Ben and I discuss Mitt Romney's venture capitalist past in our Scripps Howard column this week. My take:
This is the problem with the Republican version of capitalism, as practiced by Mitt Romney and so many of his Wall Street friends over the last few decades: Profit isn't just regarded as the highest virtue; often, it is seen as the only virtue.Ben's take: "Venture capitalism creates, sometimes through destruction. Crony capitalism merely stagnates."
It wasn't always this way. During the 1950s, a time when labor unions were ascendant, the American social contract expected that big corporations would make big bucks, yes, but that those employers would also provide their workers a comfortable living, and would even hang onto those workers during rough times.
Now, quarterly profits are the only thing that matter and if a few jobs have to be sliced to make the accounting work out, then that's what has to be done.
The result? Our businesses are richer. But our society feels poorer.
And Mitt Romney helped lead the way.
Profit isn't unimportant. What today's market enthusiasts forget, though, is that it's a means to an end not the end itself.
"It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner," economist Adam Smith said way back when, "but from their regard to their own interest." The Romney Republican version expects the butcher to buy out the brewer and lay off the bakers, which might maximize profits in the short term. But it leaves everybody hungry in the long run.
Today's lefties have a little slogan that sounds cool, but doesn't bear up under examination: "People, not profits." That doesn't work so well. Neither do profits without people. Romney's not a bad man for making a profit, but his venture capitalist past raises questions about whether he can truly serve America's citizens.