Is Bain Capital capitalism’s bane?

My mother would have called it a sticky wicket. That’s what Republicans seem to be dealing with after Newt Gingrich and Rick Perry began attacking Mitt Romney for killing jobs and pensions and practicing “vulture capitalism” during his time as CEO of Bain Capital.

Far from being converted Marxists, Gingrich and Perry see Romney’s vulnerability as a possible boon to their waning chances of ever being the Republican nominee for president.

Voters, like most Americans, are in an anti-corporate mood seeing corporations, not as people like Romney and the Supreme Court do, but as heartless entities that destroy communities, slash jobs, wages and pensions, all to benefit the CEO and a few investors personal wealth.

Yes, Rick Santorum, you claim there aren’t classes in America, but that’s not how America sees it. According to a new Pew Research Center poll, fueled by the economy and the Occupy Wall Street movement, 66% of adults believe the class conflict is strong.

Republican wrangling has unleashed a torrent of defenses for Romney and private equity companies. From NPR to Wall Street Journal, experts explain ad nauseum, how the role of these companies is to “turn around” floundering businesses and make them “wealth creators,” which then, experts tell us, make them job creators. After all if a business goes belly up, then there are no jobs at all.

Sounds logical, right? After all this is capitalism, and the name of the game is “wealth creation.”

What these experts don’t say about their carefully crafted storyline could fill a book. Actually, three thick books, called Capital, Volumes 1,2 and 3, by that 19th century genius Karl Marx.

And the Republican sticky wicket has unintended consequences: a chance to examine the true nature of capitalism, fatal flaws and all.

In my opinion, the two most basic flaws are how wealth is created and appropriated, and the drive for maximum rate of profit.

Businesses and their CEOs do not create wealth. It’s the collective effort of the toilers – be they white, blue or pink collar, American, Chinese or Indian, black, white or brown, young or old, who create the wealth, and much of the time with a partner called Mother Nature and her natural resources.

This country is littered with businesses that made profit, yet still moved their factories to lower-wage countries. Why? Because their profit was not the maximum they could wring out of their workers. And that’s what capital – and capitalism’s inner logic – demand. Maximum. If a business doesn’t get maximum – or attempts to get maximum rate, then that business gets swallowed up by the next group of investors, or corporation, or private equity firm, which will do whatever necessary to wring out that maximum rate of profit.

A business may make a ten percent return on investment. But that may not be enough for capital when investors demand 30 percent. And so goes the cycle.

But where does that 30 percent – or the multi-million dollar CEO bonus for that matter – come from? Did Bain become a highly profitable corporation because they “turned around” so-called floundering companies and “created” efficient “wealth creator” firms? Bain came in and slashed wages and pensions, even closed down factories for lower wage sites, and increased worker-productivity: employees working harder, producing more, for less.

And if that doesn’t do it, then corporations will demand laws and tax rates that can help them achieve maximum rate of profit.

If that means cutting public schools and libraries in order to feed the beast, so be it.

If that means allowing carbon, lead and mercury to be spewed into the air, water or soil, so be it.

If that means getting away with paying women less than men, or Blacks and Latinos less than whites, so be it.

If that means spending billions of dollars thinking up new ways to lie, cheat and steal and then to get them enacted as policies, so be it. The list can go on and on.

There’s a whole lot more to the inner workings of capitalism. But confiscating socially produced wealth for the 1%’s private gain and the drive for maximum rate of profit are key reasons why capitalism will give way to a more democratic system that many call socialism.

Marx placed a heavy emphasis on the working class and the battle for democracy. Under capitalism, there are many democratic struggles to be waged in politics, economics and social issues. Each democratic struggle contains a working class/ruling class essence as the class struggle contains the struggle for democracy.

It’s only through struggles for reform and democratic expansion can the working class and its allies draw the necessary conclusion that capitalism isn’t the be all and end all for human society. There are no short cuts in that process, but plenty of sticky wickets.

Photo: From Occupy St. Louis (PW/Tony Pecinovsky)



Teresa Albano
Teresa Albano

Teresa Albano was the first woman editor-in-chief of People’s World, 2003-2010, leading the transition from weekly print to daily online publishing and establishing PW’s social media presence. Albano had been a staff writer for People’s World covering political, labor, and social justice issues for more than 25 years. She traveled throughout the U.S. and abroad, including India, Cuba, Angola, Italy, and Paris to cover the 2015 United Nations Climate Change Conference. An award-winning journalist, Albano has been honored for her writing by the International Labor Communications Association, National Federation of Press Women, and Illinois Woman Press Association.