In 1983, in the midst of the Contra War against the Sandinista government of Nicaragua that had overthrown the dictatorship of Anastasio Somoza, a Franciscan nun from Milwaukee introduced me to the concept of co-operative economics. I was in Nicaragua participating in a program in which Catholics and Marxists were working together to find common ground for constructing an economic plan that would be good for Nicaragua. We were all trying to avoid the extremes of unrestrained laissez-faire capitalism and totalitarian communism.

We wanted a system of economics that would work—that would organically fit the culture of Nicaragua and function well in the realities of global economics. Ronald Reagan had been elected president of the U.S. in 1981 and was arming the Contras against the Sandinistas under whose protection we were conducting our investigations and dialogues. We were all acutely aware of what had happened to the popularly elected Salvador Allende in Chile in 1973 when Richard Nixon was president. Some of us had lost friends in that extremely violent military coup d’état that led to the vicious dictatorship of Augusto Pinochet. We wanted the story of Nicaragua to be different.

Of course, no one in power cared what we idealistic dialoguers thought. When the Soviet Union collapsed and China converted to communist party-sponsored capitalism, the triumph of capitalism all over the world—in one or another of its forms—seemed foreordained. It became dogmatic that capitalism is the only form of economics that works, protects individual liberty and creativity, promotes progress, ensures religious freedom. Capitalism, in essence, became its own kind of religion or ideology claiming jurisdiction over all elements of our post-modern societies.

Capitalism, however, is not an article of faith. It needs to be treated as a system of economics subject to the testing of empirical and scientific methods. It must be developed and applied in accordance with the core values of those societies which employ its principles and mechanisms. It is not an idol before which we must prostrate ourselves and mouth self-serving—and at times self-destructive—platitudes.

The primary flaw in theoretical capitalism is the assumption that the basic unit of an economy is an independent adult person who freely and rationally pursues her/his self-interest—let alone the issue of an enlightened self-interest. The work of behavioral economists such as Kahneman and Tversky demonstrates how statistically exceptional that assumption is in the real world.

Co-operative economics argues that the enormous productivity of individualistic capitalism can be creatively harnessed to meet the profound social needs of the community: in a healthy society, the good of the individual can be dynamically integrated into the common good of the community.

The successful fusion of ‘socialistic’ justice goals and capitalism in Scandinavian countries is usually dismissed—by liberals and conservatives alike—as unworkable in the U.S. because of our extreme sense of individualism and because of our heterogeneous population.

In her March 23, 2017 New York Times Op-Ed ‘Why Social Justice and Capitalism Don’t Mix,’ Miya Tokumitsu argues that it is not realistically possible for the profit motive and the social justice motive to co-exist in start-ups in a capitalistic framework. She quotes the work of Nicole Aschoff—The New Prophets of Capital ( 2015 )—to highlight the contradictions in our society between profit motive and the worker’s desire for security and justice.

I am reminded, however, of G. K. Chesterton’s quip “The Christian ideal has not been tried and found wanting; it has been found difficult and left untried.”

The populism that put Donald J. Trump in the White House is, among other things, a protest against dogmatic capitalism. This protest presents an opportunity for us to rethink our own brand of capitalism.

In Viking Economics: How the Scandinavians Got It Right—and How We Can, Too ( 2016 ), George Lakey shows us alternative economic models that hold the promise that we can all prosper in a just society, that we can make our own form of capitalism with a heart—if we really wanted to.


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03 May 2017 :  WCTimes

Nick Patricca is professor emeritus at Loyola University Chicago, president of Chicago Network and playwright emeritus at Victory Gardens Theater.