Politics and Economics: Two Looking Glasses - The Wise World Traveler: Becoming a Part of All that You Meet - page 46

What is usually referred to as capitalism or marketplace economics is a political eco-
nomy that gives buyers and sellers great freedom in economic transactions. But as the pre-
vious paragraph suggests, that freedom is never absolute. Laissez-faire (“let it be”) was the
dominant economic arrangement in Europe and North America in the nineteenth and early
twentieth centuries. But it was also an economic system of “boom and bust”—a system of
economic cycles in which prosperous times gave way to economic failure. And it was also
a time when workplace conditions were harsh. On-the-job injuries were frequent, wages
were determined by supply and demand, and no public benefits existed for the sick, the old,
and the unemployed.
In the Great Depression of the 1930s, economic suffering was intense and worldwide.
In the United States in 1932, nearly one out of four workers in the nation was jobless. In
Pennsylvania, wages were five cents an hour in sawmills and six cents an hour in brick and
tile factories. Describing Chicago during the Depression, Edmund Wilson writes, “There is
not a garbage dump in Chicago which is not diligently haunted by the hungry. Last sum-
mer in the hot weather, when the smell was sickening, there were a hundred people a day
coming to one of the dumps, falling on the heaps of refuse…digging in it with sticks and
hands.” [40]
In Europe and North America, the Great Depression brought voter demands for eco-
nomic change. Laissez-faire gave way to “Capitalism with a Human Face,” and the welfare
state was born. In each country, welfare benefits are determined by national wealth and by
an ideological balance between social equity and market equity. The balance is tipped, of
course, in dictatorial regimes, such as in China, Venezuela, Cuba, and numerous sub-Sa-
haran countries in Africa. What prevails in these places is the regime's own definition of
social equity—giving outsized rewards to Party members and the dictator's faithful follow-
ers.