system.

Article I, Section 8
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

Here is more evidence that the government collects money from other entities. This is certainly not a command economy.

To borrow money on the credit of the United States;

Here we see the acknowledgement of an already existing system of debt and credit, which is yet another hallmark of a capitalist system.

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

Note that the role of the Congress is limited to regulation of commerce, not controlling it or participating in it.

To establish …uniform Laws on the subject of Bankruptcies throughout the United States;

Here we can see that bankruptcy is identified in the Constitution. Going bankrupt is a bad thing, but it is also an economic protection of the bankrupt person or business. This is another indicator of a market economy.

promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;

This is a big one. Authors and inventors have the right to exclusively profit from their works for a limited time through patents and copyrights. This means that their works are private property and they can sell them. Individual property rights are another requirement of capitalism.

Article I Section 10
No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

Note the acknowledgement of contracts. Also note the rejection of nobility, which was part of the primitive feudalist and monarchist systems.

Article II, Section 1
The President shall, at stated Times, receive for his Services, a Compensation, which shall neither be increased nor diminished during the Period for which he shall have been elected,

Once again, the tradition of salary in compensation for work is acknowledged.

Amendment I
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

This is another big one. If you want to write a book and sell copies of it, the Congress cannot stop you.

Amendment IV
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

Here is another acknowledgement of the right of the people to have their own private stuff.

Amendment V
No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

Note that you cannot be deprived of your own property without due process, which is another nod to private ownership.

Amendment VII
In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.

Legal suits of this type are between citizens, which means that they are doing business with each other according to their own preferences to enter into business arrangements. The government’s role is to help resolve their disputes.

Amendment IX
The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.

This is a catch-all declaration that protects all sorts of private business activities. Suppose I want to start a business. As long as I abide by the regulations, they cannot stop me. Suppose a bunch of other folks and I want to pool our resources and invest in a factory. They can’t stop us. That’s capitalism!

Amendment X
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

This is similar to amendment IX.

Amendment XIII
1. Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction. 2. Congress shall have power to enforce this article by appropriate legislation.

If you’re going to work for me, I have to pay you. You can sell your labor to the highest bidder. This provision was sadly missing from the original U.S. Constitution and it took a bloody and costly war to document this human right and economic right.

Amendment XVI
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

Ah, the income tax. It is not generally liked by capitalists, but its existence is evidence that free market economic activity is acknowledged. The government just wants a cut of what the people are paying each other.