‘Beyond’ Capitalism?

September 5, 1955

In Newsweek of Oct. 25, 1954, I reviewed a book on America written by the Swiss economist, Prof. William E. Rappard, published in Paris, and expressed the hope that it would be translated into English and published here. I am glad to announce that this has now been done. The translated work appears under the title The Secret of American Prosperity (Greenberg, $3.50). Its publication date is Sept. 8. The occasion provides an opportunity to review another book published in French, but with somewhat different implications. On June 26 last I was startled to read a Paris dispatch to The New York Times which began: “Capitalism in the United States is a thing of the past, according to an official document circulated in France by the United States Information Service.” I sent for the document, which runs to 80 pages.

A good deal of what the book has to say is shrewd and sensible. In fact, most of the best things it has to say were already said in Professor Rappard’s book. Rappard, for example, selects four main elements as explaining the economic superiority of the United States: (1) Mass production; (2) the application of science to production; (3) a passion for productivity; (4) the spirit of competition. The document published by the U.S. Information Service also explains American productivity under these four heads, sometimes in strikingly similar words, though if any credit is given to Professor Rappard my eye completely missed it.

Yet the USIS document remains especially disturbing because of its repudiation of “capitalism.” It reveals no understanding or recognition of the capitalistic basis of American productivity. The book bears the title The American Economy (L’Economie Américaine), and the subtitle Beyond ‘Capitalism’ (Au-delà du ‘capitalisme’). The theme implied by this subtitle is carried out in the text: “America [my translation] has been a capitalistic state. . . . It has had its miserable proletariat and its injustices.” Again: “American life is no longer the life of a society essentially capitalistic. It is now approaching standards of justice and equality,” etc. What this book does, in brief, is to use the word “capitalism” pretty much in the same smear sense as the Marxian socialists who invented the word. It follows that, when general prosperity and productivity are to be explained, they cannot be explained on the assumption that America still has “capitalism.” It must have been superseded by something else. What this something else is, the USIS book never quite makes clear.

Nowhere, in fact, does this book give explicit credit for American progress in the capitalistic system. It explains how much the American economy owes to the beneficent interventionism of government: The TVA, farm-price support, FHA mortgage guarantees, minimum-wage laws, social security. Much is said of mass production, technical research, the spirit of competition, the raising of wages, the lowering of prices, the increase of purchasing power. But nothing is said about the basic capitalistic principles of which all these are consequences rather than causes. There is no emphasis on private property. Much is said about the willingness of American corporations to build new plants and to install ever new and more efficient machines. But it is not pointed out that for them to do this they must have acquired past profits to invest; they must be allowed profits, and they must have confidence that they will be free to make future profits.

What America has today is capitalism, at its highest development to date. If it is more productive than the capitalism of yesterday, it is primarily because the capitalism of yesterday made this possible.

This book of the USIS, in brief, is merely another illustration of the fact that while socialist and Communist governments have no hesitation in denouncing capitalism, the governments of capitalistic countries are afraid to defend capitalism. We fatuously deny that we have it, and spend millions of our taxpayers’ dollars in order to give the case away.