We are a Capitalist Culture. The entire course of the industrial era has been driven by capital investment in technologies and materials that together have increased economic production. In the U.S. – contrary to corporate folklore – much of that capital investment has been made by the government, often at the behest of business. Infrastructure was the primary focus. The federally funded railways were a major factor in the expansion of the West. The Interstate Highway System started by President Eisenhower, virtually guaranteed post-WWII economic growth and indirectly subsidized the boom in the automobile industry. The early years of NASA saw major new technological inventions and aerospace accomplishments by a government-funded mission-driven enterprise. Advances in the aviation industry, largely publicly regulated then, benefited greatly from those developments. Numerous aerospace corporations grew rich on government “cost-plus” contracts, all the while praising “free market capitalism” and “free enterprise.”
The allies had won World War II supported by U.S. government investment in rapid invention and deployment of new (mostly military) products, also generating full employment. The war economy produced many jobs after politically powerful capitalists forced unemployment-inducing cutbacks in the initially successful New Deal. Investment in productive assets is the driving force behind all economic development. Government investment of public capital – paid for by our taxes – has driven much of the growth of the U.S. economy. U.S. business has been a prime beneficiary of public investments over the nation’s entire history.
Corporate Capital and American Culture
Americans have come to believe that economic development has resulted only from the combination of private capital and personal invention. It is an unquestioned cultural assumption. Why? Because Big Corporate Capital now controls most cultural communication in the U.S.A. The interests of the biggest corporations dominate the content communicated in the mass media — also controlled by Big Corporate Capital. Corporate ideology is expressed in a variety of ways by twisting the ideas that would normally express core American values. The mass media implicitly support corporate agendas rather than the public interest, while sounding like they defend core American values.
A classic case of corporate capitalist culture distorting cultural values were the efforts of groups like the John Birch Society in the 1950s. Like the Birch Society, today’s Koch brothers’ front groups work to get “right to work” laws passed in most states. Who would not agree that everyone has a right to work? It is virtually a universal cultural value, closely tied to “American individualism.” However, the “right” of one person to work in a particular unionized factory or office – without joining the union or paying union dues – is not quite the same thing.
When a union negotiates with management for a living wage or safe working conditions, all wage workers in that business benefit from that negotiation. For a worker to have the “right” to not pay union dues or a fee for the cost of the negotiations that benefit him, that worker becomes a “free rider.” He or she benefits from the success of the group but refuses to pay his/her share of the costs of that benefit. Any one worker has a “right” to not contribute to the efforts of a united group of workers to achieve a living wage. But in that case, s/he should not expect to reap the rewards of that effort. Such blatant exploitation of the efforts of others is the height of hypocrisy. It is also a direct attack on the rights of all other workers to effectively bargain for reasonable wages.
Sure, one could point to some cases where a union has gained unjustified power. Unions, like any other organization, when they grow too big and powerful, tend to act in the bureaucratic interest, not in members’ interests. The teamsters under the ‘union boss’ Jimmy Hoffa come to mind as such as case . A man like Hoffa was rather similar to the likes of a Jamie Diamond or the CEOs of several other financial corporations today, who have ruthlessly exploited their positions as heads of their institutions. The main difference is that nobody had qualms about prosecuting corrupt union leaders. However, corrupt “Banksters” today seem immune to all but the mildest disparagement, no less jail time. Instead, we hear “nobody could have predicted the financial crisis,” when many non-corporate economists did just that as well as point out the corrupt nature of the behavior of the financial elite.
American Values: Minimum Wage and a Living Wage
Recent surveys make clear the American public’s view that workers should be paid at least enough to subsist – it is called a “living wage.” If you work full time, you ought to be able to pay rent and buy food, clothing, and shelter, the basics. Yet over the past several decades more and more jobs are at or near, even below in some cases, the woefully inadequate “minimum wage.” The power of corporations over the political culture coincided with the corporate takeover of the congress and many state legislatures. Wage theft is rampant in situations such as the fast food industry where workers’ power to defend themselves against abuse is at or near zero. That, of course, is where wages are extremely low and the supply of workers is much greater than the demand.
The pure apologists for capitalist culture even argue that there should be no minimum wage, so that the magical “invisible hand” of a “free market” in labor can find the “true value” of any particular job. In a civilized society, one would think, no job should be valued at less than is needed for survival. Yet many executives who have the opportunity to do so, pay starvation wages. I know small business owners who insist on paying their workers a living wage, even for unskilled jobs, when they could pay only minimum wages. But these are entrepreneurs who have consciences; they believe in the American values of fairness and mutual loyalty of employer and employee.
One retired business owner told me with great confidence that raising the minimum wage would be counter productive for low wage workers. They would simply have to spend extra on more expensive fast food because their higher wages would drive up prices. Others claim that raising the minimum wage would destroy their businesses, because their customers would not pay the difference. Most critics of a livable minimum wage claim it would be a damper on the economy. Yet in every instance where the minimum wage was raised significantly, unemployment went down as the local economy was stimulated by the increased demand. The additional income is mostly spent on necessities in the local economy.
Conscientious employers have proven the living-wage critics wrong time and again. Their businesses typically thrive, both because of the better mutual loyalty between employer and worker, and because the business just runs smother and is usually more responsive to customers as well because the owner has a better attitude about everyone. The public knows that the employment system in the U.S. is rigged to squeeze the workers and disempower them. That is why a new movement for economic fairness and justice is growing. At the same time, growing numbers of low-wage workers are recognizing that the only way they can break out of the trap they are in is to organize themselves and protest en mass. Despite continuing massive corporate propaganda, unions may be on the rise again.
Outsourcing America, or Reviving Our Economy
In the current situation of a continuing “wage recession,” we observe corporations sitting on vast quantities of cash. They hesitate to invest it in production, since low wages have driven demand for basic products so low. Everyone knows that a low-wage worker must spend every dollar s/he is paid just to survive. Production depends on demand. Corporations send capital overseas to reduce production costs and attempt to sell cheaper goods to workers here who cannot afford them. A shrinking middle class trying to survive on unsustainable poverty wages cannot maintain high levels of consumption. The rich can only buy so many mansions and yachts. The super wealthy corporate elites park their riches in financial instruments that contribute little to the real economy that would otherwise need workers at livable wages.
It is time to reassess the entire framework of the dying American economy. Narrow short-term corporate interests are destroying the potential for capital to be invested in creating many needed jobs in this country. The nation needs to do much work in areas that serve the public interest – such as energy efficiency – providing livable wages in the process. A massive investment of existing capital in converting the carbon economy to self-sustaining energy production and conservation would require many jobs. The fossil fuel industry cannot and will not provide such jobs – they are in the public interest, not the fossil fuel industry’s interest.
The so-called free market is anything but free. Capital has been put to many uses that cost society far more than their value to society and now even threaten our survival. Capital enables and empowers social action. Only a realignment of the role of capital in the new economy can make a livable society possible.