What "Capitalism" Is Not

If I were to summarize message Michael Moore's new movie, Capitalism: A Love Story [1] in one sentence, it would be this: Capitalism is not a form of government. That's the answer to the question posed at the beginning of the movie, via 1950s educational/propaganda films.

Capitalism is not a form of government. It is a tool we've allowed to be used as a weapon. We threw out the instructions and rules for its usage, and it became a weapon — much like a hammer can be used to build a house or smash a skull, depending on whether it's wielded by a carpenter or a psychopath [2].

Moore spends the rest of the movie showing us how we not only tossed out the rules, but junked every other tool in our collective toolbox, and left ourselves with the hammer. But everything is not a nail, and the hammer isn't suited to every aspect of the task in front of us. Moore gives us until the end of the movie to figure out what that seemingly abandoned task might be.

Capitalism is populated by people whose names we know and people whose names we don't — all characters in what Michael Moore has subtitled "a love story." We know the speeches of the former, and the stories of the latter, because we've watched those same stories unfold in our own communities in the last couple of years. The speeches were intended to arouse our passions, by retelling part the most recent chapter in the story of how we got here — the part that happened on Wall Street and in Washington.

The stories were intended to touch our hearts, by retelling another part of the most recent chapter in the story of how we got here — the part that happened on "Main Street," on our streets, and in our communities; the part that happened to friends, neighbors and family members whose financial decisions weren't any worse that the residents of Wall Street. But one carries bonus checks in their hands, while the other carries boxes and furniture to a truck, dumpster, or fire-pit outside of their homes — or sometimes just to the curb.

For some of the audience, Moore is largely telling us a story that we mostly already know. And for others, Moore's film pulls back the curtain to reveal the reality only seen as faint shadows before, from the other side. Almost anyone who isn't a student of economics, history, business or government will come away with some bit of new bit of knowledge, or a better understanding of what we already know

We know because in a sense we're all in this movie; like players in a soap opera that's run so long nobody remembers the original players or plot. That's part of the paradoxical challenge Moore took on with this film. He must must tell us a story that's at once familiar and unfamiliar.

He reacquaints us with the players we already know: the homeowners facing foreclosure, the "condo vulture" profiting off others' misfortune, and Countrywide VIP loan officer who didn't see anything wrong with what he was doing — though at one point he notes that "the bad loans" were being processed in the office next door, even as he process more desirable loans (waiving fees and paperwork) for special "Friends of Angelo." In the process he humanizes them, rather than lionizing or demonizing them. He neither excuses their decisions or forgives their choices

He goes into archives and digs up old scripts to storyboard the plot-line leading up to this moment — our moment in the ongoing saga. He coaxes the old actors — the staring players and anonymous extras — to have them tell us about their role in the drama.

But then he hands us an incomplete script, with inevitable holes in the story, and no apparent ending. The holes in the story are inevitable. Moore's subject is so broad, with a timeline reaching impossibly far back into our shared history. Working inside the finite timeline of a movie, it's inevitable that Moore had to leave some parts of the story untold. Other parts he must paint with broad strokes, if wants to get in the rest of the story. (If Moore is looking for material for the DVD "extras," the debacles around mortgage reconciliation and credit card reform might be good places to start. Toss in the recent Senate Finance Committee vote on a public option in health care reform, and Moore would have the makings of another movie: on the influence of money in politics.)

Capitalism is not a form of government, nor is it a religion. As Moore points out, despite how often we've been told that it is at completely compatible with religion, it ain't (as the song goes) necessarily so. The prosperity gospel notwithstanding, Moore rather humorously points out what he turns to his own priest and other ministers to address more seriously. They say pretty the same thing that Rev. Howard Bess [3] has written about the health care reform debate.

As a follower of Jesus from Nazareth, I ask all who have taken the name Christian to remember that 1) Jesus was committed to giving people healthy bodies, 2) that Jesus had a priority commitment to the poorest of the poor, and 3) that his warnings to the wealthy and the selfish were relentless.

This is called Bible 101.

I suspect many will balk at the repeated uttering of the words "capitalism" and "evil" at some points in the movie. In America that's bordering on blasphemy and has been for some time. I suspect, however, that at least some of the ministers will concede — as did the bishop who was interviewed — that at the very least capitalism is a tool which has been used for evil purposes, which I'll define as willfully and knowingly engaging in actions that will bring harm to others. The added twist is that using capitalism in such a way usually means doing so for one's own material gain.

While Phil Gramm may consider Wall Street a "holy place" it can hardly be disputed that many powerful people on Wall Street knowingly and willingly engaged in actions that would bring harm to many, and profited from it. They profited from it, and are still profiting from it even as the consequences reach into the live of people far less well off. As the opponents of health care reform have recently taken up the chant "What's wrong with profit?", my guess is that Moore and the ministers he interviews for his movie would agree that the love of profit [4], and the pursuit of profit above all other considerations is the real problem.

There is a simple answer to the far right's new favorite chant against health care reform - "What's Wrong With Profit?". Nothing. There is nothing inherently wrong with making a profit. But their question misses a point that I recall from my Baptist upbringing and my days as a Sunday school teacher.

It's not money that's "the root of all evil," as the most common misquoting of particular bit of scripture would suggest. It's the love of money that's the "root of all evil." Money itself is neither bad nor good. Money, or profit, is not the problem. It's what we do with it, and what we do for it, that makes the difference. If it becomes our only reason for doing anything we are, as a country, lost.

Capitalism is not a form of government, nor is it a religion. It's a tool, turned into a weapon by our abandoning rules and guidelines for it's use. But it's not the only tool at our disposal. The others actually have been lost so much as neglected, and towards the middle of his film onwards, Moore seeks out those who have picked up those tools and are re-learning how to use them.

Moore probably shows us this because the tool we've clung to, for which we've forsaken the others, is not suited to every aspect of the task in front of us, so long forgotten that we have to be reminded what it is. Here, Moore turns to a man whose name has been invoked over and over again during the current economic crisis — for he defined the task more than a generation ago.

This Republic had its beginning, and grew to its present strength, under the protection of certain inalienable political rights—among them the right of free speech, free press, free worship, trial by jury, freedom from unreasonable searches and seizures. They were our rights to life and liberty.

As our nation has grown in size and stature, however—as our industrial economy expanded—these political rights proved inadequate to assure us equality in the pursuit of happiness.

We have come to a clear realization of the fact that true individual freedom cannot exist without economic security and independence. “Necessitous men are not free men.” People who are hungry and out of a job are the stuff of which dictatorships are made.

In our day these economic truths have become accepted as self-evident. We have accepted, so to speak, a second Bill of Rights under which a new basis of security and prosperity can be established for all—regardless of station, race, or creed.

Among these are:

The right to a useful and remunerative job in the industries or shops or farms or mines of the nation;

The right to earn enough to provide adequate food and clothing and recreation;

The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;

The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;

The right of every family to a decent home;

The right to adequate medical care and the opportunity to achieve and enjoy good health;

The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;

The right to a good education.

All of these rights spell security. And after this war is won we must be prepared to move forward, in the implementation of these rights, to new goals of human happiness and well-being.

America’s own rightful place in the world depends in large part upon how fully these and similar rights have been carried into practice for our citizens.

As Moore relates, Roosevelt did not live to see his second bill of rights become reality. He didn't live to see — as Moore explains — the country roll back the safeguards put in place during his time in office [5], to prevent another financial disaster, and the consequences visited upon Americans during the Great Depression.

Watch Crash The Next Great Depression (factors that led to the 2008 meltdown -- after the 1929 market crash [6] in Politics [7]  |  View More Free Videos Online at Veoh.com [8]

TERRANCE HEATH: In his column about the 79th anniversary of the 1929 Wall Street Crash [9], Professor Maury Klein [10]asked, "Is it 1929 all over again?" Is it?

ROBERT KUTTNER: Yes, this is 1929 all over again. For the same reasons. The crash of 1929 was caused by too much speculation, with too much borrowed money, with too many conflicts of interest and too little transparency. And in the 1930's the New Deal mostly repaired that by much tighter regulation of banks, much stricter supervision of conflict of interest, much greater controls on leverage and much grater disclosure for investors.

But it fixed the problem for the known universe of financial institutions, and after the '70s all kinds of new exotic financial instruments were invented. And because deregulation came back into fashion, and the right wing really took over the conversation as well as government regulators did not keep up with the new instruments that Wall Street invented. And so all the same kinds of uses crept back in, and it took about 20 years until the house of cards was so high and so rickety that you then had the same kind of crash.

TH: When did the rolling back of those New Deal measures start?

RK: Well, it's interesting; it happened in fits and starts. Some of it was deliberate and some of it was simply people taking advantage of other things that had happened. For instance, in the period between 1971 and 1973 the Nixon administration dismantled dismantled one of the main pillars of Bretton Woods from 1944 [11], which had created a regime of fixed exchange rates and along the way prevented a great deal of international speculation in currencies

So, after the 1970s little by little you had a whole category of speculation that had been prohibited by the ground rules obtained in the '50s and '60s, namely a lot of currently speculation. You had the so-called eurodollar market of dollars that existed in Europe that are not really regulated by anybody.

Then in the '70s also you had Wall Street taking something that had been the monopoly of Fannie Mae back when Fannie Mae was a public institution and part of the government, namely the securitization of mortgage, and privatizing it, and having lower standards than Fannie Mae did.

Again this was OK from the first decade or so but then when securitized mortgages rendezvoused with subprime and subprime rendezvoused with contracts written against the risk of bonds going bad, the whole house of cards just goes higher and higher and because in the '80s and the '90s Democrats fingerprints were on this, too. Regulators were not really interested in keeping up with these new risk products that Wall Street invented.

So, then in 1999, the capstone of this is the repeal of the Glass-Steagall Act. [12] One other aspect of this was Greenspan's failure to enforce the Home Ownership Equity Protection Act of 1994, [13] which, had Greenspan enforced it, subprime never would have happened, because that legislation required anybody who made mortgage loans to use sound underwriting standards. And you had Democrats and Republicans preventing the Commodity Futures Trading Commission from regulating many categories of derivatives.

So it was in the air, the idea that whatever Wall Street invents is by definition efficient, by definition virtuous, by definition self-regulating, and little by little a whole parallel banking system gets created that is beyond the scope of what the regulators can monitor.

Nor did Roosevelt live to see Americans come very close to rejecting the task he defined [14].

President Obama traveled to Wall Street on the anniversary of the collapse of Lehman Brothers that triggered the worst financial debacle since the Great Depression. His purpose was to challenge Wall Street's barons...

The president invoked country and the common good. "Instead of learning the lessons...of the crisis, [some in the financial industry] are choosing to ignore them. They do so not just at their own peril, but our nation's." Obama called on Wall Street to act on its own, to overhaul pay systems, to level with consumers, to join with him in defining reform, but his tone was almost wistful. As he knows all too well, for much of Wall Street, patriotism is for suckers. And in Washington, private interests are rolling over the common good.

...We are witnessing a harrowing test of our democracy. America is a big, bustling and entrepreneurial country. We pursue our own passions and pursuits, are jealous of our freedoms, and begrudge governmental intrusions. But in a crisis—faced with depression or war, our history tells us many become one. We join together for the common good.

Well, it is hard to imagine a greater crisis than the one this country has faced over the last years. A middle class that has suffered a lost decade. Two wars. The Great Recession. Gilded Age inequality. Catastrophic climate change accelerating faster than most predictions.

Yet, we haven't come together. Wall Street lobbies against reform. Derivative traders will ante up hundreds of millions to block regulation of credit default swaps. Goldman Sachs is back to computerized gambling and billions in bonuses. The insurance companies are spending over a million-and-a-half dollars a day against comprehensive health-care reform.

Close to the end of his movie, after having traveled across the country and revisited various points in history, Moore's journey brings him to the National Archives [15], for a personal visit with the Constitution [16]. Almost as if in answer to modern day teabaggers who wave "the U.S.S. Constitution" [17] and declare it says nothing about "the government taking over health care," Moore studies it and finds terms like "capitalism" and "free market" strangely absent.

Instead he notes that it repeatedly references the notion of "general welfare." [18]

So I sort of have to wonder why we can be having this health care debate without the whole thing being constantly framed in terms of our general welfare. You know, like it says in the Constitution:

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America....

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States;

So, where are liberal values in this debate, anyway? Where are America's founding values?

Moore's is in many ways a jeremiad against capitalism, the worship of profit, the sanctification of selfishness, and the suffering it has wrought, but at its a warning that all of the above has brought us perilously to the point of becoming a nation that has abandoned the very idea of the common good.

It's also a reminder that we must not be governed by capitalism, nor should we worship it, but that we should use it — where appropriate — to accomplish the task before us; and where it isn't appropriate to the task, set it aside and pick up another tool.

Having reminded us of that, and shown us the other tools we've abandoned for so long, by the end Moore tells us that the task before us is the same as it was after the crash of 1929, during the Great Depression and the Roosevelt era.

We must restore the common good, and having done so we must maintain it. This time.

Finally — politely, if also wearily — he asks us to "Get to work."

While there is still time.