Wednesday, January 15, 2014

Capitalism I

The presumption in most of the developed world and in the emerging markets since the fall of communism is that the only viable model for the organization of humanity is a combination of democracy with capitalism. The democratic aspect satisfies a deep human need for fairness and control over one's environment, but the capitalistic aspect is less fundamental and is largely predicated on the realistic observation that the world is becoming increasingly competitive in economic terms, and that countries with weak economies will sooner or later succumb to those countries that have greater economic power.  The history of the world over the last 300 or so years can be summed up as the domination and exploitation of technologically and economically weak countries or regions by better-organized, more competitive, technologically advanced countries with greater economic resources.  In a surprisingly short period of time, China and Russia have come to resemble the U.S. and Western Europe in their national outlooks.  The question that I would like to address briefly on this post is whether this trajectory is sustainable.

Although the endorsement of democratic principles is almost irresistible, one must determine whether in fact it is possible to construct a democratic society that is capable of lasting not hundreds but thousands or millions of years.  If you look at the history of the U.S., which has existed for less than 250 years, there is little cause for optimism.  The basic legal structure may have remained somewhat intact, but other than that almost everything has changed, arguably for the worse.  This is no longer an agrarian society composed of farmers, small manufacturers and merchants, but a post-industrial society in which corporations dominate everyday life, the population is more than 100 times larger, the planet has become seriously polluted, and the weapons used in military conflicts have become unimaginably deadly.  While the knowledge exists to create a sustainable population level in which the standard of living is relatively high for all, the current trajectory does not seem to be in that direction.

This is such a complex subject that I can only touch on a few of its aspects here.  The U.S. model requires everyone to gain employment of one kind or another even when many jobs contribute almost nothing of value to society and there would be no difference if those jobs didn't exist, except that some people would have no income. Corporations, which have mistakenly been identified as people in one of the most absurd Supreme Court decisions ever, have no incentive to contribute anything to society, as they are specifically designed to enrich their owners and managers under the greatest legal protections available.  In theory, if resources and human habitats were infinite, this model could work indefinitely as long as old and new businesses could generate sustained economic growth.  However, that is not the case, and we are seeing a migration of wealth to a minority while the majority is increasingly subject to long-term trends of corporate downsizing and the disappearance of low-skill jobs.

The current answer offered by conservative thinkers and economists, and, puzzlingly, by many so-called liberals, is that sustained growth is possible; if you minimize government interference with businesses everyone will benefit in the end as long as workers get the right training.  This is an astonishingly shortsighted and self-serving way to look at the problem.  To be sure, the standard of living in the U.S. is good by historical standards, if you don't compare it to parts of Western Europe, but most people here work longer hours than they used to and don't like their jobs. Not liking your job is actually a major quality-of-life issue that corporations and economists habitually ignore. Furthermore, the claim that people just need to upgrade their skills is at best unrealistic and at worst disingenuous. That laid-off assembly line worker in Michigan just needs to get off his butt and earn a Ph.D. in computer science!

The other part of the formula, democracy, or, for the picky, the process in place meant to approximate democracy, is just as problematic as capitalism.  The fact that the two-party system behaves more like a one-party system is just a manifestation of it.  Deep underlying problems are associated with the process by which  politicians get elected.  A politician only needs advertising money, some basic credentials and preferably a likable personality. He or she can comfortably enact laws that will prove to be complete failures years after they've left office.  If they get things done for their corporate sponsors they can look forward to cushy jobs when they leave office. Moreover, the voting public is supposed to sort through all this before voting without understanding many of the technical issues at all or being aware of the hidden agendas of their candidates.

I'll use Barack Obama as an example.  Here is a likable, well-educated fellow who gave at least one good speech, and voting for him was a no-brainer for me when the main alternative was John McCain.  In hindsight, I consider my vote for him in 2008 a mistake.  He did not have the right background for the financial crisis, was not able to gain credibility as a leader, reneged on closing Guantanamo Bay, ramped up the drone program and extended the Bush tax cuts.  One of the few things he deserves credit for is the Affordable Care Act, which may have been passed under any Democratic president and in any case leaves a lot to be desired after all the compromises.  A broad area that concerns me as a citizen is his apparent acceptance of distorted views about terrorism.  The dangers of terrorism are real, but, in my opinion, far less than sufficient to justify two major wars.  Obama seems to have bought into the fantasy created by the military-industrial complex and corporate-owned media, all of which have profited immensely from the wars. Obama did set a withdrawal date for Afghanistan, but if he had been courageous he would have stared down the military and told them that both wars, especially Iraq, were unnecessary, and advocated immediate withdrawal.  One need only look at Iraq now to see the absurdity of the warnings about the dangers of premature departure.  Even with a carefully planned departure from Iraq, the results have been catastrophic, and I expect the same in Afghanistan.

Where does this leave us?  There is always a very slim chance that the existing political and economic system can adjust over time to accommodate human needs while reducing conflict, creating greater equality and preserving the environment, but I believe the very design of this system is incompatible with these goals.  It promotes competition where none is necessary and is based on obsolete conceptions of human progress. The freedoms bestowed in the name of democracy have little meaning when nearly everyone is subject to economic forces that the elected government is barely able to control now, with its grip slipping.  Call me utopian, but I would like to see a system in which government is an agreed-upon set of algorithms, there are no elected officials, and corporations do not exist.

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