The Two Sides of Capitalism


Recently Romney has been faced with attacks from his fellow Republican candidates about his time at Bain Capital.  They are lashing out at Romney claiming he destroyed jobs, companies and individual lives. But for the Republican Party who claims to be pro capitalism why are they attacking Romney for his capitalist record. He was successful at Bain, he did his Job and it benefited the company.  By all standards this should make Romney more appealing to the Republican Party.

However, his record at Bain is not helping him because it is the side of capitalism people do not like.  It is the side of capitalism Republican’s avoid.  Republican’s like talking about the job creators.  They enjoy telling stories of how a small businessman started from nothing and became a big success.  They see this as the heart of capitalism and use it as an argument against anything that could hinder the free market i.e. government.

Now, the difficult part of capitalism, Romney’s contribution, is when businesses are forced to become more efficient (nice way of saying firing people).  In order for a business to become more successful and more profitable efficiency must always be maximized.  Unfortunately this sometimes requires cutting costs, firing people or even shutting down whole portions of a company.  This is all a part of capitalism.  The free market left alone means fierce competition and cut throat business practices.  So for every story of a job creator hiring a new person or a rags to riches story there is also a story of a person like Romney coming in and “streamlining” a business or firing a few people in order to make a couple more dollars.  The problem is both of those stories are always present in capitalism.  They coincide with one another and to praise the one side of capitalism while despising the other is the height of hypocrisy.

The ironic part of all this is the way to curb the effects of the ugly side of capitalism is through government involvement. Government is there to provide jobs to people in times of recession through policies like public works programs.  Government has the power to spend money to help ailing sectors of an economy.  And government can provide tax breaks to help individuals.  A lot of what the government does is help people and businesses who are hurt by the other side of capitalism. So we have Republican candidates who hate the government and also hate a necessary part of capitalism.  It has become unclear what they want done. The Party as a whole is confused.

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