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The Future of Capitalism debated at GVSU

January 25, 2011

Last night an estimated 250 people came to hear a debate on the Future of Capitalism on the downtown campus of GVSU. The Seidman Business Ethics Center hosted the event, which featured four panelists, two defending Capitalism and two critiquing Capitalism.

Each panelist was given eight minutes to present their argument and then each of the four were allowed to respond to comments from other panelists, before the audience was invited to comment.

Professor Nathan Goetting, editor of the National Lawyers Guild Review, was the first to speak. Goetting began by saying that free market Capitalism has never really been tried, at least not the theoretical version that is taught in business schools. Instead, Goetting pointed out, Capitalists want a strong state to intervene to protect their interests both at home and abroad. Such is the nature of all market economies, which always seek to get even richer.

Goetting mentions Wal-Mart as an example and the 2008/2009 Wall Street bailout as prime examples of how Capitalism needs the state in order to function. This state intervention comes in the form of subsidies, tax-breaks, taxpayer bailouts, deregulation and sometimes police/military intervention to protect capital interests. This led the first panelist to claim that what we have would more accurately be called mega-corporatism.

Goetting concluded his comments by saying that Liberty and Democracy should be virtues that are central to the workplace and our economy, but these are elements that Capitalism does not want or foster.

The next panelist was Mr. Craig Meurlin, a lawyer with Warner, Norcross & Judd, and former Amway VP and General Counsel from 1993 – 2000. Meurlin argued that the free market has brought many in China out of poverty, a country he has spent a great deal of time in both while he was with Amway and because of current business clients he represents. Meurlin never provided any evidence to support his claim about Chinese people being pulled out of poverty because of Capitalism.

Meurlin then acknowledged the shortcomings of Capitalism, but still thinks that it is a “successful system.” He then spent a great deal of time focusing on the role of the government and stating that the state is just as much to blame, if not more so, for the economic crisis we are currently facing. Meurlin suggested the government should make more laws that creates boundaries for the free market system, but he never articulated what those boundaries might look like. He also acknowledged mentions that corporate monopolies are problematic and identifies Proctor & Gamble as an example, which it should be mentioned has been a company that Amway has been fighting for years over claims that the P&G logo promotes Satanism.

Meurlin also blamed the US government for the Wall Street financial crisis. He criticized both the General Motors and Chrysler bailouts and bad government intervention. Then Meurlin made what seemed like a contradictory comment to this writer. He said, “When markets are too free they will destroy everything around them.”

The third speaker was Professor Bruce Bettinghaus, who teaches at GVSU. Bettinghaus not sure if he was for or against Capitalism and referred to Wikipedia as a source for defining what Capitalism is. He said that Pure Capitalism is narco-capitalism, where anything goes. Bettinghaus referred to the Lord of the Flies as a literary reference to make his point. The other end of the spectrum is state control, according to the GVSU professor. Here Bettinghaus cites Marx and Animal Farm to illustrate the problem of state control. “What we have is something more in the middle,” said Bettinghaus.

Bettinghaus offered up a solution for regulation by saying that what banks needed to due was to change the capital to assets ratio, particularly for the larger banks. He thinks that the bankers are “crazy” and agrees that we have a system of corporatism and the corruption exists because they (the bankers) are the biggest contributors to Congress.

The last panelist was Tony Nelson, a GVSU graduate who works in Chicago with the Mexico Solidarity Network. Nelson took the conversation in a whole different direction by looking at real scenarios as well as the human consequences of Capitalism.

Nelson said what if you had a local businessman who made Pokeman dolls, but sets up factories in Mexico. The company makes a great deal of money, but the money comes back to West Michigan and benefits this community, not the one in Mexico where the factory is. This businessman is considered a positive influence in the community. In contrast there are farm workers (some with, some without documentation) who work picking crops in the US making very little money. They send some of their earnings back to Mexico, which can help family members survive. This migrant worker is often reviled and viewed as a burden on US society.

Nelson said he came to Capitalism based on his experience in Mexico, where people are asking us in the US to think about how our policies negatively impact them. “Capitalism is inherently flawed,” said Nelson, “and is primarily driven by profit and growth.”

The panelist went on to say that development and trade policies are decided on behind closed doors, where the public has no say. He mentions NAFTA, CAFTA, and Plan Puebla Panama as example of undemocratic policies that have been devastating for the working poor and indigenous communities in Mexico and Central America. Nelson cited the Chapter 11 provisions of NAFTA, which allows corporations to sue governments if local communities object to a factory or a mine that will pollute their communities. “These are aspects of Capitalism that most of us will not see,” said Nelson. “We don’t know the trail of production that millions are workers are subjected to.”

Nelson concluded his comments by say Capitalism is not sustainable. “They (the Capitalists) need workers to exploit and consumers who don’t care.”

Craig Meurlin was the first to respond after all four made their arguments. He agreed with the idea that what we have is mega-corporatism and this corrupts government. He even suggested that Congress should where NASCAR-like suits to display the logos of companies that make contributions to them.

However, Meurlin then posed the question, “If capitalism is flawed, what do you propose we replace it with?” Bettinghausen followed by saying that you need something that will motivate people, that will get them out of bed and that is what the free market does.

Goetting said that incentives don’t need to be selfish and people don’t need to be threatened to do good. He thinks people care about justice and caring for one another. The incentive can be communal. Nelson agreed with Goetting and said that there are other economics models that can work, but capitalism doesn’t allow for other models.

Betinghausen  responded by saying that natural scarcity is what motivates us to do things. He then asked the question “Who owns NFL teams?” His point was that most of the NFL teams are owned by municipalities, which just isn’t the case. All NFL teams are owned by private individuals or corporations, except the Greenbay Packers, which are owned by the community. What the owners have been doing for years is getting municipalities to pick up much of the cost of building new stadiums with the threat of relocating if they don’t comply. (See Dave Zirin’s book Bad Sports)

Tony Nelson then responded to the question “what would you replace Capitalism with?” He said that communities should be allowed to create localized economies and that no economic system should be imposed on the whole world.

There wasn’t much time for Q&A and most of the people who asked questions made statements that suggested they were also critical of Capitalism, since most of the comments questions Meurlin and Bettinghaus.

As with most debates there simply wasn’t enough time to explore the topic. Another criticism of the forum was that all four panelists were White men, which contributed to the problem of how this topic is dealt with since women and people of color are disproportionately impacted by Capitalism in negative ways.

3 Comments leave one →
  1. kathy permalink
    January 26, 2011 7:44 pm

    “Bettinghaus not sure if he was for or against Capitalism and referred to Wikipedia as a source for defining what Capitalism is. He said that Pure Capitalism is narco-capitalism, where anything goes. ”

    What is “narco-capitalism”? I’m not as well versed in these things as you and it would be helpful if you could explain. I have not heard the term before.

    Thanks for the article on this fascinating debate!

  2. Jeff Smith permalink*
    January 26, 2011 7:48 pm

    Kathy, Bettinghaus did not define what he meant by narco-capitalism, but what I understood that to mean is a version of capitalism that operates like drug trafficking, where you traffic in a commodity that necessitates perpetual consumption. However, one could argue that this is how capitalism operates, since it is primarily driven by profits and growth. Thanks for the feedback.

  3. Kate Shepley permalink
    February 22, 2011 4:06 am

    Actually, Bettinghaus said “anarcho-capitalism”. The term basically means 100 percent free-market capitalism with out any state. He even confessed to having looked it up in Wikipedia. In fact, it’s even mentioned in the Wikipedia article you linked to in your post.

    While your theory on “narco-capitalism” was an interesting one, that’s not at all what was being referred to.

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