Whenever I see a little image like this, with very relevant and insane statistics that we should all be worried about and do something about it, I do shudder when I get to the great conclusion at the end of the flyer, with great big bold lettering claiming that “CAPITALISM DOESN’T WORK”. Ok, so one of the first rules I learned in academia is: define your terms. Just because I call someone an asshole every time I see them, does not make them an asshole, which is why just because everyone calls our system capitalism, does not make it capitalism.
Our current system is not capitalism as it was conceptualized. In an actual capitalist system there are consequences for actions. If you gamble and risk and it turns out you were misbehaving, you fail, and if you go bankrupt your assets are liquidated. On the other hand, if you are responsible and foster growth and don’t engage in destructively risky behaviour, you get to grow and assimilate chunks of other firms that have gone bankrupt. This way we ensure that those that do things well and by the book are rewarded and those habits and that culture persists. The risky, overly leveraged, irresponsible firms, go away, and so do their practices.
What we have seen in the last decades is a complete socialization of the market by guaranteeing lenders of last resort keep firms afloat, even if they should be allowed to sink. By keeping these institutions up and running, it prevents some unwanted economic rattling for a little while, as opposed to the long-term damage these firms and their behaviour do to the health of a country. This moral hazard of bailing out failing financial firms took away all accountability from their actions. Not a single CEO has seen his day in court for destroying depositors assets and forcing an entire nation to kowtow and write out a blank check to them.
When you have the ever greater consolidation of the largest companies, aka the merger between Time Warner and Comcast, you no longer have a free market, you have a monopoly, set up by crony deals and pure insidious corruption, which will do nothing to better the service brought to its customers. Why? Because there is 0 competition. Therefore it is not a free telecom market. You have a couple of incumbents which control their share of the market and they don’t interfere into each others businesses because it is more profitable this way and the pile of cash is growing disgustingly well. Might as well have the 4 or 5 just merge and get it over and done with, that’s how the trend follows.
Then we have the Citizens United case in the Supreme Court and the news this week that there would no longer be a cap on single campaign donation limits. One of the Justices argued that this would go far to limit corruption and bring more transparency to the electoral process. Sure, if you want to justify two corrupt decisions in a completely myopic reading of the Constitution, yeah, you could call the unlimited financing by any one individual or corporation (which is also an individual), a measure to curb corruption. Are you kidding me? Well, since it’s open season for corporations and the mega-rich to pick and choose their boys and girls in congress, then I think two things are in order:
1st: Redefine the United States for what it is. Yes it does have a democratic spirit, but functions in effect as a Plutocracy (Rule of the Rich). If you prefer Oligarchy you can also call it that.
2nd: Redefine the economic system as two-tiered. Socialism for the Rich, free-market for the rest. If you have a multi-billion dollar financial firm which behaves like a crack-head in a glass store, which breaks all the glass and then the government comes in and pays for you to not go bankrupt, that’s socialism. No ifs buts or maybes. If you’re a regular Joe and you can’t make your mortgage payments because your crops have been poisoned by nearby fracking operations, you lose your home, your business and your property is repossessed. You’re not getting any help from Uncle Sam, you’re just the right size to fail.
So what did we get from all of this? There isn’t Capitalism, there is Cronyism. There isn’t Democracy, there is Plutocracy. It is not a free-market because the rich get bailed out with everyone else’s money, and the rest get shafted.
And I’m talking about the United States because it’s the most extreme example, but I’m looking at you too “rest of the world”. So yeah, get your terms right.