Why Has US Culture, for 200 Years, Supported Numerous Myths about Capitalism?

Capitalism in the U.S. seems to be saturated with deceptive myths that are based on misreadings of early economic observers or historical revisionism. E.g,: Histories of capitalism in early America seem to suggest that the "true" free-market of that era was, in fact, too unstable for large-scale business transactions; so various stabilizing elements were experimented with -- including monopolies, and the addition of government regulation to protect the deals of the elites. Adam Smith's alleged enthusiasm for the division of labor is contradicted by his observations that it was bad for the education of young minds; some historians also believe that Smith's "invisible hand" had no great theoretical meaning and was merely a common phrase of the times. Finally, meritocracy of the post-WWII period seems merely another myth -- this time the myth that capitalism is benign because it predictably rewards cognitive talent. How can we begin to dispel all of these myths about the cruel, unequal, exploitative nature of capitalism?

Official response from submitted

Basically, capitalism has always provoked all sorts of defensive rationalizations among those capitalists who could recognize, however dimly, the exploitation they operated on their employees. So some decided that their profits were rewards for the "management" or "risk" or "initiative" they took. This became harder to do when critics pointed out that workers too took risks when they accepted jobs and were never paid for that nor for the management tasks they routinely perform nor for the initiative. Or when critics pointed out that in modern corporations, the boards of directors who get all the profits pay others to manage, take risks, take initiatives and profits are what's left over after all those functions/people are paid. Marx really troubled the rationalizers when he shows how profit is the surplus - the excess of the value added by laborers over the wages aid to them - taken by the employer simply by the act of employing even when nothing else is done by the employer etc. Those myths are being dispelled these days as capitalism's instabilities, inequalities, and injustices proliferate and through the entirety of rationalizations of the system under a darkening cloud of doubt and skepticism.

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  • Richard Wolff
    responded with submitted 2017-04-05 21:52:37 -0400
  • Save Educators
    published this page in Ask Prof. Wolff 2017-04-05 03:23:05 -0400