Sign up for our daily briefing
Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.
Stay on top of the latest market trends
Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.
Sports news worthy of your time
Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.
Tech news worthy of your time
Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.
Get the inside stories
Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Want a daily digest of the top Denver news?
Get a daily digest of the most important stories affecting your hometown with Axios Denver
Want a daily digest of the top Des Moines news?
Get a daily digest of the most important stories affecting your hometown with Axios Des Moines
Want a daily digest of the top Twin Cities news?
Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities
Want a daily digest of the top Tampa Bay news?
Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay
Want a daily digest of the top Charlotte news?
Get a daily digest of the most important stories affecting your hometown with Axios Charlotte
Illustration: Sarah Grillo/Axios
America's increasing dissatisfaction with capitalism, and its concomitant embrace of socialism, is rooted in the degree to which inequality has increased in recent decades. When all new wealth is retained in the top 1%, the morality of wealth creation switches from good to bad.
Why it matters: Greed — the desire for economic growth — creates perennial wishful thinking with respect to the anticipated consequences of that growth.
- The promise that maximizing economic growth will "lift all boats" has proven hollow.
- The financial crisis of 2008-09 made for a highly unsatisfying morality tale. It devastated struggling borrowers with weak credit ratings, while leaving the financiers who created exploding monstrosities like synthetic CDOs relatively unscathed.
The big picture: Greed is sinful, yet is also the engine of capitalism.
- That deep tension has historically been reconciled with some version of Gordon Gekko's "greed is good" speech — elaborate reasons why the pursuit of profit is really in the best interest of all.
- Flashback: As far back as 1936, the great economist Joan Robinson described economics as a "plan for explaining to the privileged class that their position was morally right and was necessary for the welfare of society."
One area where this all comes to a head is China, or specifically, America's willingness to open its economy to China. Longtime China expert Orville Schell has a masterful overview of U.S. engagement with China in The Wire China — and highlights some of the stated reasons in favor:
- "As people have commercial incentives, whether it's in China or other totalitarian systems, the move to democracy becomes inexorable." — President George H.W. Bush
- "By joining the WTO, China is not simply agreeing to import more of our products, it is agreeing to import one of democracy's most cherished values, economic freedom. The more China liberalizes its economy, the more fully it will liberate the potential of its people... The genie of freedom will not go back into the bottle." — President Bill Clinton
- "The case for trade is not just monetary, but moral. Economic freedom creates the habits of liberty, and habits of liberty create expectations of democracy." — President George W. Bush
- "The fact is that a thriving America is good for China and a thriving China is good for America." — Secretary of State Hillary Clinton
The bottom line: America's engagement with China over the past 50 years has undoubtedly created wealth in both countries. It has also cost an estimated 3.4 million U.S. jobs, and has consolidated power within a brutal communist dictatorship that controls the lives of more than a billion people.
- From Nixon onwards, U.S. presidents have dreamed that money and wealth would inevitably be accompanied in China by a generous side helping of freedom and democracy. They have all been wrong.