Capitalism & Long Term, Broad-based Prosperity, Part One

Can capitalism create broad-based prosperity for a long period of time? Progressives have argued that capitalism can only sustain full employment and reasonable wages (and benefits) during times of major war, when large parts of the working population serves in the military, leaving job openings to the civilian population. The scarcity of labor then drives up wages (and potentially benefits), as businesses try to attract and keep workers. When I was much younger, this was one of the big economic arguments between both sides of the political spectrum, as the political feelings of the Vietnam War and the Cold War also stirred debate about economics, particularly capitalism.

When I studied economics in college, the term often used to describe the American economy of those times was "mixed." Our economy was basically "free enterprise" (I don't hear that term used as much anymore); that is, privately owned businesses, but with government regulations (federal, state or local) of certain business activities or practices* and with government programs, such as Social Security, income or medical assistance for certain elements of the population, usually elderly, although not necessarily poor, or for low income people, financed by special taxes or.by taxes paid into the general fund, which gave the American economy a socialist element (in the sense of 'shared responsibility in caring for others'). Laws and programs put in place during the Great Depression, and then during World War Two, and the expansion of American labor unions, helped smooth out the high level of income disparity prevalent before the Great Depression. Disparity remained relatively contained until the late 1970s, and it has only grown since that time, with huge increases in inequality since the late 1980s.

In Part Two I will have some data for various years.

* Just for example, "child labor laws" prohibited children being exploit...ah, I mean being employed by business. Minimum wage laws are self-explanatory, and overtime laws gave employees the right to higher wages after working so many hours, usually 40 hours per week. Banking laws kept traditional banking, like checking/savings accounts and home/auto loans, separate from riskier investment banking, like investing money in the stock market.

WORD HISTORY:
Long- This is the adjective meaning "measurement distance of a physical object or a duration of time." It is sometimes also used as an adverb. The word goes back to Indo European "dlonghos," which meant "long." This gave its Old Germanic offspring "lang(g)az," with the same meaning. This gave Old English (Anglo-Saxon) "lang" and "long," depending upon dialect, and it was quite some time before the spelling "long" won out. Very common in the other Germanic languages: German, Low German, Frisian, and Dutch all have "lang," pronounced similarly to "long", although some Low German dialect has "lank," with the harder ending sound. Norwegian and Danish also have "lang," Swedish has "lång," and Icelandic has "langur."