Democratic capitalism is unique in world history. It combined the best economic system, capitalism, with the best governmental system, democracy (or republic, if you prefer).
It occurred after unmanaged capitalism self-destructed in the “Roaring Twenties,” and a wise government used the democratic process to protect the economic interests of America’s poor and middle class against the increasing and ruthless power of the wealthy.
“The wealthy” does not refer to specific rich persons; it’s an historical reference to the wealthy as a class. Legitimate historians like Arnold Toynbee and Will Durant point out that the wealthy—as a class, (with individual exceptions)—typically increase their power and wealth to levels that ultimately destroy societies. In fact, unsustainable income and wealth disparity between rich and poor is frequently the first sign of national disintegration.
Progressive federal legislation from 1932 to 1980 relating to minimum wages, taxes, workers’ rights to organize, working conditions, consumer protections—and even investor protections—eventually led to the creation of the biggest and most vibrant middle class in history.
This political/economic system thrived, with fluctuating ups and downs, until 1980, when a succession of conservative “free market” political administrations reversed federal regulatory, fiscal and monetary policies. In effect, they transferred control of our economy from a democratically elected government to America’s most wealthy and influential citizens.
Federal policy changes included huge tax cuts to the wealthy and corporations, bailouts of “too big to fail” financial institutions and their investors, cuts in benefits to working class Americans, and—worst of all—they forced working Americans to compete with the poorest paid and most brutally treated workers in the world. This led to drastic cuts in unions’ power to negotiate for higher wages and better working conditions, chronic higher unemployment levels and reduced wages, relative to inflation.
Good federal government—a government that ensures that the welfare of the middle class and poor are protected from the power and influence of the oligarchy—is absolutely essential for our economic future. The reason a good federal government is essential is explained elsewhere throughout this website.