The system, which is basically entrepreneurial capitalism, offers to every hard working citizen the economic equivalent of that grade school promise about anybody being able to grow up to be president. This promise is that with a little ingenuity and a lot of hard work (this is a trick condition - it means that if you fail, you just didn't work hard enough!), anyone can start a business and get very wealthy in the process.
It is true enough that in the United States just about anyone can start a business, at the drop of a hat. I do think this is a Good Thing, broadly speaking. It means if I do something and want to try to make some money for doing it, all I have to do is follow the taxation and employment rules, and I can do it any way I want. What is misleading about the concept is how much riches really lie at the end of this rainbow, and the mythologies of the marketplace regarding things like hard work.
The reality is that very few people create businesses that ever do more than make them a middle class living in return for eighty hour work weeks.
Why do I think this is so bad? Well, it isn't actually bad that people can make that middle class living by striking out on their own. It is that the promise of being able to become very wealthy alters peoples perspective on their dreams and affects their political behaviour. This was is how the system is maintained, to protect the huge concentrated accumulations of wealth in this society, in this nation, in fact over the entire globe, from being used for the well being of the population at large.
One way is to keep people "feeling" conservative when it comes to taxation. I have heard many times when discussing the issue of the tax rates on the higher incomes that the person I am speaking with hopes someday to make that kind of money - and so they don't advocate "high" taxes on it. Remember how low the highest income tax rates are in the United States, while considering this. Well under fifty percent - which means that the people with the most to gain by maintaining a stable and civil culture don't even pay half of their millions of dollars in earnings to ensure that the people who suffer the most in this same society have their basic human needs met. The tax on capital gains, the income made from holding assets that increase in value and make money, is even lower (and there is a constant attempt to lower it even more!) This idle dream causes even people who never will be wealthy to defend low tax rates on those who already are, those who own most of the assets and reap almost all of the benefits of the system.
One thing I would like to point out is what this accumulated wealth actually consists of. So far as it is not "paper" wealth, the temporary product of speculation, it is the built up surplus generated by the hard work and efficiency of all the people who ever produced more than they consumed in their lives. This wealth however is controlled by a very few and is used to maintain the status quo rather than to improve living conditions for those who actually made it.
Now, there is nothing wrong with those who organise and manage this efficient production from being paid well for their services. Likewise, those who take on real risk in order to generate enterprises that foster this production deserve a healthy return when they succeed. The problem lies in that these same people largely control the political process and the media enterprises, and have no interest in the well being of society as a whole beyond forestalling violent revolution. So rather than using the tax system to rectify the excesses that naturally occur in a free enterprise system, it is used to benefit the people who are already its most highly rewarded beneficiaries.
I just think that if people are going to work very hard, and very efficiently, as they do these days, the benefits of that work should accrue to them more equitably. I would prefer higher wages and salaries to higher taxes - but neither is likely the way things work today.
(original date lost) rewritten 7/26/00