Capitalism in the United States continues to face a serious legitimation crisis.
The common sense that is manufactured on a daily basis by mainstream economists, politicians, and media pundits is that capitalism is working—and, even if it isn’t, at least for the moment, there really is no alternative. That means that the vast majority of Americans should believe that capitalism is functioning pretty well.
And they do. But only barely.
According to a new survey by the Public Religion Research Institute, a majority of Americans (54 percent) do believe American capitalism is working well. But only a tiny fraction (9 percent) believe it’s working very well. On the other hand, more than 4 in 10 Americans say it is working not too well (26 percent) or not at all well (16 percent).
And why don’t Americans think it’s working well? More than one third (34 percent) of those who say capitalism isn’t working well say so because it encourages greed, roughly 3 in 10 (28 percent) because it does not provide equal opportunities for everyone, 1 in 7 (14 percent) because it creates poverty, and 1 in 10 (11 percent) because it creates lasting inequalities. For those who believe capitalism is working at least somewhat well cite the reasons offered by the manufactured common sense: it creates wealth, it provides equal opportunities, and it encourages personal responsibility, and it promotes individual freedom. That’s the contested terrain of capitalism’s legitimation crisis in the United States.
Not surprisingly, Americans are divided both on whether or not capitalism is working well and on why that might be the case. For example, two thirds of high-income Americans (those with annual household incomes of $100,000 or more) say American capitalism is working well, compared to less than half (47 percent) of low-income Americans (those with annual household incomes of $30,000 or less). More than 6 in 10 (61 percent) Americans with a college education believe American capitalism is working well, compared to less than half (49 percent) of those with a high school education or less. High- and low-income Americans also have different perspectives on why capitalism is not working well. Nearly 4 in 10 (38 percent) Americans with low incomes say capitalism does not work because it does not provide equal opportunities for everyone, while just 12 percent of Americans with high incomes cite this as a reason. Low-income Americans (16 percent) are also three times more likely than high-income Americans (5 percent) to say capitalism is not working because it creates poverty. By contrast, high-income Americans (40 percent) are more likely than low-income Americans (29 percent) to say capitalism is not working well because it encourages greed.
Clearly, in the midst of the Second Great Depression, capitalism in the United States is exhibiting all the features of a legitimation crisis: it is still the predominant way of organizing economic life but it is simply not able to demonstrate that its practical functioning fulfills the ends by which an economy is usually justified. As a result, large portions of the population have lost their faith in the ability of American capitalism to operate effectively and justly.
Now is the time to have a full-scale public discussion of what democratic alternatives should replace it.