The Slavery of Capitalism (and Socialism)

In a televised interview on CNN Rand Paul (senator elect from Kentucky) was asked about a plan to ease the economic gap between the rich and the poor. His answer was something akin to some type of pantheistic economy, saying something to the effect that “we are all one, there is no rich or poor, we’re all part of the economy.” He then said, quite directly, that “We all work for rich people or we all sell to rich people.” All of this was said to justify giving a tax cut to the richest 2% of Americans along with a tax cut to the rest of Americans.

Whether Mr. Paul realizes it or not (most likely he doesn’t), he exploited a giant problem in the world today; we’re all slaves. We don’t have true economic freedom in America anymore and what is worse is no one seems to notice (or care). Even those who are debt-free are still slaves to the wage system.

Our recent economic problems have exploited the problem facing America’s economy, most notably that whether we lean towards Capitalism or Socialism we seem to fail. Sadly, under the recent administration, we have blended the worst elements of Capitalism and Socialism that has only further entrenched the average working American into a form of economic slavery. With the big bailouts – which we must admit that bailouts are necessary at times – huge companies such as GM were given money in order to stay afloat while small businesses were left by the wayside. Here we see socialism (using tax-payer money to subsidize a public firm) working on behalf of Capitalism (free-market competition). But this should come as no surprise since the two are really one in the same.

Industrial Capitalism teaches that competition is good and drives the economy along. However, as it is within the nature of humans to tend towards excess, such competition inevitably leads to monopolies. Often when we think of a monopoly we think of one company that has a tight grip over an area; however, a monopoly can also exist when there are only two or three choices for any given product or store. Chances are, if you want to go grocery shopping, you have three choices: Walmart, Target, or a grocery store chain that is “local” (but owned by a national chain). In all of this we have a monopoly – there isn’t any real competition because the three stores can drive the market. Why is organic food so expensive? Because the three stores don’t make a high profit margin off organic food, thus they drive the price up in order to equalize the profit margin they make on other foods. When one store does it, the other two can justify it and then “compete” with each other by lowering prices by cents, which are quite insignificant.

Though this demonstrates the problem of Capitalism, if we stick with the example of organic foods we can see the problems with Socialism. Another reason organic food is far more expensive than its chemical counterparts is that chemically enhanced/protected food is subsidized by taxpayer funds whereas organic food is not. Thus, the government chooses to redistribute the nation’s wealth to corporations rather than to small business owners or local farmers.

This is but one example of how both Capitalism and Socialism have failed America (and the world). Though the two are often put at odds against each other, they really aren’t all that different. In a Capitalist society, only the richest 1% controls everything. They eventually distribute all capital; the market tends in their favor and any competition is quickly snuffed out. While they may compete against each other, each one safely carves out a niche market for itself and tends not to interfere with the other’s niche market. One store appeals to the upper-middle class while another appeals to the strict middle class. The third store might appeal mostly to the lower middle class to lower class. In all three cases there will be something at each store to attract each class, but each one appeals to a niche.

Now, why doesn’t the government step in an stop such a blatant monopoly and indirect violation of anti-trust laws? The answer is quite simple; they’re part of the problem. At some point in our history Socialism and Capitalism began to work with each other. The richest 1% realized they could do well to befriend the 535 people in Congress and get bills passed in their favor. Why did health insurance companies (Capitalists) support the recent health care bill (Socialism)? Because they stood to make a huge profit on such a bill. Why would Congress pass such an inept bill? Because they stood to gain huge campaign contributions from Capitalists.

Thus, under our Capitalist-Socialist hybrid economy we end up paying the government and the massive corporations twice; we pay the government twice with our own direct taxes from our paychecks and then with our sales taxes and pay the corporations when we purchase from them and when the government subsidizes them. It would appear that we can no more trust the 535 members of Congress anymore than we can trust a group of CEOs.

Any attempt to change such a system might seem chimerical. After all, it should be obvious to the casual observer that we have entered into a plutocracy – one is rich or befriends the rich in order to be elected while the richest hire lobbyists to get their bills passed in Congress. We can hold onto the illusion that we somehow have a voice, but when only the richest candidates (or those best connected to the rich) are elected whence the public’s voice? If we dislike Candidate A the rich will simply offer us Candidate B or C (one Republican and one Democrat). Whichever one we choose will eventually only benefit the rich. The rich might have competing interests, but either way it is the rich who we end up serving with our votes, not ourselves.

When Ran Paul said that we all work for the rich, the irony is that this quasi-libertarian Republican was pointing out that we work for the government. The Tea Party can rally all they want against government spending; when they support Capitalism they support the system that led us to this situation; they support the American Plutocracy. They would rather us spend all our money on corporations and make the rich richer. But the Democrats are not free from blame either; they would rather tax away all our money to make the rich richer. The battle between Republicans and Democrats isn’t a battle over ideologies; it’s a battle between two different rich groups that benefit in different ways. Some benefit when there is less government intrusion while others benefit with more government intrusion; the battle is for the richest of Americans, not for Americans.

Ultimately, there must be a call for change. While there will always be economic disparity (as there should be) and there will always be those who are richer than others and those who are poorer than others, we should at least be left with our freedom. We should be free from a plutocracy that only looks after its own benefits. If I am going to fulfill my vocation and my vocation puts me squarely in the middle-class, I should still be free to have a voice and to have economic choices free from impersonal corporate greed.

Some would have us to believe that our hybrid system, our plutocracy, is simply some economic Cthulhu that will inevitably enslave us; there is no hope, there is no escape. Such a system seems to be the inevitable end and thus we must simply embrace it and move on. We must learn to work within the system.

However, I do believe there is a solution to the economic woes facing America: Virtue ethics. The problem with America isn’t necessarily the system (though the system has been born from and manipulated by an absence of ethics), it’s that we lack any ethical approach to economics. Is it any wonder that many business schools no longer offer classes in ethics? Or should it surprise us that if one were to study economics, one would study mathematics rather than ethical approaches to economics? The divorce between ethics and economics is so great that when I discussed this with someone, he looked at me and said, “Yeah, but we’re talking about economics, not ethics.”

If we are to see any change in our society, we first must trend back towards absolutist ethical standards, knowing that there is a right and wrong. Likewise, we must begin to apply such a standard to economics (and to every aspect of our lives). Under virtue ethics, especially one that acknowledged the innate value in every human, we would automatically stand against the “big box” stores. The reason is quite simple; such stores tend to treat the employees like machines. There is a company policy that all are expected to keep and conform to and that policy does not differ whether one is in San Francisco or Omaha. Employees are given numbers; while their local managers might know them, they are simply facts and figures to those higher up in the corporation. Those who support the innate value within humans should be appalled at such a dehumanizing practice.

Those who stand for virtue would likewise show an equal disdain to government intrusion on private lives, particularly in the lives of small businesses. They would support the government taxing large corporations and then distributing that money to smaller businesses as a competitive subsidy, but they would be against the government conglobulating with large corporations.

Under such a virtuous-run system, small businesses would be valued for the freedom they create. In general those who are employees of small businesses are treated better than those at large corporations (I can personally attest to this), mostly because there is a personal aspect to a small business that simply doesn’t exist with a corporation. While this might not always be the case, it is more often than not.

And that is the inherent problem with our economy – we’re so immoral when it comes to economics that we’ve forgotten about the dignity of humanity. We’ve soled our souls for cheaper merchandise, forgetting the entire time that it’s possible to make the merchandise cheaper without turning to massive corporations.

The only way America will ever change and increase in economic freedom is if people change their moral attitudes. So long as we embrace pragmatism, utilitarianism, or hedonism, we will continue to be wage-slaves to both corporations and the government. It all begins with a change in ethics and until that occurs, we’ll simply continue working for our rich masters. Like Mr. Paul said, we all work for the rich and sell for the rich; until we change our ethics then the rich will continue to own us.