Why Capitalism Is Failing
(I am writing a series of articles on the failures of our capitalistic economy because I want people to start asking the question: Why is all this happening?)
When I started to write about politics, my biggest concern was the role money played in it. Consequently, my earliest articles were about campaign finance reform and stopping billionaires and multinational corporations from buying the election of politicians who would do their bidding. I saw that flouting of the democratic process as the greatest evil in our political system.
I still believe that money in politics is one of our most important problems and should remain a great concern. No doubt many supporters of Senator Sanders will agree with me. Bernie not only emphasized the corrupting effect of money in politics over the course of his presidential primary campaign; he has raised the issue again in his new spin-off movement, called "Our Revolution," which is designed to support and elect genuine progressives to office at every level of government from the bottom up. I should note that I agree with Bernie not only on this issue but on most of what he says. At the same time, however, I feel he is missing the boat on something that is even more sinister and more dangerous to our republic than anything that has come before.
As background to this point, I should mention the following: I don't have a PhD in economics or an MBA in business. I've never held political office, and I attended college for only two years. Still, that doesn't mean I haven't learned many things in the 65 years I've been on this earth. One important thing I've learned is that history is written by the victors. I watch many documentaries that portray leaders as people who are gifted with some kind of vision that allows them to do exceptional things; they are made to appear bigger than life and often presented as virtual demigods compared to other men. I've also seen how the narratives about such men differ, depending on when a documentary was made or an article was written, and how they change through the decades in parallel with evolving social values. A good example is Franklin Delano Roosevelt. I was brought up to believe that FDR was a giant among men. That seemed evident in the fact that he worked in behalf of the common man despite having roots in a wealthy family that came as close to aristocracy as you can get in America. Now, however, I read that FDR was not just trying to lift the common man; he was also trying to save capitalism.
Today, there are leading intellectuals, such as Chris Hedges among others, who are saying that capitalism is in its death throes. Having never been a fan of unfettered capitalism, I find this verdict a source of hope for constructive change, but also of fear for what could be very dangerous consequences. The outcome hinges precisely on the point on which I think Bernie Sanders--who wants to reform the capitalism we now have without changing its underlying structure--misses the boat. I strongly believe that, without fundamental structural change that extends to the political economy as a whole, the capitalist system will surely collapse. But I also believe that its fall carries with it the great danger of social chaos. In any developed nation, its economic system serves as the glue that holds society together. America's economic system is capitalism, whether we like it or not. Its fall would cause destructive repercussions throughout the society, and, considering the global reach of the American economy, throughout the world as well. The combined result could be catastrophic.
Today, almost every major economy in the world is based on capitalism. That fact is no accident. Capitalism in fact works well when economies are expanding incrementally. At this point in history, however, many economic experts both inside and outside of government recognize that the system can no longer function as it did throughout the industrial age. The problem is that there are more things to buy and fewer people willing to buy them. The system is imploding. Markets for the goods being produced are shrinking, because they no longer offer what most people really need. This is especially true with respect to products being pushed in America.
In spite of diminishing markets, however, multinational corporations are making out like bandits. Dylan Rattigan, an insightful analyst who had a show on MSNBC, was pulled off the air after he went into a rant about how the multinationals are extracting wealth from the people, especially in the United States. But it's not only Americans who are hurting; it's also people in the European Union, in Asia, in Africa, and in most other places around the world.
It was a different story directly following World War II, when American productivity and wealth for the middle class were tied together. In those days, as productivity rose, so did wages. Regrettably, that's no longer the case. Today, wages remain stagnant as productivity rises. This is because America's financial leaders themselves recognize that capitalism in its present form is in its death throes. In consequence, they are trying to squeeze as much money as possible out of the economy before it finally collapses.
In the early 20th century, the U.S. had the menace of communism hanging over its head. When the Great Depression came around, many politicians knew that, given the very bleak economic conditions, they had to do something to keep the American people from embracing Soviet-style socialism. In order to appease the masses, Roosevelt embarked on a giant jobs program designed to rebuild the country's physical infrastructure and produce manufacturing jobs. He didn't do this because he was a great visionary; he did it because he knew the government's back and the American state were against the wall. At the time, communism was a real threat to the existing American power structure. Sad to say, it does not remain a threat today. What makes our own future bleak, and is so dangerous to both our country and the world, is that we no longer have a viable alternative to our unraveling capitalist system.
What We Can Do
Because America and the world now effectively operate under only a single economic system, capitalism, we have no choice but to restructure the system in a way that restores the balance between increased productivity and higher middle-class income, and also meets the real needs of people. In order for capitalism to function, the state must have the necessary capital to ensure that people have enough to eat, have access to health care, and are properly clothed and housed. When those essentials are unmet, it is pretty hard to achieve any kind of consensus as to what additional investments should come next. So, to my mind, the first thing we Americans must do to restructure our crumbling version of capitalism is to reduce wasteful spending. What follows are several ideas for achieving that goal.
Lower military expenditures. Here's an area ripe for real structural change that goes beyond the reforms Bernie has proposed (though, as you'll see below, I also agree strongly with those reforms). We currently spend 54% of our discretionary budget--over $800 billion annually--on the military, not counting the money we spend on spy agencies and so-called "black" operations. That is ten times more than is spent by our nearest competitor, Russia. We in fact , spending almost as much on our military as the rest of the world combined, including the maintenance of hundreds of military bases around the world. Even adjusting for inflation, last year's military budget was larger than it was during 1945, the last year of World War II. And we have never seen the so-called peace dividend that was promised to us after the fall of the Soviet Union.