Nearly two years after the financial crisis helped push the nation into deep recession, even capitalism’s most ardent supporters concede it’s developed a bit of a bad reputation.
In our capitalist society, everyone knows that one surefire way to salvage a sullied reputation is to rebrand yourself.
And if it's capitalism itself that's suffering from the tainted image?
No problem, just call it "free enterprise."
Nearly two years after the financial crisis helped push the nation into deep recession, costing millions of Americans their jobs, their homes or their retirement savings, even capitalism’s most ardent supporters concede it’s developed a bit of a bad reputation.
Now, everyone from small activist groups to major business lobbying organizations are embracing a term that several surveys show Americans like better: free enterprise.
“There’s been a demonization of the word ‘capitalism,’ ” said James E. MacDougald, who founded The Free Enterprise Nation last year. The private company opposes healthcare reform, campaigns against what they believe is a bloated government workforce and seeks to limit union activity.
Although even MacDougald points out that the two terms are interchangeable to many people — Google “free enterprise” and the first result is a definition for “capitalism” — he believes there is a different connotation to capitalism.
“It’s been used so often by people … who are anti-corporate or anti-business that they’ve, I think successfully, created the idea that capitalism and greed are the same thing, where free enterprise isn’t greedy but capitalism is greedy,” he said.
A survey conducted earlier this month for the U.S. Chamber of Commerce found that 65 percent of small business owners had a very positive impression of free enterprise, while 45 percent viewed capitalism in the same light.
Individuals like free enterprise more as well. A Gallup poll conducted in February found that 86 percent of Americans had a positive image of free enterprise, while 61 percent had a positive image of capitalism.
'American Free Enterprise'
The most notable heavyweight behind the "free enterprise" movement is the U.S. Chamber of Commerce, which last year launched a campaign to promote the ability of private businesses to help heal the economy under the slogan “American Free Enterprise. Dream Big.”
The word "capitalism" was notably missing from the campaign’s message, the pledge it asked supporters to sign and even its website’s frequently asked questions section. Instead, "free enterprise" appears again and again and again.
Stan Anderson, managing director of the Chamber’s Campaign for Free Enterprise, said the high-profile business lobbying group has nothing against capitalism per se, although he thinks many people are naturally opposed to “isms.” But the Chamber felt “free enterprise” evoked a much broader principle that Americans could more easily identify with.
“To us, free enterprise really incorporates the concept of freedom and opportunity to choose, and you can choose to be a capitalist or you can choose to go lay on a beach,” he said.
Steve Lombardo, whose consulting group conducted the small business poll for the U.S. Chamber of Commerce, said one reason for the discrepancy is that Americans love things that are “free,” whether it’s free enterprise or free ice cream.
“Any time the word ‘free’ is part of the phrase I think that Americans — in particular American voters — are going to have a more positive feeling,” he said.
That said, Lombardo does think the recent deep recession and bad corporate behavior has given capitalism a bad rap.
“I do believe that in the last few years there has been some change in the perception of the word ‘capitalism,’ ” he said.
The Texas Board of Education expressed similar concerns when it voted earlier this year to nix the word capitalism from its social studies textbooks in favor of “free-enterprise system,” one of a host of conservatively oriented changes. One board member, Terri Leo, explained that capitalism had a bad connotation, like “capitalist pig.”
The term has also been derided in popular culture, most notably with the Michael Moore film about the financial crisis, “Capitalism: A Love Story”
Long history of free enterprise favoritism
Joyce Appleby, author of “The Relentless Revolution: A History of Capitalism,” thinks there is a long history of Americans favoring “free enterprise” over “capitalism.” She said that’s partly because so much of American life and history is based on the value of freedom in all its forms, be it religion or speech.
Still, she said she would not be surprised if “free enterprise” has gained even more favor in recent years. She said that is perhaps because “capitalism” — with its roots in the word “capital” — has come to evoke in people’s minds the finance and banking sides of the economic system, whose shortcomings precipitated the financial crisis.
“I think there are people — maybe all of us — who are proud of the strengths of our economic system and embarrassed about its weaknesses, and switching to ‘free enterprise’ is a way of staying with its strengths and ditching its weaknesses,” she said.
Dean Baker, with the liberal-leaning Center for Economic Policy and Research, notes that it’s not the only example of politicians on both sides attaching the word “free” to something to give it a more positive feel.
Although the U.S. financial markets have generally been regulated to some degree, they are often referred to as “free markets.” And even though trade agreements often have some stipulations and limitations, they are regularly touted by both parties as “free trade agreements.”
Reacting to the bad economy
It’s not surprising that people would view capitalism in a more negative way at a time when so many are facing serious economic difficulties, said Page West, director of the BB&T Center for the Study of Capitalism at Wake Forest University in Winston-Salem, N.C.
Still, he worries that by focusing on a different phrase the nation is missing an opportunity to think critically about the issues that have been raised by the unprecedented events of the last two years, such as the government taking a stake in private companies.
Nevertheless, he thinks criticism of capitalism will dissipate as the job market improves and more people start to regain their financial footing.
“What’s going to happen is the economy will come back at some point and the sort of pejorative aspects of capitalism will tend to disappear,” West said.
Meanwhile, Anderson says the Chamber will continue to aggressively promote the term free enterprise.
“That doesn’t mean we don’t support capitalism. Capitalism is an integral part of free enterprise,” Anderson said. “When you’re trying to brand an enterprise and you’re trying to drive discussion what you do is use the term over and over again."