private_label

What is a socialist? What is a capitalist? Both are labels for a set of ideas that include some beliefs and norms. Both incorporate beliefs about human nature and economic activity. Both also include prescriptions of certain behaviors or norms. Whenever we use these labels in discussions, we attach specific fixed beliefs and norms to them, regardless of the fuzziness of the labels. In a sense, their use is a form of political racism: all capitalists, as we label, or all socialists are bad. Or capitalism is bad. Or socialism is bad. The same kind of labeling and its consequences applies to liberal and conservative.

The error in reducing complex systems of ideas and actions to labels showed up in a recent article, by David Leonhardt in the New York Times. Titled, “American Capitalism Isn’t Working.”, it contrasted the world of business following WWII and today. My intention pointing to it is not about the substance of Leonhardt’s arguments, but about the dangers of labeling, that is, of abstraction or generalization.

The October 1944 edition of Fortune magazine carried an article by a corporate executive that makes for amazing reading today. It was written by William B. Benton — a co-founder of the Benton & Bowles ad agency — and an editor’s note explained that Benton was speaking not just for himself but on behalf of a major corporate lobbying group. The article then laid out a vision for American prosperity after World War II. . . At the time, almost nobody took postwar prosperity for granted. . .

“Today victory is our purpose,” Benton wrote. “Tomorrow our goal will be jobs, peacetime production, high living standards and opportunity.” That goal, he wrote, depended on American businesses accepting “necessary and appropriate government regulation,” as well as labor unions. It depended on companies not earning their profits “at the expense of the welfare of the community.” It depended on rising wages. . . The headline on Benton’s article was, “The Economics of a Free Society. . . And the economy — and American business — boomed during this period, just as Benton and his fellow chieftains had predicted. . .

Things began to change in the 1970s. Facing more global competition and higher energy prices, and with Great Depression memories fading, executives became more aggressive. They decided that their sole mission was maximizing shareholder value. They fought for deregulation, reduced taxes, union-free workplaces, lower wages and much, much higher pay for themselves. They justified it all with promises of a wonderful new economic boom. That boom never arrived. . .

[Elizabeth] Warren wants an economy in which companies again invest in their workers and communities. Yet she doesn’t believe it can happen organically, as it did in the 1940s, because financial markets will punish well-meaning executives who stop trying to maximize short-term profits. “They can’t go back,” she told me recently. “You have to do it with a rule.” . .
Is Warren’s plan the best way to rein in corporate greed? . . . I’m not yet sure. But I do know this: American capitalism isn’t working right now. If Benton and his fellow postwar executives returned with the same ideas today, they would be branded as socialists. In truth, they were the capitalists who cared enough about the system to save it. The same goes for the new reformers.

Sorry for extracting so much of the article, but it was necessary to make my point. In this era of sound bites, sloppy journalism, very short attention spans, or continuous partial attention, conversations consist largely of labels, without adding context or further elaboration. Everything ending in “ism” is such a label. Do a little experiment: make a list of all the “isms” you have read or talked about recently. Here’s my list for starters. I already mentioned socialism, capitalism, liberalism, conservatism, and racism. I can add: originalism, sexism, ageism, Trumpism, modernism.

One a label is uttered or written, the parties involved tend to stop hearing, seeing, listening, or reading, and retreat into their heads and to whatever meanings about it they have already stored. Meaningful interactions become difficult, if not impossible. The reality of the situation, including the particularities of the people, other worldly objects, and ideas, fades from view. Resources for collaboration directed at problems to be addressed are limited to those attached to the labels, necessarily coming from the past.

The article I have quoted makes this limitation very clear. If we make the mistake of mislabeling people and their ideas, we will fail to examine the ideas fully or even at all. It is critical to look at the ideas, clear of any labels, if we are to be able to solve any of the great problems we are facing. The world we exist within is forever changing. The words we use to guide our actions need to adapt to these changes.

The sentence in boldface adds another important dimension. Caring about the system being addressed is more important than giving labels to what is being said or done. It matters not at all what we call Benton and his associates. Only that they were trying to build a world that worked for all, although that “all” was focused on life in America. Taking care of people, one at a time or collectively, requires close attention to the immediate world, not to some abstract set of words.

ps. For those who have been following my blog discussion of the divided brain and its relevance to the way we live, labels are a left-brain feature and care belongs to the right side.

One Reply to “The Chilling Effect of Labels”

  1. You are right. One finds the capitalism and socialism “isms” used more often and quite loosely these days. I would attribute it to the heightened level of economic inequality and the consequences therein. I think that something like 50% of the GenZ generation (those after the Millenials) now say that they prefer socialism over capitalism. What is it that they really mean? I would say they generally mean something like European social democracies that have provided better social welfare benefits than our “capitalist” system. But some mean something more than that. In a recent opinion piece in the Washington Post, the writer argued that in socialist system like the one that was in East Germany, women were treated more equally and had better sex.

    All that said, I do think that a focus on the kind of capitalism that we have these days, at least in the U.S., can be helpful if it draws attention to how in the last 40 to 50 years our system has changed in fundamental, government-assisted ways that have propelled the extensive inequity we now see. “Deregulation” has stripped away many of the constraints on private corporations that served to protect the public health and the public good. Taxing policies, instead of redistributing income, have served to enable the wealthier to become even wealthier. And on it goes. Capitalism can involve mixed economies with government and corporations working in partnerships. Taxing and regulatory practices can make a big difference in supporting a middle class and still allow for profit and growth. Corporations can be responsible not just to shareholders but to a variety of stakeholders

    So while as you suggest there are dangers associated with the terms socialism and capitalism, my hope is that an enhanced discussion of them just might help us get a better sense of the kind of political/economic system that we the people would like to live in.

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