Capitalism isn’t one simple thing and it doesn’t always reward hard work, innovation, and risk-taking. It provides an uneven playing field in a win-lose “game” that’s often rigged.
In 1439, Johannes Gutenberg conceived of, built, and perfected the movable-type printing press. But he didn’t profit from his invention except by having his name known in history. Shortly before he finished his famous first printing of Jerome’s translation of The Holy Bible, his investor foreclosed on him and he lost it all.
During tribal days, there were bows and arrows, spears, digging sticks, mortars and pestles, scraping stones, drying racks, and other tools used in producing food, clothing, and trade goods; but it wasn’t a capitalist system. After a successful hunt, the hunter shared his kill with the rest of the tribe. If he had hoarded all the meat for himself, he would not be able to eat it; he would lose friends; and he would be miserable. The sharing came naturally – in all tribes all over the world. If we compare this to the days of the buffalo hunters, where a group of men slaughtered the great buffalo herds for their hides and left the meat rotting, you see a difference; not just in how it worked but the mentality behind how it worked.
Most tribal hunters were in it for the survival and continued well-being of their tribe. They weren’t competing with anyone else and they usually took only what they needed. Even though they fought wars with neighboring tribes, it was contrary to their religions and their nature to try and starve neighboring nations.1 They had been hunting buffalo for centuries and, while there were lean times when the grass was greener somewhere else and the buffalo wandered away, they always came back.
The buffalo hunters worked the Native Americans out of food and themselves out of work in a decade or so of wholesale slaughter. They won (temporarily) and they and everyone else lost permanently. The whaling industry did almost the same thing in about six years of taking twice the sustainable limit. And with the advent of motorized boats and the lack of enforced fish and game laws, the Gulf of Siam became a virtual maritime desert where even fish eggs were the objects of human predation.
John D. Rockefeller, Sr. didn’t get wealthy on hard work or good ideas, either. He was wealthy enough and influential enough that he could rig the system. If you were a wildcatter in Texas and you struck oil, Mr. Rockefeller would show up on your doorstep with a meager offer for your newly-discovered oil well. If you refused his offer, it was widely known that your new well would soon catch fire and you’d lose everything. Rockefeller didn’t need the money, but he used it to gain power and influence. And the more power and influence was substituted for kindness and happiness, the more he took. Like any other addiction, it was an endless cycle of greed and dastardly deeds.
Andrew Carnegie didn’t like his workers striking for better workplace safety and a slightly bigger share of the enormous profits, so he and his partner hired a hundred Pinkerton agents who shot and killed the striking workers for trespassing – on property these workers had built up and made profitable! We like to think of the millionaire earning his wealth, but it was often legalized stealing, extortion, or blackmail. There was a good reason many millionaires of this era were called “robber barons.”
My youngest brother had a modest but thriving remodeling business with 15 or so workers – until the Chinese showed up with a massive warehouse of prefab cabinets made in China! This is a different kind of monopoly – national monopoly, where the rules profit one country’s citizens at the expense of all other citizens. This isn’t anything new, either. The opium wars were fought to change Chinese law to allow the English to open opium dens in a couple of major Chinese cities. The US sent the Seventh Fleet into Tokyo harbor to force the Japanese to industrialize even though they didn’t want to and lacked the resources to continue without massive imports.
The Pope gave South and Central America to Spanish and Portuguese monarchs to distribute among their wealthier, more aggressive citizens with “land grants” complete with the legal right to seize the land from its rightful owners and terrorize them into working for them – and lawyers, judges, cardinals, bishops, and priests to legalize and sanctify the whole thing.
The California missions were built on what amounted to slave labor, people stripped of their freedom and coerced into building these fortresses up and down the land that previously belonged to everyone. Yes, the Franciscan monks were smart, coordinated and dedicated. But they didn’t pay for the land and they didn’t pay for the labor except in food, clothing and a Catholic education.
While I have cherry-picked among examples of capitalism, none exemplify win-win thinking except in the most biased of contexts.
Ford offered his workers an unprecedented five dollars a day and his consumers an unprecedented automobile for an affordable price, but his workers paid for their modest wealth with somewhat unsafe and thoroughly boring working conditions year after year. And this is the best employment example of the early Twentieth Century.
Had the workers collectively received a share of the profits (and losses) and a share of the administration, Ford could have done almost as well and everyone else might have thrived rather than just survived.
Had the steel workers been in on the management and both the profit and the loss of the steel industry in the 1960’s, they would have known that demanding higher wages was going to lose them their jobs unless they produced steel more efficiently. This lose-lose situation grew out of the adversarial relationship between owners and workers. A partnership might have evolved a better solution for all.
Today, most owners have retirement investment funds and diversified investments in markets or industries or commodities or companies that own companies that own companies. Furthermore, competitors own significant stock in each other’s companies and profits are now often invested in the company’s stock – or a rival’s stock – rather than in actual growth. Except for custom and tradition, there is no specific reason that labor shouldn’t be as liable for losses and as deserving of profit as stockholders.
The bulk of ownership in worldwide diversified stocks and mutual funds is devolving into fewer hands who have massive size, funding, political and media influence, and economies of scale. On the other side you have workers and consumers and the unemployed or marginally-employed. Modern “entrepreneurs” are often tied to restrictive franchise licenses that require participation in group advertising and set prices and costs.
While copyright laws allowed a limit on the time intellectual property was protected, Disney profited by using public domain stuff but then was so powerful that it extended it’s own copyrights and actively protected proprietary rights far longer than appropriate.
A consortium of high-tech companies collectively owns many of the patents and copyrights that allow them to manufacture cell phones and personal computers. It’s only a matter of time before they start squeezing out competition, although the economies of scale so favor large, well-funded companies that the monopoly already exists for all intents and purposes.
This isn’t really “free enterprise.”
So spare me the old and worn-out stories – or even the new stories about small companies like Microsoft “making good.” What Bill Gates did wasn’t new or inventive. He took other companies’ ideas and created a series of grossly inefficient but ubiquitous operating systems by getting them installed by manufacturers and using the platform itself for advertising and future sales. Microsoft openly practiced monopoly and, after years of expensive litigation, paid a token fine.
The vast majority of the time an operating system spends is in simple core algorithms and the increasing inefficiency of Microsoft software is due to an extremely lucrative but highly repressive agreement with the computer manufacturers to stop supporting older versions of the operating systems and require more and more speed and memory in newer operating systems. In short, Microsoft is built on advertising, monopolistic business strategies, collusion with the hardware industry, and shoddy programming. Microsoft didn’t invent the mouse. Microsoft wasn’t the first to create a WhatYouSeeIsWhatYouGet environment, either.
Another major reason that Microsoft rose to supremacy and monopoly is that accountants place no value on virtual goods. If it isn’t a finished product written on a CD or DVD, it doesn’t matter what it does or how long it took to develop, an accountant gives it a value of zero dollars and zero cents. Thus, in the short-term thinking found in most corporate offices, investment in a complicated operating system was and is a waste of resources. Furthermore, Xerox, the developer of this new technology, had no idea how to manage software development, so the company that developed the technology didn’t profit from it.
Many think competition is not only fair but effective and efficient, but it often is not.
The “cream” doesn’t always rise to the top. Hard work and inventiveness isn’t rewarded nearly as often as we think. And, despite the few successes in Silicon Valley, the people being rewarded the most are no longer inventors or innovators, but investors; people with excess, unneeded funds. And the history we get isn’t nearly the whole story. In the modern world, patents are owned by the funding entities rather than shared between them and innovators. And, more often than not, if an innovation is owned by an innovator, it is bought, at the start or shortly thereafter or the cost of litigation with gigantic profit monsters bankrupts the original developer into selling off this intellectual property. The little guy cannot compete with big money – it just isn’t possible or economically feasible.
Thomas Edison had a number of people working in Menlo Park and they all spent a lot of time creating a grossly inefficient light bulb that put off 97.8% of the energy as heat and only 2.2% as light. Still, it was a wonderful invention for its time. But to hear history tell it, Edison did it by himself. He didn’t. None of us do! Maybe he should get a bigger slice of the reward and acclaim, but ALL of it??
They say capitalism built America, but that isn’t completely true, either. Barn raisings were common where new neighbors were helped by the whole community. They later created co-ops to fight big money taking almost all the profit. Small farming and ranching has always been cooperative and community-oriented. Today, they work with small margins and huge capital investment for a modest income.
In general, big farming doesn’t care about the community or the worker or even the healthfulness of its crops. They’re in it for the money. Period.
Walmart would set up a “superstore” in a community and, within a few years, the community would be an economic desert, local industry no longer supported, lower-cost, high-volume foreign production killing them off.
So in the competitive world of full-on capitalism, the community buys the products (or starves, freezes, and tries to go it alone) and this supports “owners” monetarily. Except “owners’” quality of life suffers right along with their “customers.” There is no room for give-and-take, for win-win, for the quality of life to be considered in these business transactions.
Furthermore, as businesses get bigger and bigger and “owners” (stockholders) get further and further removed from what is going on and “own” stock for shorter periods of time, short-term profit is all most investors or investment groups see and becomes the singular criteria used for the determination of the stock’s value and the definition of “success.”
As companies buy stock in competitor companies and individuals buy stock in diversified companies and mutual funds, what evolves is virtual monopoly where competition is often simulated and there are no more real “price wars.” Chains like Walmart, Home Depot, or Lowe’s are so powerful that they regulate wholesale costs as well as retail prices and worker wages. Investment is increasingly in advertisements to increase the perceived value of products rather than research and development or real innovation to make the product more efficient or longer-lasting.2 Instead, products are made to last until the warranty runs out at which time repair parts are no longer available and, in the case of software products, upgrades are discontinued. To further encourage customers toward planned obsolescence, interfaces are regularly changed to make keeping older hardware and software more difficult.
In the case of printers, cell phones, and alarm systems, pricing and support are rigged so that the initial investment is minimal but the ongoing outlay is unrealistically and unnecessarily high. All this is done to hoodwink buyers into spending more than intended, in hiding actual costs by deferred billing and expensive support. To add to this, there are the ubiquitous offers for free miles, cash back, savings coupons, and other incentives to excessive spending and short-term thinking.
In today’s virtual monopoly economy, neither the customer nor the employee has much real choice. If one needs eyeglasses, he chooses between a bunch of companies all owned by the same parent company. A Maytag appliance is no longer made by Maytag and is no longer a paragon of reliability. Now, the brand itself is the attraction that, because of unceasing advertisements, has customers treating brands like sports teams and wearing advertisements proudly.
I recently tried to get a nice pair of dress socks without advertising on them and was unsuccessful!! The store was filled with brand names and logos permanently applied to almost everything!!
What I’m getting at is that the consumer is being brainwashed and hoodwinked. The entrepreneur, whether large or small, has little choice but to go along with it. And the employee no longer has a free market into which to offer his services to the highest bidder. The leveling of wages by conforming to the those of the industry is now openly practiced and widely recognized.
If you compare our non-utility cell phone and internet services with the public utility or government-provided services of other countries, the better and more affordable services are not in the US, even though we invented the technology.
The same is true in the health care industry, where, in the few years between Bill Clinton and Donald Trump, a tiny healthcare insurance industry grew from a small segment of the economy and a minor political influence into a gigantic profit monster that sits between employee, employer, government, hospital, doctor, patient, and the pharmaceutical industry and grabs huge profits for itself and thereby has become the biggest and most effective lobbying constituency, dwarfing and overpowering the once-powerful American Medical Association – all the while making money while providing massive, expensive bureaucracies with insatiable appetites for more profits.
I believe in the nation’s right to protect citizens within its borders and enforce fair treatment for everyone, even criminals; to keeping the air safe to breathe and the water safe to drink and the food safe to eat and the drugs regulated and approved; to protecting individual rights against abuses by anyone – even a majority faction; and to keep us from being misled by unscrupulous advertising. I think it is in the collective interest for us to have good and affordable schooling for all who qualify and apply themselves. I think it is in the collective interest to help the disadvantaged get to a place of dignity and self-sufficiency. And I think that cooperation, rather than competition, is the route to a sane, workable, and more peaceful world.
We’ve tried competition – ad nauseum – and it’s had some remarkable successes and some horrible failures. To increase Haliburton’s profits, we started a war with Iraq. Most of us took the bait and are still on the hook for the horrible consequences: service people broken physically and/or mentally; an enormous upsurge in Mideast violence and suicide terrorism (what we were ostensibly trying to stop but strongly encouraged); ongoing worldwide political and economic instability; and the ever-increasing cost of government dealing with it, whether they tax us or just increase the national debt.
And, what’s most ridiculous of all, if we happened to “win” in Baghdad or Kabul, that would be just the start of our tax flowing into an already bloated military budget because, as we’ve seen in Germany, Japan, and South Korea, victory means a more-or-less permanent contingent of tens of thousands in the defeated country.
While the argument is that labor has accepted the wages offered and so agrees to the status quo, I submit that the current monopolistic environment gives all the advantages to owners and company representatives who control elections and most government, fix wages and prices and make “free markets” a farce.
We need balance!! Ownership rights and privileges should be balanced by an obligation to workers and consumers. The power of money to buy elections is an obscenity and a clear, obvious exception to the pluralistic platitudes this country loudly proclaimed in such notorious documents as the Declaration of Independence, The Bill of Rights, and the Gettysburg Address.
Money has created a large and growing gap between the “haves” and the “have nots” which isn’t anywhere as often caused by sloth or ignorance as many promoters of pure capitalism would have us believe. As intelligent machines take over more and more jobs, the relatively small group of “haves” won’t actually control things. Instead, the managerial class, with unlimited political influence and almost total control of the media will erode the already waning confidence in the collective to effect meaningful change. And the short-term greed of the system itself will gradually devolve into a system not unlike the “Hunger Games” of fiction.
This, I believe, will be lose-lose, where the wealthy are locked out of control of the diversified stock in companies they collectively own and CEOs and CFOs will have no choice but to continue the current practices of maximizing short-term profit with no regard, whatsoever, to other factors, including diminishing buying power, planned obsolescence, monopolies and virtual monopolies, diminishing quality of life for everyone, and the devaluation of all labor in favor of absolute and permanent rights of ownership.
“Americans” who respect the rights of people in other countries are few and far between. We don’t think of the rights of North Koreans to food and free commerce. We completely disregarded the rights of the Afghan and Iraqi people when we invaded their countries on spurious charges and with righteous indignation. We killed two or three million Vietnamese in their own country and often on their own farms in a misguided effort to stop Communism and “restore democracy,” all the while ignoring the will of the majority of the local people as well as the facts! We have, in our systemic greed, been misled time after time into committing atrocities that serve neither us nor them in the long run.
We need to find a way to have mutual respect between the poor, the obscenely wealthy, and the shrinking group of us in between. We need to think more long term. We need to think of what’s best for the entire world, not just our immediate family or our immediate neighborhood, or just our own district, state or nation.
We need to think of what will work for all in the long-term future. I am convinced with all of my being that corporate capitalism will not lead us to a safe, sane, cooperative future. Like most of our past, we seem locked in the win-lose paradigm which almost always gives us lose-lose in the long run.
Mankind is a cooperative species by nature. What got us here – and what makes us truly happy – is cooperation and kindness. Power, fame and fortune may give us lots of pleasure, but it won’t bring us much happiness in the long run. Happiness comes from cooperation and sharing our successes – and our failures — with others.
This obscure but meaningful difference is what separates the grossly wealthy from the rest of us and it isn’t healthy for either side. Ayn Rand and her followers have developed a new anti-religion that is just as dogmatic and absolute as the religions it disparages. The law isn’t a fair and equitable arbiter of what’s right and wrong and never has been. In its deeper and darker corners, it solidifies the stranglehold of the powerful against their neighbors and, in turn, creates and then exacerbates adversarial relationships.
Courts aren’t actually designed to find the truth but to force and enforce an adversarial environment where win-lose is a required outcome. Family law ensures a horrible outcome when there isn’t mediation. It takes even an amicable divorce and makes it about money, power, and control. And the power of money in our legal system grossly imbalances the scales of justice, both in the courts themselves and in the legislation that drives those courts.
So I see a widening gap between justice and law, between truth and news, between reality and perception, and between what should be cooperating segments within our worldwide society. I see wealthy and powerful countries going mad with power, developing Apocalyptic weaponry and holding the rest of the world hostage with it. When others fight back, we are blind to our own bigotry, selfishness, and myopia and see only win-lose options. To us, it is dominate or be dominated; fight or lose; compete or lose. When we were shown a different way, a cooperative, less competitive way by Jimmy Carter and Bernie Sanders, the nation rejected win-win and reverted back to “Make America Great Again,” which means domination, war, threats, and unbridled competition.
It has been more than seventy years since the last of America’s bullying was even marginally successful. Even in tiny countries like Korea, Vietnam, Afghanistan, and Iraq, it hasn’t worked and isn’t working. This new reality is because the world isn’t isolated any more. The “divide and conquer” that worked for centuries no longer works!
I’d also like to point out that, even though we “won” the Second World War and fought the Korean War to a standstill, the average US taxpayer has been supporting massive occupation armies in Germany, Japan, and South Korea ever since. Yes. By “winning,” by “being great,” we maintain 48,000 troops in Germany and 51,000 troops in Japan and keep 28,000 highly-trained soldiers in South Korea, each day prepared and waiting on a hair trigger for a destructive and horribly lose-lose outcome. There is absolutely no way the modern city of Seoul would last the first 24 hours and there is growing evidence that Honolulu and maybe even San Francisco and Los Angeles would be radioactive slag by then. Yet we continue the madness of threat and counter-threat.
So, whether or not our troops win or lose in these foreign wars, we, the taxpayers, the foot soldiers, the workers supporting this insanity ALWAYS lose financially, physically, and in rights and privileges to our wealthy power-brokers and their wealth money managers! The game is rigged!!
Rather than befriend the poor people of North Korea, we are shunning them because they have a leader we disapprove of. This is against everyone’s long-term best interests. We’ve surrounded them with nuclear missiles in submarines and on massive fleets 200 miles offshore. We have more nukes waiting to send to the people of North Korea in Japan and in silos within our own country. It didn’t work to cow Kim Jong-un, but we can conceive of no other strategy to win the hearts and minds of the people of North Korea than to bully them. It didn’t work in Vietnam (for us, for the French, for the Japanese, or for the Chinese Communists). It didn’t work in Iraq. It didn’t work in Afghanistan (for either us or the Soviets). But we have no other paradigm in our collective consciousness.
Rather than let international justice run its course, we unilaterally invaded Iraq and Afghanistan, destabilizing the entire region and incurring massive and ongoing national security problems. Again, all we have is the win-lose paradigm, the idea remains us-or-them winning and the other losing.
The kindness, the humility, the equality, the justice necessary to effect long-term reconciliation is missing from our arsenal of tactics, totally unacceptable to the American mindset.
In the simple paradigms of the past, ownership involved responsibilities. If someone had an accident on your property or with something you sold them, you had obligations and responsibilities. Incorporation changed most of that. It separated owners and what they owned. It also created new economic/political entities that, in a number of areas, had greater rights than ordinary people while being able to manipulate and minimize liability and eliminate all humanitarian constraints.
These entities, in turn, have gradually grouped together into vast political, economic and social networks with vast resources and power. They, for the most part, underwrite the politicians that make our laws and then craft the legislation that is sponsored by the legislator that they picked and backed. Even national legislators and most certainly state and local legislators don’t have the time or resources to write their own bills. So PACs write the bills for them. And, while some of the pork and biased clauses gets weeded out in committee, these bills are what become the laws of our country, our states, and our cities.
So what’s legal is what is good for ownership, what promotes more wealth and power; not necessarily what is in the general public interest or even in the interests of the wealthy and powerful.
The “balanced scales of justice” are not reliable and never have been.
We no longer have free and fair elections. The massive thumb of organized wealth has pushed down on one side for many years now and, in recent times, has unleashed an unprecedented barrage of misinformation at the average voter on our streets, on our televisions, on the internet, and in mail and e-mail.
I’m not saying that wealth is wrong. I’m not saying that all politicians are bought – but many, probably most, are. I’m saying that our society is way out of balance with each other and the rest of the world. The recent remarks by Roy Disney’s daughter exemplify this split between money managers and the rest of our society, including owners and heirs.
When we deny the rights of North Korean, Afghani, Iraqi or Vietnamese people to defend their neighborhoods against foreign invasion, something has seriously unbalanced our sense of justice.
When we claim the right to Weapons of Mass Destruction and spread them over all the oceans and most of the continents of the world but deny that right to others, we’ve lost any semblance of balance or equality or justice or even sanity. Our unilateral insistence on the right to keep and sell (or give away to sociopathic minorities in the Third World) anti-personnel land mines is another indication that our minds are seriously unhinged and Americans are indiscriminately destructive and unreliable.
When we construct a United Nations that has unequal powers for different nations, an unequal democracy, and an unworkable world government, we are again showing our grandiosity, our selfishness, our unwillingness to trust or respect other nations. And, when we band together with fellow aggressor nations into NATO, we’ve created something that has regularly used its power to bully and coerce other world factions. It may have created peace for us, but it ensures (through ongoing colonial practices and divisive decisions and tactics) ongoing war through its ongoing intrusion into nonmember societies3.
I am embarrassed to be a citizen of the United States. I consider my country and my fellow citizens to be international bullies and terrorists. Certainly we create terror in the Third World and have been doing so for many years. When a few independent terrorists from several Mideast countries including Saudi Arabia and Egypt leveled two buildings, did slight damage to another, and killed 3,000 people on 9/11/01, our country invaded Iraq unilaterally, killed massive numbers of people in their own homes and businesses, occupied and brutalized the entire country, and created over a million homeless Iraqis in the surrounding countries and Europe – on trumped-up false charges!
Which created more terror? Which created more instability in the world?
And who is behind the thinking, behind the politics, behind the curtain? Organized corporate capitalists! Profit monsters are driving everything, including the thinking of the average citizen.
So when I’m told that unbridled corporate capitalism is the solution to our problems, forgive me if I’m skeptical!
©David N. Dodson, June, 2018, Phoenix, AZ
1Currently, the US is starving the Korean people (and NOT Kim Jong-un) because the North Korean leadership won’t bow down to our concept of “justice:” one set of rules for them and a completely different set of rules for us.
2I won’t replace my roof air conditioner because its replacement will be designed to fail while the current unit was designed to last. The practice of planned obsolescence has become almost ubiquitous. It makes money, but it isn’t efficient or effective. Furthermore, tax laws involving depreciation support and encourage planned obsolescence.
3Kuwait, Bahrain, and Palestine come to mind: colonial entities used to destabilize the Middle East (our “ally” in WWI) and promote ongoing, almost perpetual antagonisms and warfare throughout the region.
Dave's World 