From the beginning of our nation, leaders like Alexander Hamilton and Benjamin Franklin favored the entirely new concept of free markets and entrepreneurship. Opposition arose from all sides from day one and has continued ever since with ebbs and tides of popularity and acceptance. Europe tried the Hamiltonian approach with the birth of the Industrial Revolution but traded freedoms for security with the adoption of the social welfarism model by Prussia for all of Germany in the 1870s. Today, only the U.S., U.K., Canada, Australia and New Zealand have any semblance of the free enterprise approach envisioned by the founders. All of Europe and most of the world have chosen the stakeholder approach to capitalism. The strength of the Anglo-American agency model of corporate governance has been waning and on a downward curve since the elections of 1932.
Unfortunately, corporate leadership in the United States has done a terrible job in supporting and explaining to John and Jane Doe the merits of capitalistic corporate economics. They have themselves to blame for this lack of leadership and must take a major responsibility for the continuing decline in public approval of capitalism.
The policies, programs and especially the attitudes of the Obama Administration are certainly not favorable to corporations or capitalism and probably enhance the attitude of ‘seeking shelter in the caves’ as evidenced among the Republican radicals in the Congress.
Our republican form of government requires two strong political parties. One-party dominance breeds the need for power -- and power corrupts. So it is best we cool down the rhetoric and find areas of mutual interest in keeping the Hamiltonian model of democracy alive and well.
James is executive director of the Center for Global Governance, Reporting and Regulation at Pace University in New York City. He is also program director of Pace University’s Certified Compliance and Regulatory Professional certificate program.