The Limits Of Free-Market Capitalism
Until a few years ago, my spiritual devotions were limited to the free market and the music of Patsy Cline. I’m sorry to say it’s just me and Patsy now.
Karl Marx may have been wrong where it really mattered—communism, to paraphrase Churchill, is government “of the duds, by the duds, and for the duds”—but he was spot on about the pitfalls of capitalism, particularly when it came to the entrenchment of social classes, the fetish of consumption, the frequency of recession, and the concentration of industry. Yet, like trained seals, we continue to leap through the flaming rings of a system that is contemptuous of the public good while rewarding those who feed off “free” markets and the politicians who rig them. Nearly three years after the global economy almost collapsed under the weight of a corrupt and inbred financial order, Washington is still mired between the false choice of the state or private enterprise as the proper steward of the general welfare.
It should be clear to anyone who has lost a cell phone signal in our nation’s capital or been denied health coverage because of a pre-existing ailment that capitalism’s endgame is not freedom of choice and efficiency, but oligarchy. Many of America’s top industries—agriculture, airlines, media, medical care, banking, defense, auto production, telecommunications—are controlled by a handful of corporations who fix prices like cartels. As Marx predicted, the natural inclination of players in a market-driven economy is not to compete but to collude.
Reporting in Asia and the Middle East for many years, I prayed to the same kitchen gods of untrammeled commerce that now bewitch the Republican Party faithful and the neoliberals who inhabit the Obama White House. In Asia more than a decade ago, I covered the liquidation of state assets as prescribed by the International Monetary Fund, perhaps the largest-ever transfer of wealth from public to private hands, as if it were a new religion that would transform economies from the Korean peninsula to the Indian subcontinent. Laissez-faireism, I wrote, would liberate consumers and domesticate once overweening state-owned enterprises.
In fact, privatization merely shifted economic control from corrupt apparatchiks to their allies in business, a transaction lubricated with kick-backs and sweetheart deals. That’s what happened in the Middle East, and it became the spore that engendered the Arab uprising.
The corruption of capitalism in America is all the more appalling for its legality. With the economy still struggling to recover from a housing crisis fomented largely by Wall Street’s craving for mortgage-backed securities, prosecution of those responsible has been confined to a single lawsuit filed by the Securities Exchange Commission against a lone financier. The system is still lousy with loopholes, and the Republican Party, which demographically as well as ideologically is becoming a gated community for white, southern males, is calling for more deregulation, not less.
Which brings us to the central failure of American capitalism: the excoriation of the state.
So deep is the mythology of the free market that we ignore the consequences of starving our schools, libraries, public media, and roads and railways. We expect our teachers to assume the burdens of parenthood and then blame them for failing education. We lament our dependence on foreign oil and the aviation cartels, but we refuse to underwrite a passenger-rail equivalent of the interstate highway system. We disparage the coarse reductionism of corporate-owned news outlets while neglecting public broadcasting, an isolated archipelago of smart, responsible journalism.
Our hostility to the public sector—fountainhead of the Hoover Dam, Mount Rushmore, the Golden Gate Bridge, the Los Angeles Coliseum, our national parks, and countless other public utilities and services in addition to the federal highway system—is inversely proportional to our reverence for private consumption. As the economist John Kenneth Galbraith wrote in his 1958 book The Affluent Society, “Vacuum cleaners to ensure clean houses are praiseworthy and essential in our standard of living. Street cleaners to ensure clean streets are an unfortunate expense. Partly as a result, our houses are generally clean and our streets are generally filthy.” Galbraith also noted the uniquely American conceit of sanctioning debt when households and private investors hold it but condemning it when governments do.
Should the feds nationalize banks and appropriate soy fields? Certainly not. At its essence, there is probably no more efficient way of establishing the price of a particular good or service than market economics. Not all transactions are so simple, however, and there are some services—healthcare, for example, or transportation—that often fare better more as public goods than as private commodities. In order to save American capitalism, we must appreciate its limits even as we struggle to harness its power.
By: Stephen Glain, U. S. News and World Report, June 2, 2011
The “Have-Nots” Sink While The “Haves” Smirk
The “race to the bottom” used to refer to the competition with low-cost foreign labor that threatened to undermine the wages of U.S. workers struggling in the same industries.
Now it refers to the competition between private- and public-sector workers to see who can become poorer faster.
In essence, that’s what the fight in Wisconsin is about. It’s also what last weekend’s Niagara Square rally with 250 union supporters was about.
But who’s going to foot the bill for the standard of living they want to protect? Middle-class taxpayers are tapped out. Wisconsin Gov. Scott Walker made that point, as did Gov. Andrew Cuomo when calling New York “functionally bankrupt.”
In other words, the money is gone.
But as private-sector workers turn on public employees, and non-union workers castigate their unionized brethren, the internecine warfare distracts from a more fundamental question: Where did the money go?
In a nutshell, it went up. Not in smoke, though it could have, as far as the middle class is concerned. Rather, it went to the top of the economic pyramid.
A Center on Budget and Policy Priorities review last year found that the gap between the top 1 percent and those in the middle and at the bottom “more than tripled between 1979 and 2007.” (If the wealthy lost any relative ground during the Great Recession, they’ve more than made up for it during the recovery.)
Similarly, the Economic Policy Institute — in its State of Working America report last month — found that average annual income growth from 2000 to 2007 went entirely to those in the top 10 percent, while “income for the bottom 90 percent actually declined.”
And what of those government workers lavishly compensated with our tax dollars?
A review by the center last week found that, when controlling for education, job tenure and other variables, “public workers are paid 4 to 11 percent less than private-sector workers.” A separate study by the institute found that state and local government workers make $2,001 less on average, even when benefits are included.
Yet the fight rages on among those in the middle of the pyramid.
Meanwhile, in its annual Executive Excess report, the Institute for Policy Studies calculated that CEOs of major firms made 263 times the average compensation of American workers in 2009.
SEIU Local 1199 Vice President Todd Hobler, who was at the Niagara Square rally, says such inequity gets accepted because the media suggest “that the goal of all people is to become rich, and that those who have fortunes deserve it and have earned it.”
But are corporate bosses 263 times smarter than you are? Do they work 263 times harder?
Yet despite the reams of data, the issue of inequity gets little traction in this country. Republicans philosophically don’t believe in greater income equality unless it occurs by accident, while Democrats have no beliefs at all that they’re willing to fight for.
The result is that anyone who mentions the income gap is accused of “class warfare,” which brings to mind a quote by billionaire Warren Buffett, whose Berkshire Hathaway owns The Buffalo News, that “my class is winning.”
But apparently working-class Americans are OK with that. We’ll dump teachers, close libraries and let parks go to seed because we can’t afford to pay more. Yet we’ll never ask, “Who can?” That’s not what we do.
Washington extended the Bush tax cuts for the top 2 percent; New York will let its surtax on millionaires expire. Both capitals are responding to working-class voters who apparently don’t want to “redistribute” wealth and are satisfied fighting one another for the scraps.
After all, we’re not Tunisians. We’re not Egyptians.
We’re Americans.
By: Rod Watson, News Columnist-BuffaloNews.com, March 3, 2011
Share This Blog
Unknown Feed- An error has occurred; the feed is probably down. Try again later.
mykeystrokes.com 