The American economy is based on the monetary theory of capitalism; the Free Market system of entrepreneurship and free will choice. However, the current economic meltdown in America has placed that theory in question.
Capitalism is a workable system because it operates in a reciprocal rotation dependant on human labor, distribution of resources, and the consumption of the resources by the public in terms of needs and purchasing power. The cycle has to continue almost uninterrupted on every side for the system to thrive effectively, yet the slightest interruption could break the cycle causing the engine to stall and possibly crumble.
"The Invisible Hand" is a term coined by Adam Smith, the Scottish moral philosopher and economist who says 'the natural force that guides free market capitalism through competition for scarce resources. According to Adam Smith, in a free market each participant will try to maximize self-interest, and the interaction of market participants, leading to exchange of goods and services, enables each participant to be better of than when simply producing for himself/herself. He further said that in a free market, no regulation of any type would be needed to ensure that the mutually beneficial exchange of goods and services took place, since this "invisible hand" would guide market participants to trade in the most mutually beneficial manner.'" - Ref Source
In so many words, the Free Market is suppose to take care for itself and in slow times self-correct without intervention of any outside forces such as government or certain individuals with any self-interest in the market. Self-regulation of the economy, in theory and practice, would work if fair business ethics, protection of the worker and consumer, and respect for the social structure of family and community were involved. If any of these three basic principles are violated in any manner, capitalism can turn ugly and in a most negative direction.
Monopolies are an enemy of Free Market capitalism. Businesses such as Wal-Mart and Microsoft, that acquire large shares of the consumer market makes it harder for smaller businesses to compete and make money. Monopolies also gobble up workers and marginalize the pay scale to a base-line rate. This, in turn, limits the purchasing power of workers and families, initiates a wage-earning and class divide, and as a result, more businesses make less money; and the cycle continues until one or the other entities are of no value and/or soon depleted.
Of course, greed is a part of human nature and has proven to be much stronger than the concepts of sharing and equality. Capitalism, in its raw form, intensifies the human spirit of greed thereby cancelling out sharing and equality. On this fact, when monetary power rest in the hands of the greedy, they are naturally driven to become wealthier, disregarding the needs of the public. Afterward, indifference, selfishness, and apathy become social mores'.
As the spirit of greed permeates society, it fuels materialism, which brings on over-consumption of unneeded goods and heightens individual arrogance and indifference toward anyone unable to meet the materialistic demands of society. Once this covetousness spirals out of control, those who are able to reap the rewards of capitalism tend to blame the less fortunate for their situation and for any problems entrenched in society as a result of the economic divide between rich and poor that capitalism produces. In other words, people become puffed up and bigheaded and forget where they came from.
In theory, "Smith believed that while human motives were often driven by selfishness and greed, the competition in the free market would tend to benefit society as a whole by keeping prices low, while still building in an incentive for a wide variety of goods and services. Nevertheless, he was wary of businessmen and argued against the formation of monopolies." - Ref Source
In reality and as a result, this capitalist greed and the immense appetite and consumption of the rich, American manufactures export jobs overseas to increase profits thus taking jobs from the homeland. Furthermore, companies gouge consumers and freeze wages making it harder for families to survive and grow economically. In addition, the banking and credit systems, the dispersion of natural resources and ineffective, out-of-touch politics has brought the concept of the American Free Market to the point of collapse.
In America's consumer-driven economy, low-wage labor in the face of abundant goods and services that feed humanity's unquenchable desires, are no match for the temptations of easy credit, deceptive schemes and promises of wealth and riches. From credit card companies to mortgage brokers to pyramid schemes and churches, the greed for wealth has overshadowed the basic principles of human need. So, when found wanting in a so-called thriving economy offering unlimited opportunity to wealth, the average person falls as victim to the powerful.
For decades, America has operated on the assumption that the Free Market system is feeding the entire population equally and all are profiting from its effects. But in reality, a growing gap between the rich and the poor is the result. As the cost of living rises over the years, wages do not rise fast enough thus forcing people to purchase on credit, which afterward have driven up the debt-to-income ratio among millions of families. The higher the debt, the less often it is collected by the lending institutions and the higher the risk those institutions take.
To solve this problem of inequality, advocates for consumer and worker rights have petitioned the government to intervene and possibly regulate monopolies and big business. Instead of approaching the problem from the opposite side of the spectrum, from the side of the people, society, including government politicians, lobbyist, and the courts, believes the answer comes from empowering the very entities that are dispensing capitalist poison; the businesses, in hopes that a trickle down effect will refuel the economy and re-empower families.
Instead, labor unions that once protected the worker have disappeared; consumer protection in the courts have taken a back seat to business lawyers protecting the interest of the business, and politicians bow to the offers of interest groups that seek to advance their agenda instead of the peoples'. These one-sided approaches away from the needs of the people have led to an apathetic system of capitalist abuse on humanity.
A philosopher of their own, G.W.F. Hegel said, "To widen the market and to narrow the competition is always the interest of the dealers ... The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted, till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it." - The Wealth of Nations, Book I Chapter XI -
The wealthier and more powerful the rich becomes, the harder it is for the people to live and the more unfair the law, government policy, and social stigma becomes. When people are pushed to the point of desperation, they will resort to criminal behavior, either street or white collar. However, the most shrewd business man will capitalize on this new-found criminal behavior as a market within the greater society, such as America have resorted to today via the prison industrial and predatory lending systems.
As the divide grows and the people become poorer while the wealthy get wealthier, the middle class is disperse either one way or the other. Those fortunate enough to gain access to the money will eventually move into wealth and power while the unfortunate take a back seat to poverty and under-development. The government, meanwhile, is composed; of course, of members of the wealthy party thus the policies are made to protect the interest of the rich.
From that point, laws are made and enforced against the lower end of the social order and many people become potential criminals, despite the unethical criminality running rampant from the upper end of the wealthy entourage.
Hegel goes on to say: 'The government should do all in its power to combat this inequality and the destruction it brings in its wake. It may achieve this immediately by making it harder to make great profits. If it does indeed sacrifice a part of a class to mechanical and factory labour, abandoning it to a condition of brutalisation, it must nevertheless preserve the whole in as healthy a state as is possible. The necessary or rather immediate way to achieve this is through a proper constitution of the class concerned.' - G. W. F. Hegel, System of ethics - Ref Source
The United States government, run by Ivy League alumni and wealthy business owners, are completely out of touch with the average working family. They assume that trickle down economics reach the bottom rungs of society but in reality it never does. It gets caught and suppressed somewhere between small business budgets, state governments and universities, and white collar criminals sanctioned by unresponsive government policies made to protect the business class.
All those living below the state, working for small businesses, and not attending state or private universities never see a dime of that wealth, and are left, and have been left, to feed off the bottom of the social food chain. The urban areas are the worse with underfunded schools, second hand and second rate predatory community businesses that drains what little money the urban residences earn, and businesses that pay little and distribute the filth of immorality to its community.
When voices from those communities cry out for help, they are silenced before reaching the people who actually need to listen and hear their cries. Government stopping blocks are put into place to ignore the urban and rural voices yet open only to the needs of society's so-called suburban middle class citizens, the ones who have become debtors to the area banks, lenders, or who are government owned or funded.
Notice that during the 2008 campaigns, all the candidates referred to the American people as "the middle class." They never talked about the working poor or the poor, that is because those who are actually having taxes taken from their pay checks are considered citizens worthy of government attention.
Many lower-income workers are tied to a child tax credit and have no taxes taken from their pay checks simply because their wages do not meet or exceed the government standard poverty line. Most families earning less than $30,000 a year are finding it harder to afford the American dream, no matter how hard they work or save. Everything is unaffordable and one pay check out of financial reach, including college, new car purchases - which would establish a credible line of credit - or neighborhood starter homes. With banks tightening lending standards, it has become harder for the working poor to excel.
However, instead of launching billions of dollars in bailout money to encourage businesses to return to the States or to reopen in urban and rural areas, or to better educational institutions in economically deprived areas of the country; or throwing billions of dollars toward community reformation and revitalization, encouraging stronger families, which make stronger communities, or devising an alternative credit institution for the working poor aside from the higher, more stringent lending institutions, or even restructuring the credit system with a "New Start Program", the United States have no intensions of helping the poor to overcome but have all the intentions of helping the rich to excel.
Greed, stinginess and the lack of intelligence within the United States government trickles down throughout the Ivy League campuses to top-level management in large corporations to major media outlets through to Hollywood and all other major industries in the country and have spread like anthrax to the American people, because the people have become just as lackadaisical and selfish as the leadership in knowing how to discern between right and wrong, good and bad, and distinguishing between their left and right hands.
A society cannot function on a capitalist base unless the bottom rung is supplied with the tools they need to fuel the economic engines. If workers are not healthy enough to perform or not being paid enough to keep up with the cost of living, then the standard of living and the people's health will deteriorate. If the people cannot work and are dependant on medicines to do so, eventually, they will fall sick and cost more. As long as the pharmaceutical companies are making money, they do not care about the health of the workers, but it will eventually cripple everyone in the long run.
The stupidity of policy that outlaws and penalizes citizens by taking away their privileges to operate as normal citizens is unproductive and idiotic. Government courts and individualist movements and programs that break-up families causing misery, depression, and distrust among people; lawmakers and policies guarantee the future destruction of a generation of workers. By imprisoning, probating, and aborting, society guarantees a missing and dysfunctional generation. By rewarding deception, cover-ups, bribery, favoritism and privilege to the few, society is destroying the meaning of personal responsibility and merit, yet has the audacity to lay the burden on the poor whenever they want.
When leadership lies, deceives the entire nation, allow the rich to profit and the poor to suffer then turn and blame the poor for their plight; when leadership willingly and knowingly protect the interest of their own while neglecting the needs of struggling families with children and turn and blame that family for their struggles; when leadership does not provide equal opportunity in certain areas depriving certain people of their God-given right to success and liberty, then that leadership is not leadership at all, but are oppressors of the ones they ignore.
"From this system of Hegelian philosophy comes the historical dialectic, "that all historical events emerge from a conflict between opposing forces." These emerging events are above and different from the conflicting events. Any idea or implementation of an idea may be seen as Thesis. This thesis will encourage emergence of opposing forces, known as Antithesis. The final outcome will be neither thesis nor antithesis, but a Synthesis of the two forces in conflict." - Ref Source
America can save itself by ridding the country of corrupt and greedy leadership and turning their attention to the bottom rung first before the top. Those at the top are already there and need not attention. When people cry foul that they have worked hard and paid the price while others have not put in their fair time or share yet get relief, the same can be said for those who have attained their wealth and power but those who have not are not given a fair chance and are subject to public scrutiny.
The Bible tells of a parable that states:
"For the kingdom of heaven is like unto a man that is an householder, which went out early in the morning to hire labourers into his vineyard.
And when he had agreed with the labourers for a penny a day, he sent them into his vineyard.
And he went out about the third hour, and saw others standing idle in the marketplace,
And said unto them; Go ye also into the vineyard, and whatsoever is right I will give you. And they went their way.
Again he went out about the sixth and ninth hour, and did likewise.
And about the eleventh hour he went out, and found others standing idle, and saith unto them, Why stand ye here all the day idle?
They say unto him, Because no man hath hired us. He saith unto them, Go ye also into the vineyard; and whatsoever is right, that shall ye receive.
So when even was come, the lord of the vineyard saith unto his steward, Call the labourers, and give them their hire, beginning from the last unto the first.
And when they came that were hired about the eleventh hour, they received every man a penny.
But when the first came, they supposed that they should have received more; and they likewise received every man a penny.
And when they had received it, they murmured against the goodman of the house,
Saying, These last have wrought but one hour, and thou hast made them equal unto us, which have borne the burden and heat of the day.
But he answered one of them, and said, Friend, I do thee no wrong: didst not thou agree with me for a penny?
Take that thine is, and go thy way: I will give unto this last, even as unto thee.
Is it not lawful for me to do what I will with mine own? Is thine eye evil, because I am good?
So the last shall be first, and the first last: for many be called, but few chosen" (Matt. 20:1-16).
The moral is that it does not matter who put in the most time or who did the most work, it is that everyone agreed to be paid the same amount. Capitalism works the opposite, contrary to the Word of God and the practice of Christianity. Capitalism says, the amount does not matter, what counts is who is considered worthy of the most. Based on this theory, someone has to end up with nothing.
The middle ground for America would be to break the cycle of wealth economics and begin a structure of equality economics. Starting with bringing business to all areas of the country and not just suburbs and financial districts, but to urban and rural areas where factories once thrived. If the community is not working, it will cost more to maintain and eventually lead to poverty, sickness, and corruption.
Furthermore, the United States cannot afford a war at this time or any time in the near future. It must sacrifice guns for butter, amend relations with foreign countries and concentrate on its economic base in order to refuel the engines of financial stability. Instead of hypocritically blaming the poor, cut-throat fighting amongst political parties, America's Ivy League scholars must prove to the world and to themselves that their $100,000 educations were worth more than simple condominiums, yachts, and hummers.
Because of the greed that has damaged the very fiber of this country, leadership must humble itself and begin again a system that meets the needs of businesses and financial institutions and as much the needs and dreams of its economically-challenged citizens. If global collapse is the effect of entitlement programs for the poor, then the arrogance of the wealthy and the creation of the poor by capitalism is the cause.
God have mercy on the people of this country.
© Nov. 2008 by CR Hamilton || [TOP]
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