Sunday, January 31, 2010

Capitalist and Socialist Elements of a Competitive Market System

Certainly many who are accustomed to hearing media pundits and politicians pit capitalism against socialism will be reticent to acknowledge that elements of both economic systems have been at play in our competitive market system for most of the time that we have been a nation. This fact is neither readily acknowledged nor publicized simply because our “free press” is predominately owned by corporate moguls who fund our political campaigns - a circumstance solidified by the January 21, 2010 U.S. Supreme Court Decision, Citizens United v. Federal Election Commission. This decision allows for even more corporate spending to insure the election of “corporate candidates” who will undoubtedly continue to allow unfettered corporate acquisition of media outlets. Thus - since you are unlikely to get the truth about anything from mainstream media - you “better recognize” and seek out and subscribe to blogs like mine.

Let me first of all acknowledge that I am neither a capitalist nor a socialist. I am an “inclusion-ist” - a hybrid form of the two. Additionally, I submit that both the American and Chinese competitive market systems are also hybrid, “inclusion-ist” systems. The only difference is that China’s economic system is basically socialist with capitalist elements and ours is basically capitalist with socialist elements. The mixture of capitalist and socialist elements in a competitive market society springs from the knowledge that both are incomplete, standing alone, to provide for the common welfare of an entire citizenry. America realized this long ago and China has come to the realization in the past few decades or so. So the REAL argument has never been one of capitalism versus socialism. The REAL issue has always been, “what is the proper mix of the two”.

Pure socialism - wherein government owns the means of production and each citizen is provided for equally, regardless of input or effort - promotes laziness. If  a plumber received the same wage as a chauffeur, why would anyone go through the arduous training to be a plumber? Therefore some type of incentive-based economic system is necessary for increased worker productivity and a subsequent robust economy. Once China recognized this, its economy flourished because of the installation of capitalist elements.

Conversely pure capitalism - wherein the means of production is privately owned and those with access to capital are allowed to increase their monetary coffers via the “sweat equity” of workers - is a system of pimping. The entrepreneur/pimp receives all of the money earned from the efforts of the worker/whore and then pays said worker/whore whatever pittance he deems necessary to keep the worker/whore in his company/brothel. America recognized this and our economy flourished because of the installation of socialist elements - coupled with the use of slave labor that provided a serious economic boost. [But we’ll save that hot-button topic for a later discussion]

Yes I know that many of you believe workers have autonomy in a purely capitalist system, but do they really? Do workers in such a system truly decide the wage they will work for or do entrepreneurs/pimps tell them what the job pays - leaving them the mere option of seeking a “kinder, gentler” pimp who pays more? But that’s enough of the pimping analogies - for now. The preceding should suffice to illuminate the ills of a purely capitalist economy.

But the saving grace of America’s competitive market system is that - though heavily capitalist - it has historically been buttressed by socialist elements. Minimum wage legislation, public utility rate regulation, Medicaid, Medicare, farmers’ subsidies, federal disaster aid, SBA (Small Business Administration) loans, federal deposit insurance laws, Social Security, public defender attorneys, anti-trust laws governing trade restraint, and workman’s compensation and other labor laws, are all socialist elements - social welfare programs - that both provide for the common welfare and insure a competitive marketplace for workers, consumers, and small businessmen.

By now the astute among you have probably noticed that I keep referring to the American economy as a “competitive market” system rather than a “free market” or “free enterprise” system - like most of the media pundits you are accustomed to listening to. There is good reason for that. Zeroing in on the notions of a “free market” or “free enterprise” system allows the conversation to be skewed toward the capitalist aspect of a competitive market and the subsequent demonizing of any socialist aspects.

To illustrate this phenomenon - and its insidiousness - I will have to briefly take you into an Economics class. I learned about the elasticity of demand and the inverse relationship of supply and demand in undergrad. SOME if this is relayed by the “experts” to you - the listening audience. Typically they pontificate about the effects of supply and demand on price - gas prices for example. They tell you that as demand increases, supply decreases, and thus, price increases. They remind you that when demand decreases, supply increases, and thus, price decreases. But, what they seldom speak much about is the effect of competition on price. This factor in the marketplace - competition - is the reason for anti-trust regulation that help to insure a competitive marketplace.

These regulations don’t exist merely to stop one company or cartel from becoming “too rich”. They insure that consumers receive fair prices for the goods that they buy. Without anti-trust regulation one company or group of companies that “corner the market” could charge whatever they chose for necessities, regardless of the supply/demand variable. If there were no competition, only luxury goods would fall under the auspices of “whatever the market will bear” - while the price of necessities like food, water, gas, utilities, medications, health care, etc. would be determined solely by sellers. Consumers would have no choice but to pay the rising prices because they NEED these goods.

Okay, now that I have summarized Econ 101 into two paragraphs, let’s examine the motivation of politicians and pundits who you’ve heard summarily debase government intervention in the marketplace  - and more recently, health care reform - by uttering the “McCarthyism” that “the American people don’t want Socialism” (the perennial “Red scare”). Obviously, these learned individuals don’t promote the “Red scare” because they are oblivious to the socialist elements historically attenuate to our competitive market system. So what could be the reason? Why would intelligent men and women - who know that the socialist elements in our economy foster competition and provide for the common welfare - render such elements to scorn and call them “anti-American”? What is their agenda?

The agenda of these pundits and corporate-owned politicians is to drastically skew the American economic landscape toward a purely capitalist system wherein big business - their true bosses - can be the corporate pimps they long to be. Sustained government intervention in business affairs hinder this goal. This is why they use words like “free market economy” and “free enterprise system” instead of “competitive market system” to describe the American economy. I’ll use Friday’s segment of MSNBC’s Hardball with Chris Matthews to illustrate this point.

Friday on Hardball, Chris Matthews was discussing President Obama’s appearance at the House Republican retreat. At one point Matthews mentioned the President’s acknowledgment of Frank Luntz in the audience. Matthews stated that Luntz is a Republican political consultant who’s specialty is to find “what words to use to score points”. Not knowing who this man is, I Googled him. This led me to Wikipedia and then to a December 15, 2003 Frontline interview in which Frank Luntz was described as “a corporate consultant, pollster and political consultant to Republicans” whose “specialty is testing language and finding words that will help his clients sell their product or turn public opinion on an issue or a candidate.” Now the point here is not to pick on Republicans. Assuredly, Democrats have their own pollsters/consultants that perform the same functions for them. The point is to illustrate the fact that politicians, in general, manipulate the public through word usage.

You see the word “free” is widely used by pundits and politicians to describe the American economy because everybody loves freedom. We Americans revere our freedoms of speech, association, religion, press, etc. Hell everyone wants to be free! We want to be free to live, love, earn, pursue happiness and just BE! Former President-select “Dubya” Bush [Yeah. I admit that I have no respect for the man. Like attorney Vincent Bugliosi, I feel that he should be tried for murder. …and as Mark twain said, “Patriotism is supporting your country all the time, and your government when it deserves it.”], when driving America to a frenzied peak as a prelude to invade Iraq and later to maintain public opinion for continued occupation, repeatedly stated that “they hate our freedoms.”

So instead of acknowledging corporate desire to be free to pimp American workers, they link their desire to that of the small businessman to be free to compete against big business. Instead of acknowledging HMO’s desire to be free to deny medical care, they link it to the patient’s desire to be free to choose a doctor. Instead of acknowledging that they seek tax cuts for the wealthy, they link these tax cuts to middle American tax cuts - disingenuously saying they should be “across the board”, as if the government could function properly with so much less money. And yeah, they talk of government waste while inserting their own waste into every bill passed into law. It’s all subterfuge. And the American public eats it all up.

To clearly understand why socialist elements are necessary in a competitive market system, I feel that the “Monopoly” game by Parker Brothers is quite illustrative. You know the game where every player starts out with $1,500 from “the bank”, goes around the board buying properties and building upon them. You land some places and give money and in others, you receive money. You play until one player bankrupts the others, giving him/her a monopoly. Only the winner has money and property and the others have nothing. The fun part is that everyone starts out on an equal footing and all have an equal chance to win. Luck and strategy rule the day and, if you don’t win today you can always try your luck - and strategy - tomorrow.

But the fun of Monopoly is knowing that the next time you play everyone starts at the same place all over again. Everyone starts with another $1,500 from the bank and no property. Everyone has a chance to win. But suppose the winner from the previous day was allowed to keep his/her properties, buildings and money while the others were simply given their $1,500. The previous day’s winner might have $40,000 and hotels on all properties. With no property to buy - and gain income from - the other players would be merely going through the motions for a very short stint, waiting to crown the same person champion. Would you even want to play Monopoly under those conditions? Is there any wonder why so many American citizens simply quit the “game” of pursuing financial security when faced with parallel circumstances?

Of course it isn’t prudent for the American government to periodically take everyone’s assets and redistribute them equally. That would be pure socialism as opposed to socialist elements in an “inclusion-ist” system. One way America used to solve this problem was through the imposition of an estate tax - and an especially high one for the very rich among us. I recall one of my college professors in 1980 relating that this estate tax was a way of evening the playing field. I thought that was a cool idea. The next year President Ronald Reagan lowered the estate tax considerably - especially on the very rich and it has been a downhill ride every since. Because less estate taxes on the rich had to be made up from somewhere, the poor just got poorer.

And even more insidious is the fact that pollsters/consultants, i.e., “wordsmiths” have succeeded over the years to change the conversation from “estate tax” to the hated term “death tax”. From there, all they have had to do is prompt the American public at rallies asking, “Do you think it’s fair that the government wants to tax you for dying?” And they get a resounding “No!” And once again they have linked the desire of the rich to avoid estate taxes designed to insure every American a fair chance directly to the plight of the average American citizen. But the wealthy are well aware that the average American citizen has no true sympathy for their economic woes. Therefore they hire wordsmiths that skillfully link their causes with those of average Americans.

Case-in-point, at that same Republican retreat on Friday Rep. Mike Pence (Ind.) asked the President, “would you be wiling to consider embracing, in the name of little David Carter, Jr. (another pawn whose letter he read) and his dad, in the name of every struggling family (as if he cares) in the country, the kind of across the board tax relief that Republicans have advocated that President Kennedy advocated, that President Reagan advocated, and that has always been the means of stimulating broad-based economic growth.” Again, the wordsmiths have advised that “across the board” is the terminology to use.

Understand that in the year that President Obama has been in office Americans at the lower end of the economic scale have already received some tax relief - but those at the higher end have not. The economic recession necessitated that the bottom rung get help. But the rich still want their relief - even though they are the cause of the recession, even though their monopolistic greed resulted in organizations deemed “too big to fail”, even though some received TARP funding via their businesses and were still able to receive hefty bonuses. Understand what this recession is really about. The pie didn’t shrink! If it had, the bonuses wouldn’t be possible. The only reason folk like you and me are suffering through this thing is because a greedy few took MUCH LARGER PIECES OF THE PIE! And they still want more!

The argument for trickle-down economics is that we must appease the pimping beast or he will take his business overseas - and he will if government doesn’t apply stringent impediments. And government should apply those restraints because allowing the pimping beast to pimp overseas is a threat to national security in more ways that one. You see, contrary to the rose-colored glasses most Americans see through relative to pure capitalism, most foreigners see it - undiluted with socialism - for what it really is. True many foreign leaders embrace it’s potential for personal income growth, but the average foreign citizen know that - pimping being heavily regulated in America, American companies are merely taking the pimp game abroad where there are fewer restrictions. This adds to anti-Americanism abroad and is fodder for terrorist/freedom fighter propaganda. [Don’t trip. The designation of freedom fighter versus terrorist is all a matter of vantage point. As a Black man, Nat Turner was a freedom fighter to me. American history depicts him as a terrorist. The minutemen are considered freedom fighters by America. The British branded them terrorists. Everything depends on your frame of reference.] And because so-called Christians come to them proliferating this system of pimping, religious wars and rumors of wars escalate and we Americans become less and less safe.

I’m about to close because I’m getting tired. But there is a biblical reason that I call ALL Christians who refuse to embrace even socialist elements in a largely capitalist system, “so-called” Christians  - including so-called Christian politicians. It’s because any Christian who has actually read his bible knows that the first church was a communal, socialist one. Yes, despite the rhetoric from “prosperity” churches that God wants his people to be RICH - which would undoubtedly make SOMEBODY poor (remember the pie? If some get more others get___?) - the first church shared equally.

If you go to the book of Acts, 4th and 5th chapters you will see of what I speak. All members of the early church sold their possessions and laid the monies received at the apostles’ feet who then distributed it “unto every man according as he had need.” Acts 4:35. They lived communally and the next chapter proves that - according to the bible - God was on board with this idea. The proof? The husband and wife team of Ananias and Sapphira kept back part of the money they had received for their possessions and because of this God struck them dead.

I have only one more thing to say and I’m finished. I won’t try to hold Christians to the standard of the first church. Perhaps it is too arduous a thing to ask folk to give up a life of privilege. People like to protect their positions of privilege. Jesus was killed in order to protect privilege. Don’t believe me? Consider that prior to the advent of Jesus of Nazareth, only priests and prophets were believed to have the ability to “talk to God”. Jesus came along and revealed that “the Father is in you” and that all could commune with him without a go-between. The priests - who lived a life a privilege because theretofore they were deemed the only ones who had God’s ear - had him killed as a result.

So, I understand what people will do to maintain privilege. I won’t even try to advocate for a socialist existence in America. I believe at the outset I offered that both capitalist and socialist systems are incomplete alone. But what I will say is that ANY Christian who demonizes even socialist elements in a largely capitalist system is a hypocrite who doesn’t know a DAMN thing about Christianity and couldn’t lead me to water if I were dying of thirst!   Creative Commons License
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  1. bohzo (hello) Mr. Barrett

    You words are so correct, big business is really pimping out American workers, workers are being mistreated and underpaid at a incredible rate. If we don't change the course we will become a third world country. I read Sandra's blog an angry black women she is a University Professor and very intresting, but she gave up blogging because she thought know one was reading. I read such blogs and often do not comment but guess that I should so folks know that people do read their blogs.

    Megwitch (Thank You)
    Have a great day!

  2. Well, Pokagon Member:

    I guess you now see the value of commenting. Thanks for the encouragement. Make sure you talk amongst your friends. it is imperative that people know the truth. Neither system is adequate alone. And economists are too busy being PARTISAN to tell you these things. At that same Friday retreat, President Obama said, “when I was sworn in the hope was that unemployment would remain around 8, or in the 8% range. That was just based on the estimates made by both CONSERVATIVE and LIBERAL economists, because at that time not all of the data had trickled in.”
    The question is do the terms conservative and liberal merely describe legitimate differences in their economic viewpoints or their different political stances.

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