GRIEVOUS IGNORANCE OF ECONOMICS AND POLITICS (2 of 3)

(or The endless confusion of apples and oranges: PART 2)

Governmental agencies charged with little niceties such as environmental protection, public land management, labor, welfare and education, among other vital functions, would of course be abolished under extreme capitalism because, like its representative corporations, it favors endless cutting of costs. Cutting costs is usually easier than forcing consumers to buy more products, and there is no cost, they say, that cannot be cut. Except for profit, of course—that is the reason for living, to generate profit and acquire wealth.

 

Almost all true capitalists proceed with life’s daily chores under the misimpression that government exists for the same purposes as, and is subject to the same rules as, corporate capitalism. They really believe this, and only the rigorous studies imposed at Poverty School and Gambling School (see Populist Corrections at fixypopulist.com) have shown any impact at all in persuading them to alternative views of the quite different purposes of governments and corporations.

 

Under extreme capitalism many governmental functions are handed over—scot free if they can get away with it—to private for-profit corporations in the ideological pseudo-religious belief that 1) only avaricious corporate competition for profit can possibly manage any enterprise efficiently, and 2) wealth concentrated in a few people at the very top will trickle down to those below—or some of them, maybe—and thus create lots more nice fast-food jobs, thereby benefitting the whole of society with its blessings.

 

(A tactical alternative to corporations running our government, as implemented in recent years by capitalist lords who hate government, has been to starve government agencies through the highly politicized budgeting process so that when those agencies no longer have enough dollars or employees to carry out their duties the government haters can shout “See, see, I told you government couldn’t do anything as well as corporations!).

 

Exactly like communism, this religion-like belief-faith in capitalism is of course obvious fallacy to anyone with half a brain. Both communism and capitalism, remember, are opposite extremes on the yardstick. BUT—capitalism has irresistible appeal to certain acquisitive human instincts such as selfishness and greed which never really grow up beyond the spoiled child-brat petulantly grabbing toys with You can’t have it, it’s Mine!

 

Free-for-all capitalism has prevailed throughout the entirety of United States history. Including the long colonial period before independence, its four-century record is a constant series of booms and busts—economic prosperity followed by crash and ruin, as inevitably as sunshine and rain. That’s how capitalism works. It romped with special intensity in the decades just before the 1929 Wall Street crash that precipitated the Great Depression, and similarly both before and since the Wall Street collapse of 2007-08.

 

Most Americans take these booms and crashes for granted, presuming this is just the way life is. But it is not. Completely unregulated capitalism has never been tried, though the legal bandits known as eighteenth century privateers came close. Enormous corporate pressure has leaned in the privateer direction throughout American history—except for the anomalous years of prosperity, 1946-1979. Those years saw the heaviest regulation of corporations by government in U.S. history, when we met and overcame the back-to-back traumas of the Great Depression and World War II—and the American people thrived.

 

Lest we forget, the opposite ends of the yardstick are far from the whole yardstick. The extremes of total-control communism and no-control capitalism are not our only options.

 

Half-way right, between the yardstick’s extreme right end and its middle, is a hybrid economic-political model we might call “moderated capitalism” if we had ever bothered to give it a name. Under this model the government operates most of its own bureaucracy but contracts out certain governmental responsibilities—especially military functions—to large private corporations such as, to list a few examples, Lockheed Martin, Boeing, Northrop Grumman, General Dynamics, Raytheon, Halliburton and Blackwater.

 

Moderated capitalism places modest, always insufficient, controls on monopolies and too-big-to-fail corporations which continue to grow still bigger. It assures a partial social safety net to quite a few of the poorest people, but never anywhere near all the poor. Personal income taxes as a percentage of income are kept low, and corporate taxes even lower, in order to ensure insufficiencies in the social safety net. This half-right model idealizes competitive free enterprise to the level of sanctification. It purports to revere a theoretical equality of opportunity which it never achieves and largely ignores. And it values the symbols of nationalism higher than the real people who constitute the nation.

 

Moderated capitalism is pretty much what we have in contemporary America where a huge percentage of the poor, with no realistic prospect of ever rising out of poverty, live a continuously impoverished lifestyle except where surviving programs of the Roosevelt New Deal and Johnson Great Society still manage to mitigate some of the endemic economic hardship in some—usually declining—measure. Such pinko programs are under constant attack from capitalism’s cheer leaders, both extreme and moderated.

 

Half-way left, between the yardstick’s extreme left end and its middle, is a hybrid economic-political model called “socialism” which might also be called “cleaned-up communism.” In this model the government owns and controls its own bureaucracy plus some of the really big private stuff, like monopolies and too-big-to-fail corporations.

 

Under socialism, government assures major economic basics to all the people, and leaves the rest to free enterprise. Taxes take up to as much as half of personal income, and turn it into social services such as physician and hospital care that are scot free to every citizen. Everyone is assured sufficient income that no one will go hungry or homeless. There’s quite a bit of this in European countries where “democratic socialism” is considered normal. In the United States, except for the democratic socialist Bernie Sanders, most citizens are so indoctrinated they simply don’t comprehend the significant and important differences between socialism and communism, and use the terms synonymously.

 

The American antipathy to socialism has everything to do with the confusion of socialism with communism. Socialism is a pragmatic, and mostly successful, strategy by which capitalist countries have ameliorated the excesses of the capitalist system and as a result stemmed the tide of revolutions and civil wars. The gulf between communism and socialism is the gulf between Marx’s failed revolutionary fantasy and the wisdom of his suggested reforms. Thanks to President Franklin Delano Roosevelt, even the United States institutionalized some of Marx’s ideas, in the wake of the Great Depression of 1929, which Marxists believed was the death knell of capitalism—but it was not. By overhauling the banking system, enhancing the graduated income tax, and introducing social security, unemployment insurance, maximum working hours, minimum wages, and a plethora of other measures to benefit working people and strengthen their bargaining power, Roosevelt saved capitalism.

Shadia B. Drury (also in Free Inquiry, December 2015)

 

The middle section of the yardstick—that broad section between (and including) socialism on the left and moderated capitalism on the right—encompasses most countries in continental Europe plus Great Britain and Ireland, Canada, Australia, New Zealand, South Africa—and in many respects the United States, though this is changing. This middle ground of our yardstick has three dominant characteristics:  1) its political behavior is almost exclusively democratic but with occasional undemocratic lapses, the hypocrisy of which embarrasses us before the observing world;  2) its economics are a mishmash of socialistic programs blended with rampant capitalistic commerce;  and 3) it is an arena of perpetual struggle between people constantly trying to tug its economics more toward the left and other people constantly trying to tug its economics more toward the right—i.e., a struggle of ideologies.

 

At the present time in history the tuggers-to-the-right are winning this tug of war in the United States and are somewhat less successful in other Western democracies. Primary indicators of their slow but accelerating ascendancy include:  unchecked growth of powerful corporations into multinational mega-corporations which command levels of wealth and power exceeding that of many whole nations and are uncontrollable by any one nation;  increasing inequality in distribution of wealth, in every nation worldwide, between an extremely wealthy few and everybody else;  successful strategic use of colossal voter distractions with the practical effect of concealing their economic doings, such as abolishing a woman’s right to choose an abortion;  and slow but steady shrinkage of the middle class while the poor population grows ever larger and more impoverished.

These indicators are particularly evident in the United States. They developed as slow trends over the course of four decades and so are not especially noticed by those most affected—especially the young and people up to age fifty. The people most alarmed by this overall trend—because they recognize it as detrimental to the better interests of the American people as a whole—tend to be older Americans with long memories and a relatively few others who happen to pay attention to long-range social statistics. The alarm, however, is gaining more traction these days.

 

*          *          *

 

“Communism or democracy?”

People who don’t know much about yardsticks invariably confuse economics and politics. How often, for example, do you hear someone use the phrase “communism versus democracy”—vacantly unaware that they’re mouthing apples and oranges, unaware even that they should be embarrassed by so revealing their ignorance?

 

The facts aren’t hard to remember, though rarely are they ever taught in school:

  • on an economic scale the true opposites are capitalism versus communism;
  • on a political scale the opposites are tyranny versus democracy.

 

  • Economic capitalism can be either politically democratic or politically tyrannous. In the United States the trend since 1980 has been downhill toward a tyrannous form of extreme capitalism that is dividing and impoverishing the nation’s people.
  • Economic communism likewise could be either democratic or politically tyrannous, though—on the record—tyranny has reigned everywhere communism has ever been tried. That’s probably because the total sharing it calls for is more alien to human nature than the selfish greed that so successfully drives capitalism.

 

These truths are now academic throughout most of the world, because almost every country switched to the capitalist economic model after the ignominious fall of the communist Soviet Union. The successor Russian government runs its version of capitalism with a half-totalitarian model that contrasts sharply with more democratic western nations. China, another anomaly, governs the world’s fastest growing capitalist economy with an anachronistic still-in-control authoritarian communist party that so far has successfully used dictatorial decrees to compel things to go as the party desires. And of course there’s dreary North Korea, still propping up its obsolete dysfunctional communist economy with history’s most bizarre tyranny, which cannot be ignored because its petulant silly toddlers have nuclear weapons in their toy box and threaten belligerently, with great frequency, to use them against all parental critics who try to tell them No no, you must be nice, say please and thank you, feed your hungry people…

 

It is fact that historic communism has been far more tyrannous than democratic, though a few exceptions shone through with a little democracy here and there, briefly, always temporarily. As I’ve noted, communism’s incentives are unnatural. Capitalism historically has been, by and large, more democratic than tyrannous, though it too has displayed more than a little tyranny along the way. Doubters should examine the history of corporations’ violent suppression of America’s infant labor movement in the nineteenth century and early twentieth.

 

It also is fact that at no time in history has capitalism coexisted with anything remotely close to the democratic potential that should attend it. This remains true today because capitalism’s design, its functioning, its very DNA, is inherently undemocratic:  i.e., it is inherent that corporations—the delivery instruments of capitalism—must grow too large, they must seek to out-compete their competitors and become monopolistic, they must take unfair advantage of their customers and underpay their own employees. Like hogs rooting, as hogs must, that’s what corporations do. And if you think that’s pretty bad, communism’s record lacks even the potential to foster democracy. What a pair.

 

Be reminded, these are the extremes we’re talking about here, not the broad middle ground between socialism and moderated capitalism. Extremes of any kind tend to foster extreme ideologies. An “ideology” may be thought of as an ideal without any compassion, and a prime characteristic of ideologies is that they’re often dead wrong. And naturally so—they so often reflect and represent muddled extremist thinking. Closed mindsets. It is an economic ideology, roughly half a century old and now known as supply-side economics, that is causing so much of our current troubles—stagnant personal wages, extreme wealth inequality, political gridlock and willfully blind social divisiveness—in America. There were no such troubles—at least in this regard—from 1946 to 1979, the historical record of which is crystal clear, as follows.

 

[to be concluded in next week’s installment to this blog]

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