Sunday, July 25, 2004

Capitalism, Exploitation, and Over-Consumption

The ideals of Capitalism and the Free Market have long been ingrained in all of us, but the end results we have witnessed are far from ideal. It is true that of all the sociopolitical systems devised by mankind, the combination of democracy and the Free Market have resulted in the most productive and fair results; however there are many flaws in the system that prevent us from becoming a truly fair society. The Free Market system was designed at a time before the technological advancements of our society have changed the entire fabric of our society.

First, I would like to outline some of the flaws in our current society that would not be present in a truly fair society:

#1. Shrinking Middle Class– The gap between the rich and the poor in our nation continues to widen, and the vast majority of wealth is controlled by a disproportionately small segment of our society. In 1992, the middle fifth of all households accounted for 15.8% of the nation’s income. The same segment had fallen to 14.8% by 2002. During the same period, the wealthiest fifth of all households saw their share of the nation’s income rise from 46.9% to 49.7%. (USA Today, 07/23/2004) The top 20% of the nation’s population controls almost half of the nation’s wealth. If left unchecked, this trend will continue, and a small percentage of the nation’s population will control almost all wealth in our nation, while the vast majority of the country will struggle with day-to-day living.

Can the work of one person truly be worth $43 Billion Dollars ($43,000,000,000.00)? Compare that to the average American salary in 2002 of $36,764. If you assume the average worker will work for 35 years, Bill Gates could pay the lifetime salaries of 33,417 people with his current accumulation of wealth. How can this be considered equitable? According to Bloomberg, CEOs in the United States are paid an average of $12 Million dollars per year.

We are increasingly facing the risk of developing into a 2-class society. The rich class, consisting of CEOs and stockholders, and those that are financially well off, continue to develop an increasingly large stake in the control of our nation.

#2. Increasing control by Corporations - When capitalism was first designed, it was implemented as a means to an ends—to motivate each individual of society to act in a way that would be productive to society as a whole. The mantra of the American Dream could be summed up as “Find a need in society, and fill it”. We need to recognize that the motivational factors decided upon during the birth of capitalism no longer apply. I don’t believe this age of multinational corporations, fueled by government tax breaks and exploitation of third world countries, could ever have been imagined. Corporations continue to ask American workers to work longer hours for smaller pay, all in a bid to help the companies increase their profit margins, and stay competitive in the world economy. According to a recent article on NPR, working hours in the United States have increased by 20% in the last thirty years, while declining by the same amount in Germany. Now feeling increased pressure in the new world economy, companies in Germany have begun asking workers to work longer hours, and give up other perks as well, including 5 minute breaks every hour. The Germans had it right in the first place, yet they are forced to follow the lead of US Corporations. This will only result in increased profits for the corporations, while stretching the average worker to work longer and longer hours.

Can you not see that corporations are now controlling and exploiting the world? In every other socio-political system in mankind’s history, the root cause of failure was that a small percentage of the society was in control of the major decisions affecting day-to-day life. The combination of democracy and the free market was designed to have checks and balances that prevented this from happening. In this age of corporate tax cuts, government financing, global exploitation, large-scale corporate mergers and layoffs, deregulation, and campaign contributions, we no longer have those checks and balances in place. CEOs and corporations have become the elite class of our society, able to pay of the United States government and exploit the workforce without breaking stride.

It has becoming increasingly improbable that the average person in the United States can become a successful entrepreneur. If we continue to accept the status-quo, upward mobility will one day become a virtual impossibility. Outsourcing/offshoring by American companies is a process that is driving out high paying jobs from this economy, which are replaced by McJobs, all while increasing the profit margins of the corporate America.

#3. Environmental Exploitation/Over-Production- There are no more needs in our society, yet corporations have convinced Americans to continually desire and upgrade the newest, greatest fads, while disposing of perfectly good products that are no longer in style. We produce more food, housing, and other goods than we need, yet we continue to feel pressure to work hard to keep our jobs, all in the name of profitability. We have turned into a disposable nation, where it is cheaper to buy a new printer or monitor, than it is to have it repaired. One only needs to watch the recent documentary, Super Size Me, to recognize that we have become an over-indulgent nation. We continue to consume vast quantities of our natural resources, with literal regard for environmental concerns. Here is but a small sample of the issues we face:

-Ozone Layer Depletion
-Greenhouse Effect
-Over-harvesting of fish
-Overflowing landfill sites
-Toxic waste dumping
-nuclear waste sites
-Over-consumption of non-renewable resources

In the capitalist system, there are no checks in place to ensure that corporations function in an environmentally responsible manner. Each individual and company is motivated to keep up with the mechanisms of the giant profit-driven corporate machine. The United States is currently waging war, all in the name of keeping prices of gas and oil as low as possible (Even as they refuse to publicly say so) The fact is, the Bush campaign has lied through their teeth, and have failed to come up with a single plausible explanation for the war. One multinational company, Halliburton, is going to profit more from the Iraqi war than any other. This company, formerly headed by vice president Dick Cheney, was awarded hundreds of millions of dollars in no-bid contracts by the United States government. In 1999-2000, Halliburton gave $709,320 in political contributions, of which 95% went to the Republicans. At the same time, Halliburton’s Subsidiary, kellog Brown and Root (KBR), is under now under scrutiny for illegally operating in Iran, and wasting tremendous amounts of money. Corporate America is in bed with the United States government, and for these reasons, the government cannot be relied upon to hold these companies accountable.

#4. Failure to Provide Quality of Life for all – Despite the fact that our nation is rapidly depleting the natural resources of the world, and producing more than our country is able to consume, we have failed to provide for a large percentage of the United States population. According to US Census data from 2002, there were 43.6 million uninsured people in the United States. At 15.2% of the entire population of the United States, this represents a large portion of the country that will either have difficultly paying for their health care costs, or will not be able to receive the medical attention they require. To help you put this into perspective, a recent feature on NPR, this amounts to the entire combined population of the following 24 States:

Oklahoma, Connecticut, Iowa, Mississippi, Kansas, Arkansas, Utah, Nevada, New Mexico, Oregon, West Virginia, Nebraska, Idaho, Maine, New Hampshire, Hawaii, Rhode Island, Montana, Delaware, North Dakota, South Dakota, Alaska, Vermont, and Wyoming.

There are an estimated 700,000 homeless people per night, or 2 million per year in the United States. 31 million Americans now live in hunger, or on the edge of hunger.

What can we do?

The first step is awareness of the issues involved. We must learn not to accept the status-quo. In a future blog, I will explore some of the ideas I have for change, along with other interesting ideas that I have discovered. There are many other sociopolitical issues that I plan on exploring in future blogs. These issues include the state of health care; ideas for improving democracy using technology; technocracy; software patenting; along with offshoring and outsourcing in the software industry.