I recently finished up a course regarding the working class and poverty in America.
The "free market" myth was a focal point as it was part of the core in terms of flaws within financial capitalism. We read "Saving Capitalism" by Robert Reich, former US Secretary of Labor where he lays out the corruption built into each building block of American capitalism, and how it's currently failing us.
Now get ready, because it's long but so important that the general public recognizes:
Before I continue, I should note that Reich is not anti-capitalism. He roots for it as the best system but explains what has happened over the decades to explain how we got to the point we are at, and referencing periods in the past where the system was working for the majority.
The main point here is that the corruption built into what was once a prospering system for the majority is now really only serving to benefit a different minority: the top 1%.
Reich breaks capitalism down into five pillars: property, monopoly, contract, bankruptcy, and enforcement.
Changes in legislation, and mainly interactions between big corporations, Wall Street banks and government have been in their favor, giving them the upper hand while simultaneously damaging average Americans and their bargaining power.Within each of the pillars, he makes it a point to reiterate that the "free market" versus "free government" argument is a cover-up. It serves to mislead and blind because the politicians and big corporations debating this don't want the general public to understand that this is irrelevant; if they knew more, they would start to unravel the corruption, where it stems from, and how it intermingles. It makes it easier on these influential and powerful parties to spew this argument out to keep the real systematic problems out of sight.
Without government, the market wouldn't exist. It takes two.
Examples of changes within each of the five pillars represent the modern corruption:
Let's start with property. As technology has advanced and property now includes 'intellectual property,' requests for patents have increased. Reich highlights that there are even patents on the process of making certain drugs, which allow pharmaceutical companies to increase the price of their medications so high, that it's not even realistically available to most of the public who would need it.
In terms of monopolies, the intersection between economic and political power have created an uneven playing field that keep entrants and discoverers out of the market, lowering the number of entrepreneurial endeavors that could potentially come about if it weren't for these relationships.
Reich brings up the fact that natural processes are now monopolized as well. Monsanto farms, for example, is responsible for an enormous percentage of soybeans in the US will not allow others to know their "trade secrets"; they own a patent on biotechnology and their genetically modified seeds.
Consequently, consumers don't know what pesticides are being used, and it forces farmers to destroy thousands of dollars worth of seeds after each season because keeping any would be illegal under the rules that go along with the patent.
Contracts the 4th building block of American capitalism and as Reich puts it, they're capitalism's lifeblood. They exemplify another way the market is fixed by big corporations and government agencies because in many cases, the terms of contract agreements allow big corps an easy way out that is legal.
For example, Apple's terms and conditions are about 30 pages. Clicking "I agree" essentially means handing over your privacy rights, so no matter what may happen to your information, technically you agreed, so they're in the clear. They make it seem as though you really had a choice--as if every other smart device has if not the same, very similar terms.
Changes within contracts include employees at large corporations now having to sign non-compete clauses which limit their potential future job opportunities by prohibiting them from working at "rival companies." This further limits underprivileged Americans who don't have a degree by further limiting they're already narrow spectrum of potential jobs--an example of what keeps the poor, poor.
Bankruptcy was originally designed so that average Americans could start over, but now legislation has changed what types of things, and who can actually file for bankruptcy so that it's not available to those who would benefit from it most. Instead, many large corporations file for bankruptcy at the expense of workers and union members (workers costs are usually the first expense cut) while CEO salaries continue to rise.
Finally, enforcement isn't what it used to be, and funding for agencies that are responsible for enforcing policies. The IRS has been hollowed out significantly. This means reduced chances that unpaid taxes will be caught, and that the wealthy doing this will be audited. Legal fines are also insignificant for big business.
For example, Halliburton admitted to destroying evidence related to an oil spill disaster that made headlines, and their multi-billion dollar company was charged a mere $200,000. Fines have become just a part of conducting business for them.
You may be thinking "How is this happening?" and how big corporations get away with a mere slap on the wrist so often, while average Americans continue to struggle. Part of the answer lies in the fact that corporations often offer government officials positions once they're terms are up.
What does this do? Further ensures their financial, political and legal confidence. Remember the Monsanto example? Well, many of their past employees now have top positions at the FDA and agriculture department.
Campaign donations are another big factor. Big business and Wall Street banks donate millions to both sides, so no matter who "wins," they're agendas still have a good chance of being fulfilled. Don't even get me started on the millions spent in lobbying either.
All of this is going, and the top 1% continue to get richer, while many of their own average employees are struggling. Big business and banks paying their workers so low essentially means the rest of us are subsidizing large corporations for their refusal to pay their own workers a living wage.
There was a time when capitalism worked for the majority, with a large middle class living a comfortable life. In order to get back to that and have an economy that's sustainable in the long run, Reich says a reorganization is needed that will include changed laws on political contributions/job offers, bargaining power for the middle class, and perhaps most importantly... a denial of the "free market" vs "free government argument.