Saturday, October 03, 2009

Capitalism and Socialism


Does it really Work?

Or Is It Socialism in Disguise

By Richard E. Noble

I am, and always have been a born and breed Capitalist who has done his best to pursue the American Capitalist dream of financial independence and hopeful luxury.
I believe in my rights as an Individual; I believe in democracy and in the Bill of Rights; I believe in my right to own property, to start my own business, to have money in the bank and to get rich - if at all possible. BUT, I don’t believe that people anywhere should starve to death or that anybody anywhere should work for nothing. And I especially don’t believe that the above such things should happen to other people because of my aspirations to become a wealthy Capitalist. I want everybody to live a comfortable life in a just man-made rational Civilization.
I don’t trust government - any government. But I have a dilemma - I don’t trust businessmen either. I have been in business. I consider myself a business-mined type person. And to be totally honest with you, I don’t trust business any more than I do government.
I have never worked for a boss who I like or admire. And the really sad part about that last sentence is that I have been self-employed for the greater part of my working career. When my wife was in my employ she went on strike several times and quite on multiple occasions. She orchestrated both walk-out and sit-down type strikes. She never resorted to picketing but I did think of locking her out several times. We finally negotiated a verbal contract that we both could agree to and live with. I was not entirely happy with the final agreement but neither was she - and, of course, this is what makes for a truly happy marriage. I only wish that I had been smart enough to negotiate such a contract when we first got married. But as you all know, love is not having to negotiate a contract. So where does that leave me? In my opinion that makes me a typical American. I think that is what being an American is all about - not trusting anybody.
I have been studying and reading about Capitalism ever since I can remember. But before we get into that, let’s say what I think Capitalism to be.
Capitalism is where the means of production along with the natural assets of a nation are owned by people - individuals. Corporations? Stock holders?
Capitalism had its birth in the Industrial Revolution - as I understand it. Before the Industrial Revolution there was no such thing as a “Capitalist.” There were rich people and Kings etc., but no Capitalists.
Capitalism, via industrialization made possible by individual invention and personal investment changed the economic world. It changed the whole structure of things. But has it been successful - did Capitalism work?
I don’t think so; and I’ll tell you why. It might take me a few pages here but bear with me.
Let’s start out with one of the first major Industrial enterprises - the textile industry.
The textile industry started here in the U.S. in the northeast in the early part of the 18th century.
It began rather surreptitiously with some of our enterprising citizens going over to England and stealing what they could of British ingenuity. But it was for a good cause - they wanted to get rich. Actually their intentions were more noble than that. They wanted to get rich and they wanted to screw the British. All in all though they were well intentioned, most of the early pioneers in the U.S. textile industry were good, conscientious Christian types. They wanted to make the world a better place. I think one of the very first entrepreneurs was a wealthy Quaker and he offered to give the entire mill to the British citizen who knew the industry well enough and would stab his homeland in the back and come over here and set up what he had learned over there. This was against the British Law at the time and any man who did so was considered a traitor. Getting rich was not against British law; they just wanted people to get rich in England only. The penalty was death. But one man did the dirty deed nonetheless. He is in our history books but I don’t think he got even honorable mention in the British history books.
In Lowell Massachusetts the first textile mill employed mostly woman and it was designed to be spiritually beneficial and uplifting to all the poor farm girls who came to work there. And for awhile they say that it was. But then as the Capitalistic system dictates, one free enterprise led to another free enterprise and pretty soon we had not only women working at the mills but children also. Pretty soon the local farm girls had enough and the mill owners began to import immigrant laborers from overseas. And as the foreign laborers flowed in, the wages got lower and lower; the working conditions got worse and worse; the housing became deplorable and all these people began dying - the workers that is; the owners and investors became extremely wealthy. A few foremen and some higher-ups got some pretty good wages also. But all in all things got so bad that social upheaval erupted. Police and militia had to be called in and lots of folks were machine-gunned, murdered and killed. Overall from the Society’s point of view, I would say the textile industry was not working.
Now the few people who owned the textile mills disagreed. They had arguments very similar to the tobacco industry of today. They denied that working in a textile mills was hazardous to anybody health - even though most textile workers were dying before the age of thirty; even though children who started working in the mills at nine or ten were dead before they were twenty or twenty-five.
The bi-products of the textile mills was air pollution, water pollution; housing shortages, overcrowding; poverty; disease; and overproduction. But on the other hand, a man of modest means could buy a pretty neat suit of clothes at Brooks Bros. for a reasonable price and the ladies could buy some nice calico prints cheaper than ever before.
In any case for better or worse the textile mills spread all over the northeast and then the Midwest. When they had finally worn out their welcome in those areas they left. They didn’t pack up and leave - they just left. They left all the pollution, all the garbage, all the disease, all the destitution and poverty, all the dead bodies; all the dying people - they even left miles and miles of old redbrick buildings. They took most of the machinery but they left the rest for the taxpayers or the society or the community or whoever it is that is left when these people go. They took the profits and their fortunes - and they left. And now they were “Capitalists.”
At first they just went a little further south - but they did the same thing there. And after awhile most of them left the South and went even south-ER. They went to South America.
In South America they conducted their business exactly the same as they had done in North America.
Today they are all over the world - in Asia and in China - everywhere. And the same thing that happened in North America in the 1800 is happening over there.
But on the other hand we can all buy T-shirts and underwear at a very reasonable price.
The question is as Dr. Phil would say - Is this working for you?
Well, it is working very, very well for a few; it is working very well for some others; and it is working well for a good many others; but then it is working poorly for several millions of others and it doesn’t look like it is ever going to change or be any different. Is this a “good thing”?
In the United States of America I would say that the Textile Industry was a failure. It didn’t work. For one thing, it is gone; and it left a mess. The individuals and stock holders of that industry took the profits and the taxpayers and the citizens of the United States paid the costs. It was Capitalism for the owners of the textile industry but it was Socialism for America. We the people socialized the cost, while they, the Robber Barons, Industrialists, and super wealthy Capitalized the profits
Now let’s look at another Industry - the mining industry.
I don’t know if mining in America began with the 49ers but it seems like a good place to start. Nothing could have been more egalitarian than a mule and a bearded Gabby Hayes type prospector setting off to find his treasure. This led to a lot of “regular” guys becoming very wealthy. It also led to a lot of regular guys getting killed, beaten, robbed and whatever - but that has always been the romantic part of the American Spirit of freedom and independence - so what the hell.
But somewhere along the line mechanization, invention, organization and the Capitalist and Industrialist - and bankers - got into it. It wasn’t long before Gabby Hayes and his mule were a part of the nostalgic past and punch clocks, foremen and business mangers had taken over the pits and holes of the wild, Wild West and elsewhere.
It wasn’t long before everything that I just attributed to the textile industry was now part and parcel of the mining industry - only worse.
The miners were of the independent, rugged type and they didn’t just wander off someplace and die peacefully - they fought back. Colorado was a war zone. Utah and Idaho weren’t much calmer. The mine managers had the militias and the federal troops along with the governments and the legal system - but the miners had courage, blood and guts.
The mine owners couldn’t just move their operations south or to another country - so they fought it out. They killed, framed, murdered, lynched, castrated, slaughtered and starved a good many troublesome miners to an early grave. They bribed, cheated, finagled and infiltrated the Governments - local, state and federal. And eventually they got what they wanted.
They got the land from the government basically for free; they got the gold, silver, copper, coal, and whatever out of the ground at the cheapest possible labor cost; they had no obligations to the land, the environment, the streams, the rivers, the mountains, the hillsides, the country or to the people of the United States.
But even so, eventually most of them left the United States and brought their same tactics to foreign lands where the people were less sophisticated and could be duped more readily. Today these industries are busy doing the very same things in Bolivia and China that were so successful for them here in the U.S.
Strangely enough the people who did these horrible things here in the United States are dead and buried and many of the folks who are carrying out the dastardly deeds of these ancient entrepreneurs are not even descendants. They are a new breed of like minded modern day folks - often homegrown in their own nations. The descendants of many of the murders and killers who had loyal everyday patriots machinegun everyday people right here in America - are now involved in philanthropic trusts, building libraries and funding institutions of higher learning - and some are even running for the Senate and the presidency of the United States of America. And so it goes.
But philosophizing aside, the bottom line is once again, the people of America were left with the pollution and the holes in the ground, the bad memories and the dead bodies, and the managers, investors and Capitalists got the profits. The American Businessmen “capitalized” while the American People Socialized.
From an “individualist” point of view I suppose one could say that this “capitalization” or privatization of natural resources worked. Some individuals did become very, very wealthy. But from a national or democratic perspective; form a societal or national perspective, I wouldn’t say that “we the people” did all that well. I would have to say that mining as well as the textile industry was a failure. They provide few in America with a living today and we the people are still paying for the cleanup or worse yet living with the pollution and ill health effects that these industries left as our “legacy.”
Strangely enough we all - 300 million of us still wear socks and underwear and we still can buy copper tubing at the hardware store - it is just that fewer Americans make any money from the deal. If you use the patriot’s war analogy we could say that all those working people who fought, were starved and died for your right (and my right) to earn a better living here in the U.S.A. - gave their lives in vain.
Let’s quickly review another industry - banking. Banking is a business and it could be considered one of Capitalism’s prime movers.
Banking started off very primitive. In the beginning banks were just that - they were banks. They were vaults and safes situated in secure buildings where people paid a rent for the privilege of having their gold or silver watched over under armed guard. There was no trouble with a bank being a bank; it was when banks got into “banking” that the industry began to stagger.
The problem came with the notion that a banker could have his cake and eat it too. It was not with the idea of being a “savings” institution that brought on the problems. It was when the banks became “savings and loan” institutions.
Even good old Jimmy Stewart was hard to believe when he tried to explain to people in the movies that their money was there in the bank when it really wasn’t.
It wasn’t disgruntled employees that wrought havoc by picketing and striking the banks - it was the bank’s customers. They called this type of uprising a “bank run.” People ran down to the bank and said; “I want my money.” This wasn’t all that problematic until lots of customers started showing up at a particular bank at the same time. Very quickly the bank in question was forced to refuse the depositors their money and lock their doors. They could not return to the depositors the money that they had loaned out to their clients because they didn’t have it any longer! People just didn’t understand this.
The first solution that banks devised to deal with this problem was to form co-operatives - a number of banks joined together. They pooled their reserves and when one of their member banks had a “bank run” they rushed cash over to their aid.
But if a run persisted and spread into a “panic” - the party was over and once again everybody had to “lock out” their depositors.
Banking co-operatives got bigger and bigger but so did the runs and panics. Finally during the Wilson administration the bankers got the government involved. Mr. Wilson was a college professor but he admitted that he was no banker - but nevertheless the American people ended up with what was called a Federal Reserve System.
Suffice it to say, it was not only President Wilson who didn’t understand the Federal Reserve System because in 1929 the whole thing came tumbling down - Federal Reserve System and all. The banking industry collapsed - it failed. The financial heart of the Capitalistic system flopped. Once again the Capitalist idea had failed.
The catastrophe was finally solved by adding to the Federal Reserve System the Federal Deposit Insurance Corporation. This informed the customers who deposited their money in a bank covered under this program that even if your bank doesn’t have your money when you want it - we will give it to you. “We” being the Government ... you and I ... the taxpayer. In more political terms, the banks were socialized.
And even today we had two of the biggest socialistic bailouts in our history - the Savings and Loan disaster followed by the Commercial Bank disaster. We even bailed out Mexico and Japan and if we don’t continue to bail out the banking systems around the world, the whole system could have a total collapse. Every banking system in the world including China and Russia, are tied into the “Dollar.” Now I’m not complaining about this Socialism, I would just like to know what “we the people” are getting out of all of this. It looks to me like we are getting lower wages, fewer jobs, higher taxes, inflation of our everyday costs, more poverty, more homeless and Wal-Mart - and Wal-Mart is the best part.
So once again we have an industry that keeps the profits when things are going well and “we the people” absorb the loses when things go wrong. In fact, they charge us (the people of the U.S.) for the privilege of borrowing our own money from them. It is a real good business. Many very, very smart people love the banking business.
I personally don’t mind that we keep this industry solvent and secure but shouldn’t “we the people” get a kick back here, there or somewhere - as opposed to paying a service charge?
Next let’s take a gander at the railroad industry.
In most of our history surveys we will read briefly about how the railroads opened up the West; how the railroads built towns and communities; how the railroads built factories and technology and on and on and on. But the deeper one delves into the history evolution and eventual demise of American railroads - the bigger the horror story grows.
Some historians are truly optimists - they almost always see the glass as full to the brim. I can imagine the historian of a thousand years in the future writing about the Nazi Holocaust and pointing out its advantages to curbing the over expanding population growth and all the new discoveries that were unleashed in the gas and pesticide industries - not to mention, oven technology.
But let’s try to call a spade a spade here - railroads must go down as one of the most corrupt endeavors in American History. The land grab alone by the railroad barons was off the charts. These guys were given enough land around their proposed railroad tracks to start whole countries. Almost all history books will mention this fact.
In relation to their workers they are right there with the textile and mining industries. Workers were killed and maimed on a daily basis by the hundreds. They were used as long as they were strong and healthy and then discarded - to be picked up by charity and the good will of their fellow workers.
The railroads competed themselves right into the ground. They had more dirty bond issues, stock market crooked deals, inflated shares and unscrupulous financial chicanery and political corruption than one could list. On top of everything else they were totally subsidized by the government and for the most part, they still are today. Without further ado or elaboration I think it could be objectively stated that the railroad industry was another capitalist failure. It was more than a failure it was a disaster. Just start reading about it and find out for yourself - don’t take my word for it. It is all over the pages of your own history books. Even the laying of the railroad tracks was an abortion for the workers involved and the taxpayers. When you read historians that can fluff over all these things you realize how brainwashed we all are.
If it weren’t for the government (socialism) from the beginning to the present day - the railroads would never have come about. And what did “we the people” get out of it? We got miles and miles of dilapidated track stretched across this country; we got old abandoned depots; we got below sustenance wages; we got thousands of dead and injured workers, woman and children; and a modest amount of multimillionaires - most of them the exact same folks who prospered from the banking, textiles, and mining.
Once again while the Capitalists capitalized the profits, the American people socialized the costs. We paid for their losses, we paid bonuses for their inadequate tracks; we paid for their cutthroat competition. We paid to get them started and we paid for the clean up when they were done. My God! The American dream!
Where do you want to go next? How about steel? how about oil? how about insurance? how about pharmaceuticals? how about health care? what about automobiles?
Steel and automobiles and oil have been traditional failures in the classical manner that I have just described above. Insurance, healthcare and pharmaceuticals are failures in the making. They are failing right now and my guess is that they will be bailed out in the same old, well-fare (welloff-fare), socialistic manner - “we the people” and the population at large will pay through taxation and inflation while these industries will skim off the profits and leave the losses and the social consequences to us.
At this moment I really don’t see any alternative to socialism. Socialism is what is. It really cannot be denied. It is the a priori fact of the matter. But we should do it all the way not just in the well-fare tradition; “we the people” should also share in the profits as well as the costs and the losses. I would be in favor of a better idea than socialism - but I haven’t read about any such thing nor have I been able to think up an improvement. Communism is not good and as we have seen around the world, it is not working. I have read many books offering various alternatives. But when you study these alternatives they are invariably socialist in nature. The so called capitalist alternative invariably amounts to a good life for the few at the expense of the many - here and around the world. It is like Socialism is the Capitalists security blanket or “idea bank” of last resort. It seems that what we here in America call Capitalism is really a bad joke – and the joke is on us.

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