Tag Archives: profit

Income Inequality 103: The Coming Second Civil War

The Civil War provided the opportunity for a very few wealthy men and their progeny to consolidate their power and eliminate or control competition, prices, and wages. They took full advantage of this opportunity and transformed Traditional Capitalism into Corporate Capitalism.

Traditional Capitalism allowed a merchant, craftsman, or company to make a profit upon which to live with enough left over (a surplus) to re-invest in materials, research and development (invention.) Though the individual or company most likely wanted to make as large a profit as possible, there was no iron-clad mandate that he or it had to maximize the profit, especially if it meant the suffering of others, degrading the environment, or having to make an inferior product. The amount of profit to be made was determined by the individual or company and of course by competitors in a free-market system of supply and demand. It was an instrument of expansion and it did benefit the six cultural components of a society in varying degrees: military, social, economic, intellectual, religious and political. As long as it satisfied the needs of each category it was viable… and sustainable as long as greed did not prevail.

Corporate Capitalism is a system whereby shares of stock are sold in a company to create revenue (the surplus) that can be re-invested in materials, research and development (invention.) They are beholden to their stockholders to maximize their profits at any cost, period. They do not have the option of saying they will be satisfied with a profit of 7% when there are ways to increase and maximize the profit through any number of means, some of which are:

The weakening of unionism.

Controlling the size of the work force and therefore wages.

Using inferior materials.

Disregard for environmental impacts.

Buying the favors of politicians.

It is this need to maximize profits that will eventually kill the giant. Yes, there have been movements to keep the power of corporations somewhat in balance with the rest of society. Unionism, strikes, anti-trust legislation, laws governing working conditions, child labor laws, environmental laws, and other interventions were put in place to help keep corporations from running ramshod over the ordinary citizen. It seemed at brief periods during our history, that the collusion and monopolies of corporations started by the fabulously wealthy Civil War profiteers might be held in check. But like the phoenix, they always seemed to rise up once again, more powerful than ever, always intent on squeezing the blood from the stone through the maximization of profit.

Corporate Capitalism became the West’s instrument of expansion. It did provide a surplus. Unfortunately, the surplus was invested in dwindling resources and dwindling markets. Therefore to remain viable, which meant constant growth, corporations sought other markets overseas and began to help themselves to the cheaper labor and natural resources of less developed countries. For some reason, they never learned that the world’s resources are not infinite! (Historical development seldom happens overnight. The need for new markets and raw materials finds its roots in Colonialism, but it took hundreds of years before it consolidated itself in the form of Corporate Capitalism and Globalization.)

Nevertheless, sending corporate tentacles to entangle the resources and workers of the world by corporations of all the developed societies that comprise Western Civilization has led to Globalization. Globalization makes an allegiance to a particular country or to the welfare of that country’s citizens totally unnecessary. There is no allegiance to the planet itself. Their allegiance is now only to their stockholders wherever they may reside. And keep in mind those that hold a majority of stock in a corporation own the corporation. Also keep in mind that the stock market is nothing short of gambling and has little relationship to the true value of a company.

The gamble is that the instrument of expansion will keep providing a surplus with which to reinvest. But the surplus that a corporation must create is dependent on the lowest wages they can get away with and that the resources of the world will always be at their disposal. This is, of course, not true. But corporations do not think in historical time. They are not futurists. They care little about what the next century will look like. They care only about how their stock did today. But they have managed to put enormous wealth in the hands of very few.

The Chinese also have an institution that does not serve the people. It is a political institution, not economic, yet it has the same deleterious effect. The “umbrella” revolution in Hong Kong protests the fact that the tiniest percentage of vetted Chinese representatives (a fraction of a percent) will tell the people whom they can vote for. This does not seem so different from the tiniest percentage of billionaires (again a fraction of a percent) who decide our candidates. Think about it!

Because the development of instruments of expansion occurs in historical time, it is very rare, almost impossible, to pinpoint an event or date at which an instrument has become an institution. However, I would be so bold as to say the Supreme Court decision in Citizens United sealed the deal, allowing corporations and their lobbyists to buy our politicians. They determine who will be candidates and who will win. Citizens United (along with gutting the Voting Rights Act) was the death knell to democracy as we know it. In fact, we are a plutocracy, with the vast majority of wealth and power in the hands of the plutocrats.

The idea that a corporation is a person with the right to spend unlimited amounts of money on candidates to ensure their election threatens the hope that a true democracy can exist at all. Corporate Capitalism requires a large military/industrial complex to protect its holdings overseas in territories where it searches and seizes natural resources. It depletes and poisons the planet. It relies on the cheapest labor, which will only be tolerated for so long. And it leads to wars.

It only satisfies the needs of those who control the surplus, who are not investing it in inventions or innovations that may threaten its ability to maximize its profit. (For example, the resistance of corporations producing fossil fuels to seriously invest in green technologies.) Since it is not satisfying the needs of the society at large, but only itself and those who have a vested interest in the corporation, it has become an institution, totally self-serving with an abhorrent disregard for people and the planet.

This institution of Corporate Capitalism is steered by vested interests that control the Media, Banking, Wall Street, Congress, the Senate, the Judiciary, Regulatory agencies, efforts to combat climate change, infrastructure, health care, education, gerrymandering… the entire government and society! It is an institution, that if not held in check, will continue to consolidate power in fewer and fewer hands until the system collapses upon itself, wreaking havoc upon everyone.

In the meantime, this institution prevents the long-overdue increase in wages, and may threaten all social safety nets that keep the poor and working poor, the elderly and infirm, in a merely subsistence life style. As the discrepancy in wealth widens, there will only be two classes: the rich and the poor. The institution will allow a small stratum of society to be “comfortably” financially secure only to inhibit an outright revolution.

Remember, the three ways the dominance of an institution can be lessened or eliminated is through reform, circumvention, or revolution. The likelihood that Corporate Capitalism will reform itself to become once again a viable instrument of expansion that benefits everyone at all cultural levels is very slim. Circumvention is occurring in pockets of society and the economy. Two examples are the entrepreneurship of those willing to invest in green technologies and those who are returning to the production of non-GMO foods. Will we be able to peacefully untangle ourselves from all the corporate tentacles that strangle our lives? I do not know. I will be long gone. But if reform or circumvention does not work, it is time for revolution! It is time for a Second Civil War: not the North against the South, but the 99% against the 1%!

On a personal note: I have been discussing income inequality through the broadest strokes of historical analysis. My intent was not to discuss in detail the evolution of civilizations, but to provide some red flags of which to be wary; shine a spotlight on the commonality all societies experience as they evolve or devolve throughout history. My hope is this will help you identify in which stage we currently live and subsequently act upon it despite being an uphill battle.

I have said that subsistence societies do not produce a surplus and therefore have no instruments for expansion. Do not think therefore that I think any less of subsisting societies. I am not a capitalist. I think it is a system that only works for the few. Remember that Capitalism is an economic system. Democracy is a political one. Socialism is an economic system, not a political one. Separate those systems that are economic from those which are political. You can democratically decide to have a socialist economic system without betraying the tenets of democracy. This has been the practice in Western Europe for many years.

Finally, if the shit does hit the fan I would like to say that hippies would survive far more easily than any right wing, gun-toting survivalist in his underground bunker. Hippies, especially those who have lived off the land, off the grid, and built homes and farmed with hand tools, will know how to survive.

Hippies understand the benefits of cooperation over competition; they understand the importance of sharing and caring for each other. They understand the importance of peace, love, social and economic justice, and respect for the earth. These are not just pleasing phrases that hippies spout, but indeed take very seriously, for they know that until the needs of all are satisfied, no one will be satisfied.

Some of the happiest years of my life were spent living in a geodesic dome on a large chunk of forested land in the North Cascades. It was made entirely from recycled materials. We used no power tools. We had no running water, electricity, or similar amenities. We lived as if it were 1890 and not the 1970’s. We lived communally, pooling all our money and other resources, which were then spent equally on everyone. We bartered garlic for eggs, and hand woven scarves for chicken shit fertilizer. We ate naked in our prolific garden, picking just enough vegetables to satisfy our hunger. We baked pies, canned jellies and veggies, stayed warm with our double-barrel wood heater and stove, and cleaned up in our spring-fed, solar heated shower.

We gathered with other hippies at their homesteads. We made music, played games, made love. We were happy. We had no television or computers that bombarded us with the news we were supposed to hear. We were innovators and inventors and when I think back on how creative some were in providing a healthy and comfortable life, I am amazed and proud.

Yes, hippies will do just fine as long as they remember we are all of one mind, one heart, and one yearning for the rest of the world to follow our lead.

Namaste and peace to all beings,

The Unapologetic Hippie

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