Failed Capitalism and Exploited Labor

As long as two largely interchangeable political parties dominate the domestic landscape, corporate elitists will continue to maintain and control a dysfunctional status quo, where the power of political contributions exceeds our power of ideas.  That is how the corporate state determines who gets heard and who does not, successfully blocking public debate about alternative forms of government in which third party candidates have equal access to voters and every candidate receives equal, publicly financed funding for campaigns.  Such an electoral process would replace the labels “major” and “minor” party with simply parties or, better yet, candidates, preventing corporate influence from stacking the deck. The economic crisis is one result of that systemic failure in capitalism stemming from a cultural exploitation of America’s work force sustained by corporate campaign donations to democrats and republicans alike.   Let us briefly examine how the American worker became enslaved by debt, and, consequently, America became a debtor nation.


From roughly 1820 to 1970, worker productivity and wages in the United States rose commensurately.  American workers, particularly after a systematic degradation of blue collar work in this country, began to discard traditional labor values of self-reliance, experience, commitment to craftsmanship and contribution to society. They turned instead to the dark side of capitalism, a cult of self, where success was defined as purchasing power, a soft despotism cited by Alexis de Tocqueville in the 19th century when U.S. workers still had limited needs, and their wants were neither artificially created nor manipulated by marketers.  Workers in these early stages of capitalism found the least noxious livelihood and worked, usually at home, in subsistence modes, often on a piece-rate basis.  Once wages increased with productivity, workers could suddenly be seduced into buying beyond their subsistence requirements and an illusion of “American exceptionalism” took hold of the country, a culture of consumption only now colliding with reality, the finitude of resources.


In the 1970s, productivity still increased but wages did not.  Computers began to replace workers.  European and Asian competitors to the U.S., whose industries had been demolished by war, had rebuilt them with state-of-the-art technologies designed to beat U.S. manufacturers by building cheaper and better products.  Women began working outside the home in greater numbers and another historical influx of immigrants swelled the work force.  Corporate America, looking for short-term profits, began shipping jobs overseas, a “can’t beat ‘em…join ‘em” philosophy for international competition.  Both American business and the American worker had a changing labor environment upon which to adapt.


Business adjusted to these changing times by keeping wage increases much lower than increases in worker productivity, thereby maximizing profits.  A wild euphoria followed as CEOs cashed in on these higher returns, paying themselves hundreds of times the average worker salary, complete with gargantuan bonuses.  Profits were less often reinvested for capital improvements and more often orchestrated into a orgy of mergers and competitor buy-outs.  Moreover, larger companies began to lend profit margins to underpaid employees and customers alike.  GM, as an example, became GMAC, more a bank and less a leading edge automobile manufacturer, maximizing profits by lending money to people who couldn’t afford their cars.  Other corporations followed suit, rather than pay higher wages to their workers, big business chose to lend money to employees instead.  Why increase wages to meet rising prices and productivity when corporations could lend money to their workers and have it paid back with interest?


Of course this was nothing new to industry.  In 1900, America had over 7,000 wagon and carriage manufacturers employing workers, who knew and crafted every component of the vehicles.  With the advent of Henry Ford’s assembly line, vehicle manufacturers gradually dwindled to the Big 3.   When craftsmen, who formerly had worked for the defunct vehicle manufacturers, were recruited to fill assembly line jobs, turnover rates were initially 9 to 1.  The culture of American labor was still very much a culture of individual craftsmanship and the fulfillment which comes with participating in every aspect of manufacturing a given product.  Furthermore, many American workers were still subsistence goal-oriented.  Once compensation for work met their costs for basic needs, productivity declined substantially.  Higher wages as an inducement for higher productivity only meant that subsistence requirements were met sooner in the work week and productivity waned, accordingly.  To overcome such urges in mass production work settings (now the electronic assembly line of cubicles, where computers have transformed offices of the future into factories of the past rewarding dispositions to conformity and bureaucracy), workers were encouraged to assume debt, to buy on credit.  Extraneous wants were created which could only be attained by disciplined long-term saving or the immediate gratification, albeit longtime shackle, of debt.  The combined psycho-manipulation of advertising, fads and immediate, credit-laden gratification gave rise to our indentured American working class, an American serfdom, an American proletariat.  These class distinctions are kept nebulous in times of overt nationalism and continuous states of anxiety over national security, yet another reason America is kept in a constant state of war.


In 1970, for the American worker, who had long defined success in life as purchasing power, wages suddenly failed to keep pace with even middle class simulations of opulence.  American workers were forced to work more hours, often both heads of households contributing time and energy to keep up with bills, while Europeans were working 20% less.  Consequently, and not surprisingly, the United States invented “fast food” and an unprecedented borrowing binge began.  The credit card was invented and homes were used as collateral to sustain debt.  Eventually, little or no collateral was needed for high interest “unsecured credit.”  These adjustments, both corporate and individual, have left the American working class exhausted.  Personal lives and families are in disarray, and anxiety is sky high as debts begin to exceed many incomes, joint and several.  The limits of capitalism have been reached.


All that remained was massive deregulation of Wall Street in the last 30 years concurrent with housing bubbles, inflated by rock bottom mortgage rates and absence of income qualifications, to bring this nation to the edge of an economic precipice.  Just as the U.S. worker, markets and banks have became exhausted by irresponsible leveraging and the exaltation of selfishness and institutionalized carelessness to the detriment of moral-cognitive virtues.  Likewise, our government, fatigued by corporate welfare, unprecedented national debts, subsidies, military contracts and other bailouts predicated on campaign donations to democrats and republicans, is taking a knee.  Ben Franklin said it best, “be frugal and free.”  We are no longer a free nation.



                                      G. Scott Deshefy

                                      Lebanon, CT



G Scott Deshefy is a candidate for Congress for 2010, running in Connecticut's 2nd District.

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