CRAPITALISM

Free Markets, Lower Prices and the Fight to Put the People Back in the People’s House

By John H. Cox, Chairman, Hear the People

I believe in capitalism.

I believe in the entrepreneur who takes a risk, the small-business owner who works long hours, the inventor who creates something nobody else has thought of, and the worker who believes that hard work can lead to a better life.

That is the promise of a free market.

A free market is not just an economic theory. It is a practical idea: Let people compete to serve us.

Competition gives consumers choices. It pushes businesses to lower prices, improve quality, innovate and make products and services more available. When more people can compete, consumers have more power.

That is why I believe in free markets.

And that is why I am concerned about what I call “Crapitalism.”

Crapitalism is what happens when political influence becomes a competitive advantage—when companies, industries and organized interests can use money, lobbying and political relationships to protect their position from new competitors rather than winning customers by offering a better product or a better price.

That is not a rejection of capitalism.

It is a defense of capitalism.

We should fight Crapitalism because we want more competition—not less.

When Competition Stops Working for the Consumer

Think about what real competition is supposed to produce.

• Better and more affordable education.
• Better and more affordable health care.
• More affordable energy.
• More affordable water.
• More affordable food.
• More affordable housing.
• More choices and greater availability.

We have competition in many of these sectors. The question is whether we have enough genuine competition to consistently deliver the lower prices, better quality and abundance that functioning markets can provide.

When competition is limited, prices can remain high, choices can remain constrained and new ideas can have a harder time breaking through.

And this is where the political system enters the picture.

Businesses have every right to advocate for their employees, shareholders and customers. But when established competitors can use political influence to shape regulation and legislation in ways that protect their existing market position, the public can pay the price.

A company that cannot beat a new competitor in the marketplace has another option: help build a political moat around its business.

The moat can take many forms—regulations that make entry more difficult, licensing requirements, subsidies, tax preferences, procurement rules or other policies that favor established interests.

The goal is simple: limit new entrants and protect an existing customer base and pricing model.

• When that happens, the market isn’t working as it should.
• The consumer has fewer meaningful choices.
• The entrepreneur has a harder time entering the market.
• And the American Dream becomes harder to achieve.

Who Gets to Write the Rules?

• Government decisions affect virtually every part of the economy.
• Taxes. Energy. Health care. Housing. Transportation. Agriculture. Technology. Defense. Labor. Infrastructure.
• When government writes the rules, the people who influence those rules can have enormous power over the marketplace.
• That creates a simple question:
• Who gets heard?
• The average citizen does not have a team of lobbyists walking the halls of Congress.
• A small-business owner generally does not have a Washington office filled with policy specialists.
• A family trying to buy a home does not have a political action committee.
• Organized interests do.
• And that is where the connection between Crapitalism and our political system becomes impossible to ignore.
• Competitors can provide funding and political support in an effort to shape legislation and regulation that protects their competitive moat. The more expensive and complicated it becomes to compete politically, the greater the advantage for organizations that already have money, access and infrastructure.
• The cycle feeds itself.
• Money helps build political access.
• Political access can influence policy.
• Policy can protect established interests.
• Protected interests have more resources to invest in maintaining that position.
• And ordinary citizens are left asking why everything seems to cost more and why opportunity seems harder to find.

The Donor’s House

There is another problem.

• Our elected leaders are supposed to hear us.
• They are supposed to listen to the people they represent.
• But too often, the people who can get their attention are the people with money, organized interests and political infrastructure.
• They don’t hear us.
• They listen to the donors.
• They listen to the interest groups.
• They listen to the political professionals.
• We want them to listen to “We, the People.”
• That is the reason behind Hear the People.
• The House of Representatives was supposed to be the People’s House.
• Too often, it doesn’t feel like our house.
• It can feel like the Donor’s House.
• It can feel like the Media’s House.

That is wrong.

The House should belong to the people who live in the communities it represents.

The Problem Is Bigger Than Republican or Democrat

Republicans and Democrats disagree about plenty of things.

Taxes. Regulation. Health care. Energy. Government spending. Social policy.

But both parties operate within a political system that has become increasingly dependent on money, fundraising, organized interests and expensive media.

This is not about declaring one party good and the other bad.

It is about recognizing a structural problem.

In my book, “Slay the Four Plagues: A Realistic Revolutionary Plan to Fix Democracy,” I identified four problems that have infected our political system:

Special-interest influence. Big media control. Negative campaigning. Extreme partisan voices.

These problems reinforce one another.

• Large congressional districts make campaigns expensive.
• Expensive campaigns increase the importance of fundraising.
• Fundraising increases the importance of donors and organized interests.
• Mass media becomes more important to reaching enormous numbers of voters.
• Negative and partisan messages become powerful tools for attracting attention.
• And the individual citizen becomes easier to overlook.
• That is how a democracy can become less personal at the very moment it becomes more expensive.

Bring Congress Down to Human Scale

• There is a way to begin changing those incentives.
• It starts with changing the scale of representation.
• A member of the U.S. House represents roughly three-quarters of a million people.
• That is an enormous number of people to know, listen to and represent personally.
• It is a media market.
• Hear the People’s Community Districts proposal offers a different approach.
• Instead of treating a congressional district as one enormous political marketplace, create smaller communities of approximately 7,500 people within each congressional district.
• That is a neighborhood.
• That is a community.

That is a scale where people can know who represents them—and where representatives can know the people they represent.

Imagine a political system in which a candidate does not need a multimillion-dollar media operation to introduce himself or herself to the voters.

Imagine a representative who has to answer questions face-to-face.

Imagine elected officials who know the concerns of actual neighborhoods because those communities are the foundation of their political accountability.

• That does not guarantee perfect government.
• It does not eliminate every influence or every political problem.
• But it could change the incentives.
• And changing incentives is where reform begins.

Free Markets Need Free Voices

• The connection between Crapitalism and electoral reform is simple.
• Free markets depend on competition.
• Democracy depends on representation.
• When political access becomes a competitive advantage, markets can become less competitive.
• When elected officials are more accountable to donors and organized interests than to the communities they represent, democracy becomes less representative.
• The answer is not to abandon capitalism.
• The answer is to make capitalism work more like capitalism.
• More competition.
• Lower prices.
• Better quality.
• More innovation.
• More choices.
• More availability.
• More opportunity.
• And to make government work more like representative government.
• More listening.
• More accountability.
• More local representation.
• More direct relationships between citizens and the people who represent them.
• Hear the People is about that second half of the equation.
• We want our representatives to hear us.
• We want them accountable to us.
• We want the People’s House to be the People’s House again.
• Not the Donor’s House.
• Not the Media’s House.
• Our House.
• That is why we fight Crapitalism.
• Not because we oppose capitalism.
• Because we believe in it.

And because we believe the American people deserve the benefits that genuine competition is supposed to deliver: lower prices, better quality, more abundance and more opportunity.