Wanted: A Middle Class Society That Works for Everyone

Professor Peter Dreier asks what kind of 'capitalism' we want?

This Labor Day, America seems to be holding its breath, trying to decide what kind of society it wants to be. Many Americans are wondering whether the country has lost its ability -- or our political will -- to sustain a middle class society that works for everyone. The current recession has deepened the anxiety and pain, but in many ways it has simply exacerbated trends that were underway for over a decade. These include widening economic disparities, a proliferation of low-wage and part-time jobs, and deteriorating social conditions. A growing number of Americans doubt that their children will be better off than they are.

Faced with an even graver situation in the Depression, President Franklin Roosevelt worked with Congress to give the federal government the tools it needed to revitalize the economy, put Americans back to work, and make business act responsibly. At the time, critics called him a socialist. But in retrospect, it is clear that what FDR did was to rescue capitalism.

We hear echoes of that same debate today. No matter what President Obama proposes -- health care reform, a stimulus plan of large-scale public works, extending unemployment benefits, protecting consumers from credit card abuse, increasing financial aid for college students, raising fuel standards on cars, and more -- Glenn Beck, Rush Limbaugh, and the right-wing mainstream of the Republican Party call it "socialism."

But in reality, the choice is not between "socialism" and "capitalism." It is between what form of capitalism makes the most sense for a healthy society.

One version of capitalism is characterized by free market fundamentalism, where consumers, workers, and families are on their own, and businesses do whatever they want, with little or no role for government. Let's call this "no rules" capitalism.

The other version of capitalism is one where society sets the rules and standards of commerce, regarding matters like protecting consumers, employees and the environment from irresponsible business practices, such as excessive pollution, risky oil drilling, predatory and reckless bank lending, unsafe workplaces, food, medicine, cars, and airplanes, minimum wages, and discrimination by race and gender. Let's call this "responsible" capitalism.