Wall Street Journal Editor Warns That The Current Capitalism Is Harming The U.S.

 Most Americans support capitalism (even most progressives). But capitalism must be regulated. Without regulations, the excesses of the capitalist system can actually cause harm to a country and its citizens.

Here are some thoughts from Wall Street Journal editor-at-large Gerard Baker in an editorial in his newspaper. He is warning his fellow capitalists that today's capitalism is getting out of hand.

“The widespread popular dissatisfaction with the working of modern American capitalism may be the product of some real, objective problems in the way American capitalism is working: income and wealth inequality on a scale not seen in a century; the concentration of economic, cultural and increasingly political power in a class of technology leaders whose products are dissolving the bonds that keep society together; the tightening nexus between business elites and the people who control the political process; rampant corruption and a political establishment that doesn’t seem interested in accountability; the revival, after decades of stable prices, of inflationary pressures that are pushing the cost of living to painful levels.

These are the conditions that historically have made for collapsing popular faith in the system and demands for something radical to replace it.

At some point disintegrating cohesion produces costs — social, economic and political — that undermine the benefits of the inequality and erode support for the system itself.

By almost all measures, American income and wealth inequality have been increasing sharply in recent decades and social and economic mobility falling.

The New York Federal Reserve reported in June that the labor share of income — wages and salaries — fell to its lowest level in 80 years as returns to capital continue to soar. Studies of intergenerational mobility suggest the inequality is becoming embedded in what looks increasingly like a class-based socioeconomic model. The proportion of Americans earning more than their parents has dropped precipitously in the past 50 years and is expected to drop further. With the adoption of artificial intelligence promising — or threatening — to return ever greater rewards to a diminishing number of those best placed to exploit it, the trends will intensify.

Most of the causes of America’s economic dysfunction are the result of a capitalism that has mutated into a system run by and for large corporate interests. If you look at America today and see a perfectly functioning free-market economy, a ‘neoliberal’ utopia guided by the invisible hand of Adam Smith, then you need to take off those rose-tinted spectacles and take a closer look: oligopoly-level industrial concentration in almost every sector, endemic cronyism, the application of regulation, legislation and policy for the benefit of big companies, a ruinously expensive healthcare system run principally for the benefit of insurers and pharmaceutical companies. In short, the steady accretion of market, economic and political power by a business-political class that promotes its own well-being at the expense of competition, the market and ultimately the people."