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Our Descent Toward Third World Status

By       Message Stephen Unger     Permalink
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Since 1941, the US population has more than doubled (133 million to over 317 million). But the number of Americans employed in manufacturing is now the same as it was then: about 12 million. That number increased, roughly in proportion to the population increase, thru the mid seventies, peaking at just under 20 million in 1979. Then the long descent began. In the decade ending in 2010, about 5.5 million manufacturing jobs were lost via the ongoing de-industrialization of America. Since 2001, over 42 thousand American factories have been shut down [Snyder][Global]. And the factories closed were not producing buggy whips; e.g., computer manufacturing employment in the US was lower in 2010 than it was in 1975! It appears that this process will be halted only to the extent that compensation for America workers is further reduced.

In addition to factory work, US corporations are outsourcing research and design to other countries, mainly in Asia--again to cut payroll costs. IBM, Intel, GE, and other US companies have opened R&D facilities in China, thus exporting more high level jobs.

There are recent instances of new factory startups in the US. Some by foreign companies, and others by US Corporations, such as Motorola and GE. These are highly automated plants, employing relatively few workers, usually using many foreign-made components. Perhaps most significant is that the employees get minimal benefits and low wages [ Weissmann] .

The federal government is negotiating a new trade treaty involving a dozen nations, The Trans-Pacific Partnership (TPP) [ Hightower] . In addition to matters directly concerning international trade, it will prohibit many kinds of laws designed to protect domestic jobs, the environment and human health. It is being put on a fast track for quick Senate approval, with no amendments. Negotiations took place in secret with corporations, but not the public, at the table. Ratification of the TPP will lead, among other ill effects, to even further hardship for American workers.

Quite apart from material issues, such as money and job security, people who work diligently at essential, but unglamorous, routine jobs, such as janitors, or sanitation workers are not given the respect they generally received in the past [Stephan].

The dominant philosophy

The socio-economic system in operation today in the US is generally called capitalism, or free enterprise, and the political system is claimed to be a democracy. But, if we forget the labels, and just look at how the system actually works, and the direction in which it is headed, we see an ugly picture. 

According to conventional thinking, the major motivating force for people is the desire for unlimited income and wealth. This is supposed to inspire people to deepen our understanding of nature, to develop new techniques for harnessing nature, to create great works of art, to develop socially useful organizations, to organize enterprises to produce and market useful products and services. While there are, doubtless, cases where greed has had benign effects, these are not predominant. More commonly, those motivated by greed find ways to pervert all kinds of human activities into material gain for themselves, often at great cost to others. The dismantling of American factories, with the resulting harm to most American, as discussed above, is a good example of the effects of great power in the hands of the greedy.

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Another, literally sickening, example is the way a branch of the pharmaceutical industry extorts, from asthmatic Americans, billions of dollars annually in grossly excessive profits [ Rosenthal] . By exploiting their great political leverage, the industry managed to control the relevant government agencies, and influence legislation so as to ensure that drugs to treat asthma are available to Americans only at prices that are an order of magnitude greater than prices in Europe. An indication of their power is that it is actually illegal for Americans to import prescription medicines from abroad, or to purchase such products from mail-order pharmacies.

Can we do better?

There is something fundamentally wrong with a system that systematically mistreats the great majority of people. In what kind of democracy are the interests of the great majority of the population subordinated to the those of a small wealthy elite? Can anybody seriously claim that this group, in any reasonable sense, has truly earned their incredible wealth and incomes? Bear in mind that perhaps three fourths of the income of the most wealthy people comes from capital, usually inherited, and that much of the salaried income of those people is in the form of the huge amounts paid to top corporate executives [Domhoff].

Libertarians, who I generally agree with on the crucial issues of civil liberties and militarism, argue that the kinds of problems discussed above are due to too much government interference. While I agree that the government today is indeed a major part of the problem, I believe that this is not inherent in government per se, but rather a characteristic of the kinds of undemocratic governments that we have had for a long time.

The libertarian version of capitalism, with no government role in the economy, is unstable, self-contradictory. Without government interventions, the conditions for a truly free market capitalism can't exist [Unger-Reg]. I.e., cartels and monopolies would form to destroy the free market if we didn't have the government oversight--that is anathema to libertarians. This important function, implemented by anti-trust laws, has been deliberately neglected for many years as one of the consequences of the domination of government by wealthy corporate interests.

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Furthermore, the free market does not protect society against polluters, or consumers from products with non-obvious, but serious, defects. Civil law suits, the libertarian answer to this [Rothbard], while useful in many cases, is often not an adequate defense.

While there are particular situations in which competition is very useful in promoting efficiency, it is a poor basis for governing most human relationships. E.g., the current trend to keep all kinds of technical information secret for commercial reasons is highly counterproductive. Cooperation is far superior. Traditional examples include barn raising and volunteer firefighting departments. Cooperation involving modern technology includes engineering society standards committees, and free or open-source software [ Stallman ][ Wikipedia-Open ].

Rather than privatizing more and more governmental functions such as schooling, prisons, water supplies, and highways, we should be going the other way and increasing the number of services provided by local, state, and national governments. A potentially valuable alternative is the worker co-op [UngerCo-ops]. These should be encouraged via suitable legislation and tax rates. Same for co-op banks. Publicly run transit systems, electric power utilities, research and development laboratories, and even banking (as in North Dakota), should be encouraged. Education at all levels, including universities, should be publicly funded to enable everybody to be educated to the extent of their wishes and capabilities (as in the Nordic countries). A single-payer health insurance program, or a national health program, as in Great Britain, should replace the incredibly wasteful non-system that we have. A good case can be made for nationalizing the predatory pharmaceutical industry. Labor unions should be encouraged, with attention paid to keeping them democratically controlled by their members. Anti-trust laws should be strictly enforced to break up monster corporations. Manufacturing in the US should be revived using such means as appropriate tariff regulations [Unger-Jobs]. Steeply graded income taxes, inheritance taxes, wealth taxes, and transaction taxes should be used to reduce the obscene level of inequality that currently prevails. Commercial secrecy should be discouraged.

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http://www1.cs.columbia.edu/~unger/myBlog/endsandmeansblog.h
I am an engineer. My degrees are in electrical engineering and my work has been in the digital systems area, mainly digital logic, but also computer organization, software and theory. I am a Professor, Emeritus, Computer Science and Electrical (more...)
 

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