Posted by: mulrickillion | March 14, 2012

Capitalism, Version 2012


Thomas L. Friedman, Josh Haner/The New York Times

By Thomas L. Friedman, Op-Ed, March 13, 2012 —

David Rothkopf, the chief executive and editor-at-large of Foreign Policy magazine, has a smart new book out, entitled “Power, Inc.,” about the epic rivalry between big business and government that captures, in many ways, what the 2012 election should be about — and it’s not “contraception,” although the word does begin with a “C.” It’s the future of “capitalism” and whether it will be shaped in America or somewhere else.

Rothkopf argues that while for much of the 20th century the great struggle on the world stage was between capitalism and communism, which capitalism won, the great struggle in the 21st century will be about which version of capitalism will win, which one will prove the most effective at generating growth and become the most emulated.

“Will it be Beijing’s capitalism with Chinese characteristics?” asks Rothkopf. “Will it be the democratic development capitalism of India and Brazil? Will it be entrepreneurial small-state capitalism of Singapore and Israel? Will it be European safety-net capitalism? Or will it be American capitalism?” It is an intriguing question, which raises another: What is American capitalism today, and what will enable it to thrive in the 21st century?. . . .

When the private sector overwhelms the public, you get the 2008 subprime crisis. When the public overwhelms the private, you get choking regulations. You need a balance, which is why we have to get past this cartoonish “argument that the choice is either all government or all the market,” argues Rothkopf. The lesson of history, he adds, is that capitalism thrives best when you have this balance, and “when you lose the balance, you get in trouble.”

For that reason, the ideal 2012 election would be one that offered the public competing conservative and liberal versions of the key grand bargains, the key balances, that America needs to forge to adapt its capitalism to this century.

The first is a grand bargain to fix our long-term structural deficit by phasing in $1 in tax increases, via tax reform, for every $3 to $4 in cuts to entitlements and defense over the next decade. If the Republican Party continues to take the view that there must be no tax increases, we’re stuck. Capitalism can’t work without safety nets or fiscal prudence, and we need both in a sustainable balance. . . .

Capitalism, Version 2012 – New York Times


See also Post-Global Financial Crisis: The Measure of a "Beijing Consensus" (presenting a discussion about the varieties of capitalism)

See also Economics by Mitt Romney – The “Zisi”-Effect (presenting a discussion about the varieties of capitalism)

See also The Republican Conundrum


  1. I agree with you that both additional income (as opposed to tax increases) are necessary together with cuts in spending. So here’s a novel idea which relies on the American spirit of volunteerism. (It’s the same spirit that caused people to buy War Bonds during WW II).

    Let each member of Congress put his or her salary on the line – say to the tune of $50,000 per year. (Considering their overall income between cash and perks is close to $1,500,000 and most of our elected officials are multi-millionaires this doesn’t seem like a lot).

    For each $10,000 in salary reduction, their constiutents would have to volunteer to contribute $10 Million dollars. (That’s a pretty good return on investment by anyone’s standards). The money collected could only be used to retire the national debt.

    Would this program make a significant dent in our indebtedness? No. But it might get us back on track to thinking “It’s not all about what I can get out of the system – rather, what can I give back to my fellow Americans.”

    I can think of no more appropriate leadership stance that our elected officials could take than for them to have “some skin in the game.”

  2. Well, you put a little bit of spin on the intended point, but that is okay because you have a right to your opinion, and I also respect the opinions of others. However, you seem to have left out the critical issues of varieties of capitalism and the necessity of increasing taxes in proportion to reductions in government spending. Otherwise, thank you for your comment.

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