Choose your capitalism

Posted: 31 October 2012 in Uncategorized
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Eduardo Porter [ht: sm] is right: this election is all about what kind of capitalism we want.

In trying to reconcile the entrepreneurial spirit that the American brand of capitalism provides with its social costs, American voters must choose between Mitt Romney, the businessman who offers to move the economy forward by making government smaller and more efficient, and President Obama, who offers the government as an agent to assist the less prosperous, to put a thumb on the scale on the side of the have-nots.

What’s amazing is that, given the spectacular failure of the U.S. form of capitalism, the polls are indicating a very close election.

Yet for all the riches we have amassed, by the O.E.C.D.’s calculation, the income of Americans of working age in the middle of the distribution has grown less since the mid-1980s than in virtually every other developed nation. Perhaps unsurprisingly, we suffer from some of the worse social ills known to the industrialized world.

It is not just that income inequality is the most acute of any industrialized country. More American children die before reaching age 19 than in any other rich country in the O.E.C.D. More live in poverty. Many more are obese. When they reach their teenage years, American girls are much more likely to become pregnant and have babies than teenagers anywhere else in the industrial world.

We understand the importance of early childhood development. Yet our public spending on early childhood is the most meager among advanced nations. We value education. Yet our rate of enrolling 3- to 5-year-olds in preschool programs is among the lowest among advanced nations. Our 15-year-olds place 26th out of 38 countries on international tests of mathematical literacy, according to the O.E.C.D. The first nation to understand the value of widespread college education, the United States has dropped from the top to the middle of the pack of our economically advanced peers in terms of college graduation rates.

The American way has produced a high-tech health care system that offers sophisticated cures for those who can afford them, yet is astronomically expensive and poor at combating many run-of-the-mill ailments, and leaves millions uninsured.

Our safety net — to protect the most vulnerable from globalization’s ravages — is threadbare. Where would you rather lose your job to cheap competition from China? In the United States you would lose health care, too — unless you had the money to buy private insurance. If you were the breadwinner in a family of four earning the average wage, benefits would replace only 52 percent of it, even including any extra welfare payments you were entitled to, the O.E.C.D. found. And they would drop to 37 percent of your last wage after two years tops. In Britain, by contrast, you would still receive over 70 percent of your wage for 60 months after you lost your job. And your health care needs would be addressed by the public, universal National Health Service.

A particularly telling statistic speaks of how we deal with social dysfunction: there are 743 Americans in jail for every 100,000. That’s more than in any other country in the world, according to the International Center for Prison Studies. The next country down the list is Rwanda, with 595.

Social ills like obesity and child mortality have, of course, multiple and complex causes. But the battery of dismal statistics suggests, at the very least, a troubling pattern. Yet though we seem to suffer more than our fair share of social ills, by the O.E.C.D.’s calculation our public spending to address them is smaller as a share of the economy than in any other country in the developed world.

Unfortunately, there’s a third option not even on the table in this election: an alternative to capitalism.

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