The Fairy Tale of Capitalism: Author's Note

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From the first episode of the Fairy Tale of Capitalism, readers sent me comments such as
“I understand GDP now!”, and
“Interesting and certainly topical”, and
“The capitalism that you are describing IS what happens”, and
“Another delight that kept me entranced.”
These were good words, because others liked my writing FTC.

Other comments included
“I understood neither the economic fundamentals described in the article nor its goals”, and
“It’s not clear that it’s sarcastic”, and
“Am I missing something?”, and
“This particular blog doesn’t seem to be a Fairy Tale at all”, and
“So what?”, and
“I understood this! Is there more to the story? What happens next?”
These were good words, because they signaled I might improve the story.

I know nothing with certainty. The reader should draw her own conclusions about the Fairy Tale of Capitalism. I see my vanity in my uncertainty and hesitation to state my conclusions. I don’t know what to do about it. Hence this note acknowledges my dear readers’ views, yet still offers no certainty.

I first used the term “Fairy Tale of Capitalism” in an email to my good friend Dr. Stetson. I wrote that Republicans seemed to rely on the Fairy Tale of Capitalism. (In fairness, not only Republicans, but also Democrats and the smaller parties indulge in numerous economic fantasies.) My articulation of FTC didn’t then exist, but the term "Fairy Tale Capitalism" had been used. The Republicans asked us to believe that Capitalism (or something called “Capitalism”, or “private enterprise”, or something along these lines), with its Invisible Hand and Downward Trickle and other characteristics, will produce improved lives for all, if only the U.S. Congress will reduce regulation and income taxes. I noted the Republicans sincerely believed this, apparently, as did Joe the Plumber, many of the Tea Party, and many of Mr. Trump’s supporters in his presidential campaign. I think this notion of Capitalism breaks up on rocks of measured empirical reality.

Empirically, historical tax cuts and deregulations hadn’t produced improved lives for all. In recent decades, in the United States, for the wealthiest ten percent of the people, incomes improved. For the next 40 percent, there was relatively little change. For the remaining 50 percent, incomes declined and one-eighth of households were “food-insecure” (that is, starving or nearly so) . For the wealthiest one percent, income growth and relative wealth were fabulous, spectacular and colossal. Where was the Invisible Hand distributing goods to the 50 percent? Where was the Downward Trickle’s distribution of prosperity? Instead, weren’t the Invisible Hand and the Downward Trickle in a class with Santa Claus and the Eight Flying Reindeer?

If my words are provocative, it is to challenge, not to insult. Competitive markets and private property are powerful tools. They can provide incentives and disincentives that encourage vigorous production and distribution of useful goods. Our society, collectively, devised them. Not to use them would be negligence, for the goods they provide are useful to many people. But they are merely tools. They aren’t innately virtuous. Both bad and good things have been accomplished with them. Some things they can't do. Let us seek wise usages.

One evening during a long bike ride, my brother Rock and Dr. Stetson and I stopped at the Third Base Tavern. While sampling a delicious unique house-made firewater, we conversationally arrived on the topic of Job Creators, a term widely (though incorrectly, in my opinion) used as a rough synonym for business owners or entrepreneurs. I said there was no such thing, that while business owners and entrepreneurs existed, they didn’t “create jobs”. My companions said on the contrary that, “obviously”, they did. I could only shake my head and inarticulately mutter “It’s just not so.” I felt I must find a better way to state my case. That moment was the call, and I answered the call. A few days later I returned home and wrote the first episode “The Fairy Tale of Capitalism: The 90 Percent”. Incidentally, that first episode isn’t about the Ingenious Innovative Job Creators, for that’s another story.

In the Fairy Tale of Capitalism, I want to describe some of the numerous regions of economics. The episodes of FTC should be understandable. Each should explain some arcane complexity. Sometimes I don’t achieve that, though I try. If the story begins to make no sense, just skip to the next paragraph. Much of FTC doesn’t matter much, for it is a dramatization and a comedy. Much of it presents central economic concepts. I flatter myself to think I write FTC with lucid infallibility, but as a child of the Enlightenment, I’m honored knowing read with skepticism. Ultimately, I want to explain how the Downward Trickle is merely a diminishing feeble trickle, how the Invisible Hand can punch you in the nose, and how the Ingenious Innovative Job Creators don’t create jobs. The episodes occur in random order, more or less. There is no conclusion but yours.

I hope you enjoy reading the Fairy Tale of Capitalism.

Petaluma, California, August 21, 2017

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I'm indebted to my friends who gave me the benefits of their comments on prepublication drafts, their corrections, their criticisms and advice, and their encouragements.

Images and Sources

Images may be freely used in reproduction of this article. They are my own or used in compliance with fair use doctrines of copyright law.

Alisha Coleman-Jensen, Matthew P. Rabbitt, Christian A. Gregory and Anita Singh, "Household Food Security in the United States in 2015" (Sep 2016, United States Department of Agriculture, https://www.ers.usda.gov/webdocs/publications/79761/err-215.pdf?v=42636)

Emily Eisenlohr, "Fairy Tale Capitalism: Fact and Fiction Behind Too Big To Fail" (2010, http://amzn.to/2x7cBqS)

Mihir Shah, "Fairy tale capitalism" (Apr 24, 2014, The Indian Express, http://indianexpress.com/article/opinion/columns/fairy-tale-capitalism/)

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