« Previous Story | Front Page | Next Story »


Republican Orthodoxy Cracks, Capitalism Trumps 'the Right'

By Richard Head
Opinion | June 25, 2011

elephant-on-his-head.jpgBASEHOR, Kan. - The poor Republicans. They've been in such a hurry to run to the microphone to denounce anything that runs afoul of their cherished "no taxes, no regulation" ideology that they've neglected to notice that they're increasingly becoming irrelevant as a party of ideas. In a sign that those cracks are growing ever larger, Senator Tom Coburn, (R) Oklahoma, submitted a bill for consideration that would eliminate tax subsidies for the ethanol boondoggle, something that Grover Norquist, head of Americans for Tax Reform, said amounted to a tax increase.

Fareed Zakaria, in his recent Time Magazine opinion piece, wrote about conservatives' outmoded ideology, saying,

Consider the debates over the economy. The Republican prescription is to cut taxes and slash government spending -- then things will bounce back. Now, I would like to see lower rates in the context of tax simplification and reform, but what is the evidence that tax cuts are the best path to revive the U.S. economy? Taxes -- federal and state combined -- as a percentage of GDP are at their lowest level since 1950. The U.S. is among the lowest taxed of the big industrial economies. So the case that America is grinding to a halt because of high taxation is not based on facts but is simply a theoretical assertion. The rich countries that are in the best shape right now, with strong growth and low unemployment, are ones like Germany and Denmark, neither one characterized by low taxes.

If you listen carefully, Republicans never say that U.S. corporations have the highest taxes paid. They always say that the U.S. has the highest tax rates. Indeed, an article in Friday's Wall Street Journal admitted as much in print by saying,

As other countries have reduced corporate taxes, the U.S. has one of the world's highest top rates, at 35%, although effective rates everywhere can be substantially lower depending on tax breaks and other incentives.

Ahem. Substantially lower.

In recent months, Harvard Business Review, Bloomberg Business Week, and Fortune Magazine have all openly questioned the Republican orthodoxy of "no new taxes, no regulation" of business. That fact alone speaks volumes about how business is treating the Republicans' intransigence over matters of taxation and regulation. The inconvenient fact that the Republicans' two intellectual stalwarts in their argument -- Friedrich Hayek and Milton Friedman -- have begun to be marginalized again must really add salt to the wound.

Corporate Capitalists are, once again, coming around to the realization that they have a responsibility to do more than just make money. Milton Friedman was a free-market ideologue of the first order and, for example, had no truck with anything relating to corporate social responsibility, let alone regulation and taxation. Friedman famously said that The Social Responsibility of Business is to Increase Profits. And yet, the March edition of the Harvard Business Review contained an article entitled, "Capitalism for the Long Term," by McKinsey & Company's global managing director, Dominic Barton, in which he said,

Capitalism's founding philosopher voiced an even bolder aspiration. "All the members of human society stand in need of each others (sic) assistance, and are likewise exposed to mutual injuries," Adam Smith wrote in his 1759 work, The Theory of Moral Sentiments. "The wise and virtuous man," he added, "is at all times willing that his own private interest should be sacrificed to the public interest," should circumstances so demand.

The artful dodge that the business press is using these days to lay to rest (temporarily at least, lest they anger their Republican mouth pieces too much) the shop-worn cries about taxation and regulation, is interestingly being called "shared value," a term that includes not just shareholders but stakeholders (i.e., society as a whole). I sincerely hope that business--and corporate capitalists--have finally not only awakened to this reality, but continue to embrace it once the public's current anti-business, anti-Wall Street rage subsides. Dominic Barton goes on to say in the same article,

In other words, although a large majority of executives believe that social initiatives create value in the long term, they don't act on this belief, out of fear that financial markets might frown. Getting capital more aligned with capitalism should help business enrich shareholders by better serving stakeholders.

Time will tell, but it appears that the sleepy giant that is "middle America" has finally been goaded, shamed, and bankrupted into asking tough questions of their vaunted "free markets" and their Republican champions, and both are responding. Even if slowly and grudgingly.


1 Comment

I tend to vote Republican and yes I agree, too often big business buys out the votes. People forget that yes, sometimes taxes are necessary. Without good infrastructure (roads, sewers, schools, police) business cannot be done effectively.


Post your own comment here


Do you want to read more? You've only just scratched the surface at the Kansas Free Press. We have so much more to read! Nearly all of the pieces published here are timeless and relevant, regardless of when the articles were first published. To discover more, please take a look at our Table of Contents or go back to our Front Page.


Our sponsors help us stay online to serve you. Thank you for doing your part! By using the specific links below (clicking through from our site) to start any of your online shopping, you are making a tremendous difference. By using the shopping links provided on a Kansas Free Press page, you are directly helping to support the Kansas Free Press:



About This Page

This page contains just one story published on June 25, 2011. The one written previous to this is titled "Where Do We Go From Here?" and the story published right after this one is "Koch Brothers Outsource Jobs"

Our most current stories are always updated on our Front Page.

Other Archives

Interested in other topics? You may wish to poke around in our Table of Contents to find other sections and archives.

Do you want to explore pieces written by specific authors? You can find archives for KFP writers by reviewing our complete Directory of Authors and Writers here.

Recently Featured Stories

My Response As a Kansan to Jessica Valenti

Jessica Valenti has come on board The Nation magazine to fill in for Katha Pollitt as the feminist columnist while Pollitt is on leave to write a book. I've found reading Valenti's columns thought-provoking and insightful. She often takes …
Of Angels and God's Dogs

There might be a whole group of us out there--people who value our relationships with animals on a par with our ties to people. "Get over it--it was just a dog" does not resonate with us. Our society places …
Of Angels and God's Dogs

There might be a whole group of us out there--people who value our relationships with animals on a par with our ties to people. "Get over it--it was just a dog" does not resonate with us. Our society places …
Roots of the n-word

While N-word dialogue has slackened following Saline County Commissioner Gile's use of it recently, the word still has great power. So, let's look inward at the N-word. To reach a much deeper path to understanding, simply go to Ad …
Corporate Tax Reform

Basehor, Kans.--For an interesting twist on the corporate tax debate, look at Alan Sloan's opinion in the April 29 issue of Fortune Magazine. In all of the froth about corporate taxation, neither proponents of tax reduction, nor corporate critics, …

News and Opinion





Get Connected

See our FB page!
Subscribe for free!
[Feeds & Readers...]
Follow Kansas Free Press on Twitter, too!
Make Kansas Free Press your home page!

Journalists, sign in.

We're reader supported!

Whenever you use the specific links below to begin any of your online shopping, a portion of your sale goes directly towards the support of this site.

Tech Depot - An Office Depot Co.


Our sponsors help us stay online to serve you. Thank you for doing your part! By using the specific links above (clicking through from our site) to start any of your online shopping, you are making a tremendous difference. By using the shopping links provided on a Kansas Free Press page, you are directly helping to support the Kansas Free Press.

Thank you for your help!

Notices & Policies

All of our Kansas Free Press journalists are delighted that you are here. We all hope that you come here often, sign in and leave us comments, and become an active part of our community. Welcome!

Our writers are credentialed after referral to, and approval by, the editor/publisher of KansasFreePress.com. If you are interested in writing with us, please feel free to let us know here. We are always looking for Kansans who want to write about Kansas!

All authors here retain their own copyrights for their original written works, original photographs and art works. They welcome others to copy, reference or quote from the content of their stories, provided that the reprints include obvious author and website attribution and links to the original page, in accordance with this publication's Creative Commons License.

Our editor primarily reviews stories for spelling, grammar, punctuation and formatting and is not liable or responsible for the opinions expressed by individual authors. The opinions and accuracy of information in the individual stories on this site are the sole responsibility of each of the individual authors. For complete site policies, including privacy, see our Frequently Asked Questions. This site is designed, maintained, and owned by its publisher, Everyday Citizen Media. The Kansas Free Press, KansasFreePress.com, and Kansas Free Press are trademarked names.

© Copyright, 2008-2012, all rights reserved, unless otherwise specified, first by the respective author, and then by KFP's publisher and owner for any otherwise unreserved and all other content.