I was never an economics person; I didn’t understand the language. Obviously economics has its own kind of language to keep the understanding of economics beyond the reach of the average person. This is important for two reasons, to allow for the creation of the economic expert, and to keep the average person from knowing what the economic experts are up to because if they knew they’d be really, really pissed off. Capitalism is an economic system based on private ownership; the means of production, distribution, and exchange of wealth is controlled by private individuals and corporations. Since this has never made any sense to me I decided to do what I always do when I don’t understand something; I draw it, do a lot of research, and then I attempt to translate the language of the ‘thing,’ into look-Spot-see-Jane-run simplicity. As most of the women I know, young, middle-aged and old, don’t have a clue how capitalism works and has worked over the years, they’re curious but too embarrassed to ask questions for fear of appearing dumb, I decided to share my drawing and discoveries. It works quite well as a blueprint and should answer any questions you might have; questions, given the state of things, it’s probably a good idea to be asking. First I drew a stick figure and wrote owner, then I drew a square and wrote factory, then I drew a bunch of little stick figures inside the factory and wrote workers. Someone has to loan the owner money to buy the stuff for the workers to use to make a product; that would be a bank or investors. I drew two more squares and labeled them accordingly. Both bank and investors expect a return on their money, meaning they expect to make more money than the money they’ve invested, this is called profit. The owner of the company also expects to make a profit. The workers just expect to make a living wage The workers get to work making let’s say, mascara; just so you know a company that makes something is called a manufacturer. To make the mascara the workers use ingredients bought and paid for by the owner of the company with the monies from the bank and/or investors. I drew another square and wrote ingredient company and drew little workers inside. The ingredient company actually competes with other ingredient companies who also want to sell their ingredients to the mascara company. More squares, more workers. It’s a level playing field, meaning everybody has the opportunity to compete for the job and to set a competitive price for the job. The owner of the mascara company chooses the company that offers him the best service, quality, and price and promises to employ his wife’s errant nephew. The losing companies go off in search of another mascara company that might need their ingredients. The mascara workers are paid wages, also know as income, for their efforts, also known as work or a job, and their efforts begat many, many tubes of mascara. Now the product, the mascara, has to be sold to a store, which will actually sell it to the consumer; namely you and me. This is the job of the company sales force; it also has to be packaged and shipped to the store that buys it. Three more squares filled with stick workers. To determine the cost of the mascara to the retailer, that would be the store or company that is actually going to sell the mascara to the customer, namely you and me, the cost of the ingredients, the workers salaries, the cost of packaging, the cost of shipping, and factory operating costs, must be added together. Then that figure is doubled or doubled and a half, or tripled, so the owners, banks, and investors can cover the costs of manufacturing the mascara and make a profit. This figure is called the wholesale price. Then the retailers, the store where you’re going to buy the mascara, will double, or double and a half, or triple the wholesale price and come up with yet another figure, the one you’re going to pay for the mascara, which will cover their costs and make them a profit. Like the manufacturers retailers also have bank loans and investors who expect to a return on their money, to make a profit. I’m sensing a pattern here. The workers just expect to make a living wage. The people who buy the product from the retailer are, you guessed it, the workers. In order for the capitalism to work the workers have to use their wages, also called income, to buy. There can be no profit for any manufacturer, retailer, bank, owner, or investor period unless the workers are using their income to buy. This is why credit cards came into being so workers could pay for the products they were buying with money they didn’t actually have but would have further down the road. Credit cards meant more purchases; more purchases, more profit. Credit isn’t free, it has interest, meaning you pay the credit card company real money to use their fake money. Because of interest you are actually paying more money for a product than its actual price. This is how the credit card company makes a profit. Credit card companies and banks are in cahoots with each other because banks extend credit to credit card companies and the credit card companies pay them interest for the favor. Banks are institutions where workers deposit their wages in checking accounts; the banks then use that money to lend and invest and make more profit. That banks charge workers for the privilege of using their money makes no sense at all and is one of the myriad reasons I have never liked banks. Now, since the owners and retailer’s profit depends on the purchasing of product by the worker, it’s very important that the product render itself obsolete after a period of time so that it can be replaced by a new and better product(s). This is why it’s important not to build anything that actually lasts because you will either destroy or slow down your profits. This is called planned obsolescence. Planned obsolescence is behind the advertising concept that newer is better. New coke comes to mind. If you’re under fifty and don’t remember new coke you should look it up. Looking at the blueprint it is patently obvious that capitalism is a profit driven system and that every square’s survival is dependent on the survival of the other square. One person’s income, one person’s work, really is dependent on the existence of the other, which is actually kind of cool and pragmatic proof of the spiritual axiom that we are all interconnected. The other thing that is patently is the ability to compete is the key to success. Enter the Economic Expert; he takes one look at my blueprint and says, we can make way more money if we knock out three quarters of these squares and then put the rest in one big square. But then the people won’t have any work Mr. Economic Expert, I say. How will they pay the rent? How will they eat? How will they feed and clothe their families? From the beginning corporations were big fat greedy bullies, hence the name ‘fat cat.’ The late 1800’s and early 1900’s come to mind. I actually remember this from high school because it was one of those ideas that held vibration; that held suspended. What the corporations, also called monopolies or ‘trusts,’ decided to do was take over and control various industries. Let’s use the mascara factory as an example of how this works. For a corporation to take over and control an industry first they have to buy up all the factories of a particular product, in this case mascara. Once they own all the mascara factories they can set the price they want to pay for the ingredients because they’re the only ones buying the ingredients. So much for competition and a level playing field. The only mascara ingredient company that can survive is the one that accepts the price set by the corporation so all the rest of the ingredient companies go out of business. Since the price set for mascara ingredients will be quite low, in order to keep costs down and make more profit, eventually the ingredient company will either be forced into bankruptcy or have to sell the business. The mascara corporation then buys the ingredient business for next to nothing. Now they’re the only manufacturer of mascara and they own the only business, the source, that provides the ingredients. They literally pay themselves for what they buy from themselves and in so doing invest in themselves and make even more profit. Now since so many small businesses have gone out of business because of the corporate takeover of mascara production lots and lots of people who once worked for those small businesses are out of work; they apply for jobs with the corporation. Since the corporation is the only organization hiring people with mascara making skills, or skills that compliment mascara manufacturing, they can pay them whatever they want. To keep costs down and profits up the corporation pays its workers next to nothing. Now you understand why they called them ‘monopolies,’ because they monopolized every aspect of a business and in so doing destroyed all the competition and the playing field. But there’s more. Working conditions for factory workers during this time were so horrible they trump the sweatshops it’s so politically correct to rail against today. The 1911 Triangle Shirtwaist Factory fire comes to mind where the workers, all women, couldn’t escape when fire broke out because the managers had locked the doors to the stairwell and exits to keep the workers from leaving early. The factory was on the eleventh floor; the women either burned or jumped to their death. Upton Sinclair’s book, ‘The Jungle,’ held page after page of the horrors of Chicago’s stockyards. He wrote that dead rats were routinely shoveled into sausage grinding machines, inspectors looked the other way when diseased cows were slaughtered for steak, and filth and guts were swept off the floor and sold as potted ham. The American people were as horrified by corporate factory conditions as they were by the fact that the corporations, or monopolies as they were called then, were quite literally eradicating millions of jobs and small businesses. Small businesses were the backbone of American life; nothing was more representative of the American entrepreneurial spirit than small business, that’s why all of Europe was immigrating here. As for the factory conditions, it was everything America was NOT about. “Give us your tired your poor, your huddled masses yearning to be free.” Muckrakers, (todays leftys with power) like Upton Sinclair, raised the indignant hue and righteous cry and the Progressive Movement and unions were born. They were so loud, so righteous, government stepped forward and wrote new regulatory legislature that established the first health and hygiene standards for industry and regulations that broke up the monopolies. The unions guaranteed safe working conditions and a living wage for the worker. In other words the government put regulations into place to protect workers, consumers, and small business; laws that guaranteed a level playing field, meaning the ability to compete, and that we weren’t buying potted ham that was actually shit from the slaughterhouse floor mixed with a touch entrail, and unions were a tool for enforcing the regulations. Corporations have been working consistently, and with increasing sophistication, to undo the regulations ever since. Welcome to Reagans trickle down economics. The theory behind trickle down economics was this.... the more money the people on the top earned, the better it would be for the people on the bottom because the benefits of that money would trickle down. In other words more money for the rich meant more jobs for the poor; deregulation would mean even more jobs. The push for de-regulation was based/sold on the idea that without government regulation there would be more competition, more competition meant more profit, more profit meant more jobs. This is a great big lie. De-regulation did nothing for job growth; what it did was allow corporate monopolies, or whatever they’re calling themselves these days, to form all over again. You’ve seen the blue print, you know what happens when the corporation takes over; all those little squares get cancelled out, but this time there aren’t even any jobs for the people who’ve worked in the industry because those jobs have been out sourced overseas (thank you Nafta) so the corporation doesn’t have to pay the American worker the living wage he/she deserves. It’s close to impossible for me to wrap my head around the idea that there are people who are so profit driven that they don’t care how horrifically it impacts human beings or the environment and that every move these people have made since the Reagan years, culminating with Citizens United, has been carefully calculated to ensure that profit dictates government policy. Big government has been spun to stand for whiners, welfare cheats, illegal immigrants, bleeding heart liberals, and tree huggers. Small government has been spun to stand for the America of old, when an honest days work brought an honest days pay. The reality is in the American of old an honest days work did not get you an honest day’s pay until the government stepped in and established regulations to curb the profit driven greed of fat cat corporations/monopolies and the unions stepped in to guarantee the American worker a living wage and safe working conditions. For the record - I have no problem with profit; I have a real problem with profit when it grinds the planet and human beings under its heel. There is no good reason for the people to be serving, to be on their knees, to the economy, when it so obviously doesnt work for the majority of the population. The economy is man-made, it can be unmade and re-done to serve the people. This is already happening with cooperative businesses. If I’m thinking this way so are others, we are all interconnected, and that gives me hope. Live loud, love fierce, and suffer no fools. Katherine Manaan art by Robert Bubel
Posted on: Mon, 17 Mar 2014 13:23:03 +0000
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