DISCUSSION ABOUT CAPITALISM
Karl Arnold Belser
21 November 2017
| I read the book Confronting
Capitalism by Philip Kotler. The book objectively
summarizes the state of the United States today., and I agree with most
of the details he describes. He says that
* Proposes little or no solution to persisting poverty
* Generates a growing level of income and wealth inequality
* Fails to pay a living wage to billions of workers
* May not provide enough human jobs in the face of growing automation
* Doesn't charge businesses with the full social costs of their activities
* Exploits the environment and natural resources in the absence of regulation
* Creates business cycles and economic instability
* Emphasizes individualism and self-interest at the expense of community and the commons
* Encourages high consumer debt and leads to a growing financially driven rather than producer-driven economy
* Lets politicians and business interests collaborate to subvert the economic interests of the majority of citizens
* Favors short-run profit planning over long-run investment planning
* Should have regulations regarding product quality, safety, truth in advertising, and anticompetitive behavior
* Tends to focus narrowly on GDP growth
* Needs to bring social values and happiness into the market equation
I have touched on many of these topics in this blog.
Capitalism did in fact raise the standard of living of most people over the last 200 years as Adam Smith predicted in his book Wealth of Nations. A rising tide raised all ships - until about 1970 as Gordon describes in his book The Rise and Fall of American Growth. Times have changed and the rhetorical question is: What is Next?
I observe that the United States is really not a democracy now. It is controlled by business, unions and professional organizations. The politicians spend most of their time raising money to stay in office, and the common man has no money. So I think the United States is essentially a plutocracy. The common man really has no voice in government.
The Citizens United Supreme Court decision in 2010 made this situation crystal clear:
Citizens United v. Federal Election Commission. Holding: Political spending is a form of protected speech under the First Amendment, and the government may not keep corporations or unions from spending money to support or denounce individual candidates in elections.- Google
For example, the United States, which is an out-of-control welfare state, had a difficult decision to make with the recently enacted federal tax law. The congress chose to make the United States competitive with the other nations in the world by lowering taxes and agreeing to take on a multi-trillion dollar deficit to continue to pay for the excessive welfare. This move was survival of the fittest on an national basis, but put the survival of many of the citizens of the United States in jeopardy because the benefits promised by the government can never be paid. I think that the move just moves the time of reckoning forward to the near future.
The the legislators apparently had a conscious intent to cause a crisis in health care. They removed the provision in Obama care to required healthy younger people to pay a penalty in order to pay for the benefits, without preconditions, for the older and seriously ill people. This heavy tax on the young is clearly unjust because they are already saddled with huge student loans and a job market that is disappearing before their eyes.
Since there are now no limits on medical spending the health care rate will rise to high levels and th public wills creme. They of course want something for contributing nothing. This is the Achilles Heal of the welfare state. Who can pay the cost?
Even if all of the wealth of the twenty percent was confiscated today the costs cannot be covered and it would totally ruin the economy like what has happened in Venezuela. Every other nation in the world meters out medical care in order to balance their budgets. Ultimately I predict that the United States will have to do the same thing.
Regarding all of the other issues that Kotler points out, they comprise an accurate statement of the United States today that cannot be reconciled. The humanitarian goal of giving everyone a good life regardless of what they contribute cannot happen. The law of nature is survival of the fittest. There are not enough natural resources to achieve this goal as long as the not contributing population is multiplying out of control.
One might speculate what all of these people in need will do when the promised benefits are not provided. I don't know, but I don't think the outcome will be nice. If one destroys capitalism they will have destroyed the goose that has laid the golden eggs that we are now enjoying.
Last updated December 21, 2017
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