Capitalism’s Good Versus Evil Dilemma

Where is Ebeneezer Scrooge when you need him?

The Blob is the embodiment of unregulated capitalism. It is capitalism incarnate. While it is true that some type of overarching system of oppression and control can manifest from other forms of societal organization, an oppressive societal control system is essential under unregulated capitalism. Capitalism, in its current neoliberal form, is about the unequal distribution of the fruits of labor. Under highly unequal, hierarchical societal systems, control and oppression become essential tools to maintain order in the face of extreme injustice. Part of this control system includes extensive perception management by the Corporate Owned News (CON) to redirect public attention away from corporate/government malfeasance. Malfeasance is pervasive in capitalism, and keeping that under wraps is a full time job. Some concrete examples are in order here.

I will start with a question. Have you ever wondered why the world’s most powerful, far-reaching and well financed military can’t seem to decisively win wars in even the most impoverished, destitute and remote places on earth? After all, we won the Gulf War against the moderately well-equipped Iraqi army in 1991. So it seems like a reasonable question to ask, and I’ll get back to this in a moment.

Capitalism has a motive problem. At its core, modern, deregulated, “neoliberal” capitalism is not about accomplishing great things, or about fixing any of the world’s problems. This type of capitalism does not care about feeding the hungry or caring for the sick. It is not concerned with pushing the frontiers of scientific knowledge, or making sure everyone gets a great education. Capitalism has no interest in housing the poor and homeless, or in curing chronic diseases. No, capitalism is inherently about maximizing a reliable cash flow to please corporate officials and investors. While it might seem too obvious to mention, it is the key point that needs to be fully understood if we are to make any sense of the current state of the world where oligarchs, global financial institutions and multinational corporations are running the show.

Unregulated capitalism has issues with good vs. evil (Link 1). The incentives of modern capitalism do not favor public good over reckless corporate behavior. In fact, reckless corporate behavior always trumps the public good whenever there is money to be made and neoliberal capitalism has its say. Clearly, “doing good” is often thought of as bad for business. So let’s take a quick look at just a few examples of capitalism’s major failures as a system to organize societies for the good of all.

If extracting and burning every last bit of oil and gas from the earth is wildly profitable, regardless of the consequences, what are the chances that unregulated capitalism will voluntarily transition to renewable energy sources?

If politicians get much of their campaign funding from wealthy oligarchs and corporate interests, how much attention would you expect politicians to pay to the wishes of working people, or to fight for publicly funded campaigns, or to impose public-serving regulations on big corporations?

If sensationalized CON click-baiting makes more money than keeping the public well informing about domestic policy and foreign events, then that’s what you are going to get with corporate journalism rooted in neoliberal capitalism. This is especially true if many news organizations are owned and controlled by wealthy oligarchs, which they are.

If letting excess food rot while people around the world starve is more profitable than transporting the food to where it is needed, then the smart thing for capitalists to do is to let the poor people starve, and write off the loss on your taxes.

If curing chronic diseases is less profitable over the long term than treating symptoms and leaving the disease intact, then, you guessed it; pharmaceutical companies will most likely focus on making drugs you need to take for the rest of your life (Link 2).

If pay to play health care, with high premiums, huge deductibles (out of pocket payment for services) and excessive testing and retesting (on your dollar) makes a lot more money for drug companies, insurance companies, labs and private hospitals, what chances do you think there are for enacting universal health coverage if neoliberal capitalism has its say?

We are currently witnessing a tidal wave of student debt. If charging exorbitant fees for college, while watering down the curriculum, focusing on profitable football and basketball teams and underpaying teachers makes a whole lot of money for investors in for-profit schools, what do you think the prospects are for high quality, free college education if we rely on capitalism to determine how our school systems work?

If fear mongering about the latest foreign bogyman in print and broadcast CON gets more viewers to read and watch thus driving up ad revenues, while also helping war profiteers make money dropping bombs and missiles overseas, then it is pretty obvious what neoliberal capitalism would do. Layer on top of this the fact that the war contractors pay for plenty of the ads on those outlets and you have a perfect explanation for our totally dysfunctional CON media.

This brings us back to the question of why the US does not decisively win wars in any of the impoverished countries where our military is deployed. Decisively winning military engagements against local insurgents brings all that war-related capitalism to an abrupt halt. The “War on Terror”  is the culmination of this corruption, where the military spending has no geographical limits and no possible end point because individual acts of future terrorism anywhere in the world (even staged ones) can be used as an excuse to perpetuate the world-wide military spending indefinitely. This is also true of the current “Cold War 2.0” against Russia and China, because that will provide CON excuses for modernizing naval fleets and nuclear arsenals to the tune of trillions of wasted dollars.

Our military is currently engaged in war making in Afghanistan, Iraq, Syria Somalia, Yemen, and who knows how many other countries in the world at this very moment. None of these far less wealthy countries did anything to provoke the US and certainly none of them attacked the US. Two-time Congressional Medal of Honor recipient General Smedley Butler perhaps said it best in the 1930s, and I quote directly from the beginning of his famous monograph:

“WAR is a racket. It always has been.

It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives.

A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small inside group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes.”

And as any good racketeer would tell you, keeping that money flowing is the key to getting rich. So why end wars if you don’t have to? If there is no public pressure to do something else with the country’s lives and resources, then the war profiteering will be too tempting for unregulated capitalism to resist. Currently each year, the government allocates more discretionary spending to the military than any other sector of the budget. This plays out across the US economy where every state has multiple military contracting corporations doing business, all constantly vying for a bigger piece of that military spending pie. Politicians from the federal to the state to the local level all have vested interests in keeping the federal military money flowing to the local economies in the form of war profiteering. Overseas military bases are a goldmine for defense contractors, and provide footprints for the US military to control distant regions on Earth. Many of the larger bases are permanent, as far as The Blob is concerned.

Lightly regulated, neoliberal capitalism is not productive in the traditional sense of the word, with endless war making and profiteering being perfect examples. In his famous monograph “War is a Racket”, General Smedley Butler went on to say that the way to end militarism and wars was to disallow war profiteering. Without the profit incentive, there would be no financial reason for endless wars overseas. If profits for all defense contractors were limited to 5% with no cost over runs, the military juggernaut would grind to a halt because other avenues of financial gain would be more profitable. The current US military would be greatly hobbled if they lost most of their corporate military contractors.

There are many other examples of how lightly regulated capitalism is non-productive, for example Wall Street derivatives and other “financial instruments”. They are paper-capitalism and do nothing other than puff up a non-productive sector of the economy. They shift money from one group of wealthy individuals to another group of wealthy individuals and back again (while also often pilfering the savings of working people, especially when crashes gut Individual Retirement Accounts). But stocks and derivatives do no work. They produce nothing but profits for some, often at expense of others, without any actual work being accomplished. Over twenty years ago, this was the neoliberal context in which Bill Clinton’s campaign announced; “it’s the economy, stupid!” But many workers would argue that a far better slogan to have run on would have been “it’s the people, stupid!”

The recent problems with COVID-19 vaccine development, patenting and distribution further highlight how capitalism fails to meet critical public challenges in an equitable, efficient and cost-effective way.

There are many alternative options to lightly regulated, neoliberal capitalism. Indeed, during the Republican Eisenhower administration, extreme wealth was taxed at a 91% rate in order to ensure that no one person could become as rich and powerful as, let’s say Jeff Bezos, owner of Amazon. Well-regulated capitalism protects capitalists from their own worst instincts and behavior patterns. It makes sure that everyone benefits from the collective work of the country, not just the people who already have a lot of money. It does not favor capital over labor, and treats both with equal respect. A well-balanced, mature capitalism would never let people go hungry, or go without medical care or a good education. The people are the country, and abandoning the majority of them means that the wealthy are abandoning their country in favor of themselves.

Henry Ford was called crazy when he doubled his workers’ wages to $5 a day, and it was predicted that his company would collapse as a result. Obviously, that didn’t happen, but worker turnover at the Ford production lines dropped dramatically. In fact, giving better wages and benefits to workers boosts the economy far better than supply side (trickle down) economics because money paid to workers circulates rapidly, rather than being hoarded and held hostage by the wealthy in overseas banks. The recent COVID stimulus checks helped people pay their bills and buy food, but of course, all that money was transferred directly to businesses and large corporations in short order. It is classic trickle-up economics, and it has made the wealthy even wealthier than before the pandemic.

When society works together to do good things, those efforts are never about naked capitalism, they are about collective pride and a desire to help others. In a mature capitalism, a rising tide would lift all boats (whereas current neoliberal capitalism leaves many working people stuck in very leaky row boats that often sink as the tide rises for the wealthy). Capitalism could be a critical part of doing good in society, but capitalists would have to drastically shift their current mindset. A mature and socialized capitalism would not be about immediate profits and constant growth; it would focus on people making a good living while doing their best to help others and improve the world. No one person would get to keep the lion’s share of the profits, as is the case with Jeff Bezos. That money would do far more good for society and the economy if it were spread among the Amazon workforce. In fact, if Jeff Bezo’s $180+ billion fortune were spread out among his workers, they would each get a $100,000 bonus check tomorrow. Jeff Bezos should make no more than 10 times his average worker’s salary. There is no rational justification for such a massively disproportionate distribution of the profits of the company, where Bezos has over $180 billion dollars, and many of his workers are on public assistance. Capitalism can be an engine for good, or an engine for bad, depending on how it is deployed. That’s just the point; capitalism is an engine, not a goal in itself. The key is what you do with it.

A mature and socialized capitalism would provide for everyone. Examples include universal employee ownership of corporations, where at least 51% of every corporation’s stock is shared ownership among the non-administrative employees. This would not only dramatically shift the balance of the distribution of the company worth, but it would give great incentive to the employees to do their very best. The only downside is that administrators and major investors get a smaller piece of the total pie. A mature and sustainable capitalism would not emphasize profits over public good, so environmental stewardship would not be a burden, but would rather be a rational, long-term mindset and goal. A compassionate capitalism would make sure everyone had food, shelter, healthcare and education, and it would not require a government to tell them this is necessary.  

At this pivotal point in history one might be tempted to ask, how will governments around the world ever regain control of the economic system that is now dominated by the super wealthy? Some members of the super wealthy oligarch class have more money than the GDP of many of the world’s countries (Link 3). Their minions move in and out of key government positions freely. Oligarchs have vast control over international financial systems and appear to have nearly full control over many legislative bodies around the globe. Corporate-run organizations such as the American Legislative Exchange Council (ALEC) now write much of the legislation that comes up for votes at the state and federal level. The oligarchs also have full control over the majority of corporate news media, which have become wholly owned subsidiaries of the corporate elite (Link 4). The oligarch’s legislative operatives have stacked many of the courts with pro-corporate judges. So the burning question is; who could wrest control back from the oligarchs at this point?

Money is like an addictive drug for some people, compulsive gamblers for example. This is clearly true of the super wealthy who continue to spend all of their time amassing greater wealth when they already have more money than they could ever spend in many lifetimes. They are like hoarders; just in their case they hoard billions of dollars rather than household junk. They use all that money to buy newspapers and TV stations, regulators and politicians, lawyers and judges, collage administrators and think tanks. It is a legitimate question at this juncture to ask, what governmental body is ever going to be able to put that genie back in the bottle? By what means will “we the people” regain control of our democracy? One thing is clear, trying to wrest control of our society from the oligarchs is going to be one heck of a fight, especially because most news media outlets are owned by the oligarchs. It is not at all clear who has the ability and courage to take up the challenge and is also willing to withstand the media onslaught that will certainly follow any nascent attempts at retaking control from the oligarchs. We have already seen how effectively Senator Bernie Sanders’ presidential campaigns have been undermined by those in power, including the CON news media. This means that getting a reform-minded president elected is going to be very difficult under the current system.

There are two ways that I can envision for arriving at a mature and equitable capitalistic system; the easy way, and the hard way. The easy way is for some of the nation’s most wealthy and respected capitalists to realize the current system is breaking down, leaving millions of people behind and not accomplishing great things and therefore decide to do something positive about it. If Bill Gates, Jeff Bezos, Warren Buffet and others convened a public summit to discuss the way forward they could call for tax restructuring to tax the wealthy at much higher rates, mandate higher wages and benefits for workers, universal medical coverage for everyone, and free college educations (as well as canceling student debt, which never should have happened in the first place). They could also declare that a Green New Deal be passed by Congress, dedicating 10 trillion dollars over 10 years to completely revamp our infrastructure and power grid and wean the country off of fossil fuels. Drastic reductions in military spending would be required. If this push came from the wealthy it would have lots of traction in Congress. But that Ebeneezer Scrooge moment is unlikely to happen any time soon.

The hard way is much harder, and much more likely to fail repeatedly before finally becoming a reality. This involves lots of public organization and action. It is going to take lots of focused people power and a wave of newly elected representatives who understand that oligarchy is not democracy and who are ready to do the hard work necessary to restore power to the people. This cannot happen without a focused grassroots effort and a substantial increase in the voter turnout in upcoming elections. But it will also require that progressive voters coalesce around a forward-looking agenda that is not aligned with the current Democratic Party. The best path to do this is not clear because massive opposition will be coming from the oligarchs and their corporate lobbyists, the Republicans, the Democrats, the CON media and many government institutions ranging from the military to the police. Protests will be met with military force, and the protesters will be vilified as domestic terrorists. This has already been happening, so it would simply be an extension of the status quo.

Positive change will also require a new journalism not tied to wealth and power. This could be done through the government setting up a very large, untouchable trust fund that would allow journalists to operate free from both government and corporate influence. Throughout modern history, oligarchs and capitalists have spent untold time and money on blocking the ability of alternative voices, for example socialist voices, to be heard by the public. This has caused the so-called Overton Window (the range of acceptable political speech) to shift ever rightward. That did not happen naturally, or by accident. Until the problem of the Corporate Owned Media is solved, change will be slow and sporadic.

There are several mechanisms that would help get us to a mature, socialized capitalism.

1) Tax individual earnings above 1 million per year at 90% (above 5 million at 100%). Also, implement an immediate 50% wealth tax on all persons who have more than $1 billion in assets. Continue this practice each year until no person has over a billion dollars in accrued wealth.

2) Tie the federal corporate tax rate to the salaries at corporations; for every dollar above minimum wage that a company’s lowest paid workers get, their federal tax rate is cut by 0.5%.

3) Profit sharing at all corporations is mandatory. All CEO compensation must be met with at least 10% of the same amount going to each worker (i.e., no CEO would get more than 10 times the amount of company profits than the workers got).

3) No company will be allowed to grow to the size where failure would significantly harm the national economy. Any company that grows to that size is automatically split into two or more corporate entities. Mergers are no longer allowed.

4) Corporations lose all person-hood protections under the law, especially free speech rights. Corporations cannot lobby congress. Limited liability protection takes away corporation’s rights to “free speech” because they are no longer acting under financial liability laws like citizens do. Further, a company is composed of many people and the owners/investors cannot speak for all of the employees. If you want free speech rights, don’t incorporate.

5) As noted above, it is critical to set up an untouchable government trust fund for journalism in the US. Journalists can work for CON outlets if they prefer, or they can get a decent paying job through the trust fund to eliminate corporate and government influence over content and messaging. If you want to get rich like capitalists masquerading as journalists (thinkTucker Carlson and Rachel Maddow, among many, many others), then join a CON outlet. If you want to do journalism, go through the trust fund.

It would be so much better for everyone if we could just go the easy way, with The Blob deciding voluntarily to do the right thing. If it were done voluntarily, corporations would have a lot of influence over how the new system is implemented and would probably get a better deal in the long run. If they would just stop exclusively thinking about the next quarter’s earnings, they might actually see the virtue in undoing the mess that they have created.