Opinion: Which capitalism are we defending?

Editor’s Note: Nick Hanauer is a Seattle entrepreneur, venture capitalist, and founder of Civic Ventures. He was an early investor in Amazon and is co-founder of Second Avenue Partners. This piece is a reply to Chris DeVore’s “Make Democracy Capitalist Again.”

Chris DeVore and I have been acquainted a long time. We move in the same Seattle circles — investors, founders, civic types who’ve spent careers betting on entrepreneurs. So when he published his GeekWire piece last week arguing that Democrats have lost their minds and declared capitalism the enemy, I read it carefully. Chris is a thoughtful person, and his argument deserves a serious response.

I’ll first acknowledge that I agree with some of Chris’s critiques of the Democratic Party. Many have indeed lost their way, in this state and nationally. Recent efforts to make Washington the least attractive place in the country for wealthy citizens are producing a stampede to other states — virtually every wealthy friend I have has either left or is planning to. It’s a catastrophe.

The most recent legislation to tax income above one million dollars is sensible on its own; it’s the combination of everything piled on top that makes our state so unattractive. Making the total tax burden here 5–10 times the alternatives isn’t progressivism; it’s stupidity.

But I don’t agree with Chris’s basic analysis. He is defending something real, with the wrong argument, in a way that obscures the actual problem we face. The reason he can’t quite see it is the reason many of our friends can’t — we’ve spent our adult lives inside a paradigm so dominant it feels like the weather.

There is no such thing as “capitalism”

Chris treats capitalism as a single thing. A motive force. A powerplant. Something you either embrace or demonize.

But there is no such thing as capitalism in the singular. There are many capitalisms. The capitalism of 1880s America — child labor, company towns, no weekends — was capitalism. The capitalism of 1955 America — 35% union density, 91% top marginal tax rates, the GI Bill building the largest middle class in human history, GDP growth rates double what they are today — was also capitalism. Denmark is capitalist. Singapore is capitalist. The neoliberal version we have run in America since roughly 1975, delivering four decades of stagnant wages for most workers while routing nearly all productivity gains to the top, is also capitalism.

These systems produce radically different outcomes — in wages, mobility, life expectancy, civic trust, democratic stability. The question is never “capitalism, yes or no.” The only question that has ever mattered is: which capitalism, designed how, for whose benefit?

Once you see that, Chris’s piece stops being a defense of an embattled principle and becomes something much harder to defend: a defense of the particular neoliberal form of capitalism we happen to have. The rules we happen to have written. The distribution we happen to be producing. As if this version were synonymous with the American project itself. It isn’t. And the conflation is the central error of his argument.

What his piece can’t see

Read Chris’s 1,500 words and notice what isn’t there. The word “inequality” does not appear. Not once. “Wages” does not appear. “Workers” appears once — as a count of people who receive paychecks from founders, never as economic actors in their own right. Monopoly power, corporate concentration, the middle class, housing affordability, life expectancy — none of it.

In Chris’s America, there are founders, consumers, taxpayers, and a state that either facilitates or confiscates. That’s the whole cast.

This isn’t an oversight. It is a worldview — the one producing the carnage Chris seems unable to perceive. When the bottom 90% of a country spends half a century watching productivity double while their wages stagnate, it is not “populist” for them to notice. It is arithmetic.

Since 1975, roughly $79 trillion has been redistributed upward from the bottom 90% to the top 10% — not through theft, but through the steady accumulation of rules written to favor capital over labor, shareholders over workers, assets over wages. If productivity and wages had stayed linked the way they did from 1945 to 1975, the median American household would be earning $120,000 a year today instead of $75,000. In 1985 it took one worker 39.7 weeks of work to pay for the basics of a middle-class life.  By 2022 it took 62 weeks.

American life expectancy is declining — the first sustained decline in a developed nation in a century. Deaths of despair have killed more Americans in the past decade than died in every war we have fought. A generation of young people cannot afford to buy a home.

The small-business owners Chris invokes as victims of “confiscatory taxation” are being crushed — not by taxes, but by monopoly concentration across every sector from retail to healthcare to agriculture, and by a customer base that cannot afford to spend.

Consider our “capitalist” healthcare system — the most market-driven in the developed world. We spend roughly twice as much per person as every other advanced country and get worse outcomes by nearly every measure: shorter lives, higher infant and maternal mortality, more preventable deaths. Medical bills are the leading cause of personal bankruptcy in America, a phenomenon that does not exist in any peer nation. If markets were the self-regulating miracle Chris describes, this would be impossible. It is the predictable result of a system designed to extract rents rather than deliver care.

Or consider time itself. American workers get less paid vacation, parental leave, and sick leave than workers in any other rich country. A French worker averages 30 days of paid vacation, a German 28, an American roughly 10, and a quarter of us get none. We built an economy in which labor has almost no leverage and capital has almost all of it. The differentials in GDP per capita that many point to as proof the American system works better can almost entirely be accounted for by this.

None of this happened by accident. Starting in the 1970s, a particular idea took over American business and policy: that the sole purpose of a corporation is to maximize returns to shareholders. Milton Friedman wrote it down. Jack Welch operationalized it. Business schools taught it for 50 years.

And it was a scam — a piece of ideology, dressed up as economic science, that licensed the systematic transfer of wealth from workers, customers, and communities to a narrow class of shareholders and executives. It is the reason insulin tripled in price, and the reason a company can lay off ten thousand workers and see its stock rise the same afternoon. It is not capitalism working. It is a specific ideological distortion of capitalism most of the developed world never adopted.

The defining feature of the paradigm we’ve been operating in for fifty years is not that it is cruel. It is that it is blind. When a paradigm cannot see the crisis, it blames the people pointing at it.

The cycle of renewal is the case for a different capitalism

The single strongest data point in Chris’s piece — the 45 of the top 100 companies that didn’t exist 50 years ago — is actually the best evidence against his argument. Amazon was built on internet infrastructure funded by DARPA. Google’s search algorithm was funded by NSF. The iPhone is a stack of publicly-funded research: GPS, touchscreen, lithium-ion batteries, Siri. Moderna’s mRNA vaccine rested on decades of NIH funding. The AI revolution was built on transformer research funded by federal grants.

The dynamism Chris celebrates is not capitalism in the abstract. It is the output of a specific mixed economy — a partnership between state capacity and private enterprise that we spent eighty years building and the last forty dismantling. His piece is, without quite realizing it, an argument for the system he imagines he’s defending against.

And about that other administration

Something else worth naming: Chris’s defense of free markets, written in 2026 and aimed at Democrats, contains not a single mention of the administration currently in power.

By any definition Chris himself would recognize, the Trump administration is running the least free-market, most state-interventionist economic regime in a generation. It imposes tariffs — which are taxes, however much the White House insists otherwise — at levels not seen since the 1930s, by executive fiat rather than legislation. It demands direct equity stakes in private companies as the price of regulatory approval. It plays open favorites, rewarding loyalists and punishing disfavored firms with investigations. It governs by slogan and grievance rather than rule of law. If a Democratic administration were doing a tenth of this, Chris would be writing a very different op-ed.

And yet much of the tech world — our world — has embraced it, with founders cheering moves from Trump they would have denounced from a Democrat. The permission structure is frustration with Democrats over taxes, regulation, and cultural politics. I share some of that frustration.

But frustration is not a principle, and the administration our peers have lined up behind is not capitalist in any meaningful sense. It is crony state capitalism — the kind that has hollowed out economies from Argentina to Russia to Hungary, run by people who have figured out that the fastest way to get rich is to be close to power. You cannot write a credible defense of free markets in 2026 without naming the regime dismantling them in real time.

The democracy problem

Chris titled his piece “Make Democracy Capitalist Again.” But the relationship is exactly backward. The threat to American democracy today comes from fifty years of an economic system that has made a small number of people vastly richer every year while the majority of Americans have grown relatively poorer, less secure, and less hopeful. No democracy in history has survived that arrangement indefinitely.

When economic gains flow overwhelmingly to a narrow elite for long enough, the political system eventually follows the money — through campaign finance, lobbying, regulatory capture, media ownership. Ordinary citizens watch their lives deteriorate while the rules keep getting written for someone else. They lose faith in institutions. They look for a strongman.

Trumpism is not the cause of our democratic crisis. It is the symptom of an economic order that has been hollowing out democratic legitimacy for forty years. The authoritarian turn we are living through is what happens when you run neoliberalism long enough.

When Chris argues that the path back to a healthy democracy runs through recommitting to capitalism, he has the causation inverted. The capitalism we have been running is what broke the democracy. You cannot have a functioning democracy and a runaway oligarchy at the same time. Eventually, you have to choose.

To Chris, and to people like us

The people working hardest to save American capitalism right now are not the ones defending it as-is. They are the ones willing to change it. The longer the version of capitalism we have chosen keeps failing the majority of our fellow citizens, the more likely it becomes that they will eventually decide to throw capitalism out altogether.

That is the lesson of every historical moment like ours — the 1890s, the 1930s, the late 1960s. When a system stops delivering for most people, most people stop defending it. And what comes next is rarely anything the people at the top of the current system would prefer.

The quicker people of good faith — investors, founders, civic leaders, Democrats and Republicans who genuinely believe in markets and in America — recognize that the form of capitalism we’ve chosen isn’t working for the majority of our fellow citizens and get serious about changing it, the less likely it becomes that those citizens will conclude capitalism itself is the problem.

That is the actual choice. Not capitalism versus demonization. Reform now, or reckoning later. I’d rather do the reform. I think, if he thinks about it, Chris would too.