Longtime Seattle investor and entrepreneur Chris DeVore is managing partner of Founders’ Co-op.
I have a confession to make. I’m a Democrat. And a capitalist. Both, at the same time.
This didn’t used to be a position that needed defending. But over the course of my adult life these two ideas have moved farther and farther apart. The bond is now at the breaking point, and if it snaps, the party I grew up in will abdicate its once-legitimate claim to the best of the American idea.
The belief in free markets is actually shared by the vast majority of Americans, and while it may anger the populist fringe, embracing capitalism would be a rallying cry to centrists from both parties who despair for our future and are hungry for a message that makes sense.
Today, the party that has labored to defend and perfect the American experiment — with opportunity, justice and equal treatment under the law for all — has either lost its mind, or its memory, for the motive force that makes those ideals possible.
Take away the promise of a better life (immigration), the means to achieve it (capitalism), and the certainty that the fruits of your labor won’t be arbitrarily confiscated (rule of law), and the engine that has made America the richest, most powerful and most admired country in the world grinds to a halt, and the whole grand experiment comes to an end.
One can acknowledge all the historical errors that mar the American project — the displacement and murder of indigenous people, slavery and Jim Crow, the creeping capture of government by corporations, rich people, old people, the list goes on — and not lose sight of the three essential ingredients that make our strange and complicated country possible: capitalism, the rule of law, and a welcome embrace of all who wish to make America their home.
But if you listen to Democrats at both the state and national level today, capitalism is the enemy. Billionaires and their current avatars, AI and data centers, have become the bogeymen that electeds and party leaders invoke to stir outrage in the base.
What’s offered as an alternative isn’t economically coherent (“tax the rich,” when the top 10% of earners already pay ~75% of all federal income taxes; “ban data centers,” industrial-scale NIMBYism that simply pushes development elsewhere), but the message behind the slogans is clear: American prosperity is not something to be conserved, much less promoted; it is a natural resource that we somehow lucked into and can harvest at will, an overflowing fountain of wealth that will never run dry.
How did we get here? How has capitalism, the incontrovertible powerplant of democracy, become anathema to the Democratic party?
Today’s apparent loss of faith is actually rooted in capitalism’s undefeated record of success, coupled with the fitful but now accelerating failure of our democratic machinery.
It’s strange that the centrality of capitalism to our national project requires explanation, but that’s actually the best evidence of its truth: we have been so rich for so long, so embarrassed with our abundance of material and experiential choices, that we have come to take it for granted. We blithely assume that the neighborhood business owners and global corporations that make abundance possible, depositing bi-weekly paychecks in the bank accounts of their millions of workers and filling store shelves with the bewildering array of goods and services we enjoy every day, have simply always been there, will always be there, like the air we breathe.
This is a tragic mistake.
I have made a career, or more truly, I have found a calling, in supporting entrepreneurs from their moment of inception. Every business that exists, from the most humble corner cafe up to and including General Motors and Amazon, only does so because a small number of unreasonable people overcame extraordinary obstacles over many years to create something from nothing.
Every paying job, every charitable gift, every nickel of tax revenue that finances the safe and convenient world we all enjoy, springs from that improbable act of creation. The machinery of capitalism works so well, allowing one person’s vision to be transformed into millions of jobs and billions of dollars of tax revenue, that we have simply forgotten how extraordinary it is, how dramatic a break it represents from thousands of years of autocracy, feudalism, injustice and inequality.
The engine of capitalism is so efficient that it also conceals the deepest truth of all organic systems: companies, just like people, are born, live a short time, and then decline and die. This is hidden by the irrepressible generative energy of well-regulated self-interest: new companies arise to fill the gaps and address the shortcomings of current incumbents, fueling an endlessly diverse and creative process of regeneration. Every company that falters is replaced by two more, eager to serve the customers no longer satisfied by the prior wave’s lackluster efforts.
To paint a picture of this cycle of renewal, of the top 100 most valuable companies in America today, 15 were founded in just the past 10 years, 30 didn’t exist 25 years ago, 45 didn’t exist 50 years ago, and less than a third (30 of 100) have been around for 100 years or more. Great companies can seem like they’ve always been here, but in fact they are dying and being born every day. New companies have to come from somewhere, and that somewhere is the solar energy of the capitalist biosphere: entrepreneurship.
If capitalism, and its essential generative act of entrepreneurship, are so great, how could we possibly have turned against them?
The answer is both democracy’s greatest failure, and its most obvious path to redemption.
For at least the past century, Democrats and Republicans have divided themselves by their views on the role of the state. Democrats see government as an essential partner in the national project: providing critical infrastructure like roads and airports, securing the national defense, providing basic education and health services, and ensuring that the rule of law is applied fairly and equally, both to the companies that help our economy thrive as well as to its individual citizens. Republicans share many of these same views, but where Democrats push for more, Republicans have generally wanted less: lower taxes, fewer regulations, and a generally less-generous redistribution of national income to those lower on the economic ladder.
But to obtain the levers of power needed to advance their respective goals, both parties have relied on the obvious carrot of legislative giveaways to secure blocs of electoral support: farmers, labor unions, business owners, real estate developers, the list is as endless and varied as the economy itself. The result is a regulatory and tax system so stuffed with incentives, tax breaks and special protections that any citizen, even and especially those favored by one set of legislated advantages, can point to those in another group and cry “unfair!”, “undemocratic!”, “corrupt!”
It is this general stench of favoritism and corruption, slowly accreted over 250 years of electoral back-scratching on both sides of the aisle, that has brought us to our present crisis. Each party is so captured by its crazy quilt of protected electoral blocs and aggrieved parties, and so credibly able to point to the injustices perpetrated by the other side, that it becomes plausible to question the entire free-market edifice.
Great wealth now has the taint of theft, with no fine distinctions between entrepreneurial success and a systematic looting of the Treasury.
Things tend to continue as they began. So the most likely, and most depressing, scenario is that we are witnessing the final throes of the American idea. Two centuries of bipartisan regulatory capture have so encrusted our legislative and fiscal infrastructure that equal treatment under the law is now a bitter punchline, not the proud aspiration that once bound us together as a nation. Each party is now fully captive to its donor base, its electoral security purchased with gifts of regulatory ledgermain and dollars siphoned from public coffers, that there is precious little oxygen left for the promises on which the nation was built.
But to use this bipartisan failure of democracy to make a villain of capitalism, to paint as enemies of the state the few founders who have reaped extraordinary gains from their entrepreneurial ventures, when the vast majority are lucky to keep their employees paid and the lights of their modest establishments lit, is to eat out the very heart of the American project.
This is already playing out in miniature at the state level. Traditionally Democratic states like Washington, Oregon and California are pursuing confiscatory tax policies that villainize entrepreneurial wealth. The net result is not the hoped-for increase in state tax revenue, but a highly visible and accelerating flight of entrepreneurial wealth and energy to more capitalist-friendly domiciles like Florida, Texas and Wyoming.
This is not to argue that the unexampled boon of living in a society where one can both earn and keep great wealth does not come with serious civic obligations. By all means use regulation to ensure fair and safe business operations and prevent abuse. Levy the taxes necessary to nurture our remarkable civic infrastructure, allowing entrepreneurs to build new companies from scratch without fear of expropriation, whether by criminals or the state itself. Unquestionably demand that corporations be positive civic actors, as if they were citizens themselves, with all the rights and obligations that entails.
But as a lifelong Democrat, and a passionate believer in the fundamental goodness of the American idea, I have one simple request for the party I still believe is most likely to carry our national experiment forward: recognize capitalist entrepreneurship as the motive force that has made our extraordinary success possible, and restore capitalism as one of the central pillars of our national promise.
By continuing to take our unprecedented prosperity for granted, you misunderstand both its source and its chances of survival. Worse yet, by demonizing the engine of our shared prosperity, you are sowing the seeds of our collective destruction.
Stop now, before it’s too late.
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