Pre-Blog Notes
I started writing this blog post with the intent of presenting and rehashing some ideas about how to make our economy fairer to individuals, but a compulsion to define terms led to large blocks of description about capitalism and the players in our economy. I think these definitions and the ideas based on them reflect my general understanding of how things work and lead well into what is frustrating about having to engage in an economic system designed to make the wealthy a lot wealthier by the second, but I am not an expert in these matters, they are just interesting subjects to me. Criticism and correction is very welcome. I may expand this blog into something larger someday. It would be better quality if I didn't have other stuff to do and think about. I also want to say "Hello" to my increasing number of international readers, I am honored and humbled to reach people around the world with this silly blog. If any of you have questions about particular American subjects, I would do my best to answer questions in special blog posts devoted to a single issue. Just this week I've had readers from the following countries: U.S., India, Kenya, Pakistan, Egypt, U.K. Canada, Malaysia, Philippines, and Poland. It's the most fun aspect of writing this thing. Anyway, on with the show.
The Hallmarks of Capitalism
From Wikipedia, the accepted features of capitalism include "private ownership of the means of production, creation of goods or services for profit or income, the accumulation of capital, competitive markets, voluntary exchange, and wage labor."
This more or less defines the system with which we are familiar. The U.S. also has federal and local regulations that attempts to control agreed upon abuses of the above features of capitalism. The U.S. and most other places recognize the concept of the corporation as an entity that can do business with lesser liability to the individuals who control the corporation. The players in worldwide markets are governments, individuals, and collective establishments such as companies and corporations.
Financial Relationships in the Context of Capitalism and Corporate Entities
An entity is composed of one or more individuals, from a single person to the largest multinational corporation on earth or massive government agency. Relationships appear and disappear between two entities for a multitude of reasons. Each entity could have multiple relationships, and depending on the entity, perhaps millions of these relationships. A large employer for example can have as many full time employees that it desires to sustain based on its particular circumstances. An individual will typically have fewer of these relationships depending on his or her required interactions with the economy. A consumer electronics corporation may sell millions of its products to an equal number of individuals. A given individual has more or less perceived freedom regarding these choices based on many factors such as skills, self-sufficiency, cultural influences, governmental regulation, individual morality, resource ownership, and every other factor that goes into composing a complete person. A collective entity such as a corporation or government has analogous characteristics typically amplified by many orders of magnitude. The U.S. federal government for example can and does spend billions of dollars on a regular basis. Other governments and some conglomerates approach this transactional power. These are well beyond the typical transactional power of a single person.
One entity can enter into a brief or sustained financial relationship with another entity. This can be an exchange of whatever suits the two parties. This is where a person's sense of right and wrong(or lack thereof) exerts itself, and ideologies arise to address the sense of fairness to each of the parties. My own ideas of what is or isn't fair is the subject of this particular blog. Leave a comment if you agree or disagree, but above all else, please, click my ads.
Interactions between entities
It seems clear that powerful entities continuously use their power to take advantage of an entity with less power. Natural monopolistic conditions(oil shortage, food shortage, silicon shortage, etc.) or government induced monopolistic conditions (requirement to buy car insurance) or employer forced monopolistic conditions(health insurance premiums to a provider you don't like) or other reduced choice scenarios could allow the larger entity to add on large profit margins to the retail cost to the individual or smaller entity. 100% or much greater profit margins are not unheard of for some goods. A large entity may use its wealth to influence a lawmaker to promote its own agenda or bring in government business. A large entity may use law enforcement and the courts to hassle and bully individuals into submission. So being able to leverage the resources of society gives an entity an advantage when engaging in a transaction or relationship with another entity. It is rare to have the playing field level and the barriers to entry into most markets are difficult or impossible to overcome.
Race to the bottom
So what drives these impulses to engage in commerce? Our wants and needs are translated into demand if we possess something of value to trade. Our transactions are simplified through the existence of cash and credit. For most of us, our very survival depends on our ability to understand value and maintain our own cash flow and credit so that we can get what we need and want from someone else. Simple mistakes or engaging in finance with the wrong entity can mean instant ruin. An individual who ends up engaging in the economy is at the mercy of a market that cares about profits. Most corporations put that motive first and foremost. They seek to maximize their profits. Why? Usually to enrich one or a few individuals. Why? I can't speak from personal experience, but it looks like it's because being rich is more fun than struggling daily for survival.
What will a typical corporation do to maximize profits? Anything they can get away with. At a gross level, an entity's sales minus costs determines profit. Any entity may seek to continuously lower any cost associated with doing business, but corporations in particular have a giant slate of options. This includes some or all of the following: sweatshop/slave labor, cheap materials, low inventory, patent infringement, environmental destruction, bribes, kickbacks, hostile takeover, layoffs, liquidations, late payments, evaporating retirement benefits, outright fraud, tax evasion, insider trading, ignoring regulations, paying fines rather than playing by the rules, tying up the courts with endless legal wrangling. The options seem endless for a corporation to reduce cost. A consumer can reduce costs as well, but an average person does that by buying generic ibuprofen or cheap shoes or skipping meals or doing without something. So it's a little different for an individual vs. a corporation in regards to the profit motive. It can be a harrowing and crushing experience for a small entity to have a grievance with a larger entity. Movies would have you believe otherwise, often showing a little guy taking on the system and winning. These are atypical experiences. A heartless, greed-driven corporation will pound you into non-existence with soul-shattering efficiency. It happens over and over.
Environmental damage
How much damage should any entity be allowed to inflict on others interests? Is a damage then repair scenario really neutral? Is there a way to get what we want and simultaneously improve our surroundings and the lives of others? Is it really necessary to poison the air and water to increase profits? Companies dump bad stuff into rivers, lakes, and oceans and spew toxic gases into the air. Small farmers pollute the water and land of their neighbors with animal waste.
Employee damage
Workers are referred to as human capital. Less sensitive managers speak of solving a problem by putting more bodies on it. Unless it becomes inconvenient, many companies treat their workers like a piece of equipment that can be discarded when it no longer runs efficiently. Continuous threats of job losses are the main motivating tool that some companies routinely use. 40 or 50 years working as just a regular company employee in most American workplaces takes an extreme toll on an individual. How much do immortal corporations care about this situation? Not much.
Economic chaos
Financial movers and shakers thrive on volatility and market movement. They don't care about the downstream consequences of their actions. They care about making money.
Low quality
Most of the stuff that is sold today, in spite of extreme technological advances, is cheap crap. The market for goods that most people can afford in America is rancid with low quality junk. If you see something really nice in a store, chances are it is Japanese or European. And really expensive. If it is high quality and American, you still can't afford to buy it. If you want the low-quality-falling-apart-before-it-gets-home-not-quite-equivalent version, you know where to go. Corporate cost cutting has destroyed quality and American pride. Our standard of living is a mixed bag.
Love thy neighbor
How can I love my neighbor when I am engaged in an economic system where one of us is continuously getting ripped off by the other one? When unrelenting avarice drives society, societal relationships break down. Try to convince me otherwise.
Being alive
Being alive shouldn't be an awful thing, it should be a wonderful thing. It shouldn't be a wonderful thing for just a few people, it should be a wonderful thing for as many people as possible. Every child should be able to look forward to a good life, long and productive. Everyone should be able to engage in society without fear of being controlled and manipulated by a faceless corporation. Life shouldn't be an endless grind followed by a painful death. Maybe I'm naive, but I think that if we believe that we are all entitled to a wonderful life, we should find a way to start helping each other to have a wonderful life. If your prosperity depends on another person having to suffer, you are part of the problem.
What to do
Local corporate responsibility
A company can be a beacon in or a blight on a community. Companies understand the cost of doing business. If they don't, educate them. Raise your community standards. Expect better behavior of these corporations doing business in your backyard. Stand up for the workers at your local branch of the giant corporation in your community. These are your real friends and neighbors.
Insurance is apparently a necessary evil
For some choices we make, the government requires us to give money to another entity. Possible solutions: Federalize health, home and auto insurance or make these expenditures 100% tax deductible or 100% federal government controlled. Single payer health is still the best solution for solving our health care crisis. Your auto insurance cost is driven in part by your lousy credit rating. Does this make any sense? It should be driven by the costs of recovering the value of your car when it is wrecked. Outlaw this practice. If you are forced to buy something by the government, the price should be the same for everyone, regardless of economic circumstances. Sometimes a necessary evil is just plain evil. Federal standards for all insurance coverage and how it is acquired should be enacted. State and corporate control of insurance ensures(get it? I know it's terrible.) corruption and kickbacks.
Stop voting for businessmen/women
Businessmen/women should run businesses, not governments. Their instincts for profits and personal gain are typically destructive to individual liberty. When you elect a businessperson to run your town, state, or country you have opened the door to some creative awfulness. When a politician touts his or her business experience, run for the hills. Run for office yourself and spend all of the money on making the local schools better. They will eventually erect statues of you in the town square.
Support regulations that put economic abusers behind bars
The economic elite created our current financial crisis and were rewarded with bailouts. They made money before, during, and after the crisis! Elect people who have goals of going after Wall Street not coddling Wall Street. Wall Street isn't Main Street. Every move that a banker makes should make that banker wary of pending jail time. I read the other day that bundling mortgage securities is becoming an attractive investment again. The reason: there was no penalty for it the last time and it's a money-maker.
Recognize and break up monopolies and oligopolies
When one or a few corporations are dominating a market, a good old-fashioned trust busting is in order. Elect officials that enjoy dismantling and diminishing corporate power. Nothing slants the level playing field like a monopoly or oligopoly. That one store where you buy everything? That's effectively a retail monopoly, and it's bad for all of us. Big Oil? Oligopoly. Big Agriculture? Oligopoly. Big finance? Oligopoly. Big national defense? Oligopoly. Bust 'em up! It's fun and wonderfully American minded.
Other
There are many other methods that are more or less appealing, but I've got to finish this post and get on with my life. If you read this far, click my ads. Let me know if you like or hate this sort of thing, I'd love to have more feedback.
I started writing this blog post with the intent of presenting and rehashing some ideas about how to make our economy fairer to individuals, but a compulsion to define terms led to large blocks of description about capitalism and the players in our economy. I think these definitions and the ideas based on them reflect my general understanding of how things work and lead well into what is frustrating about having to engage in an economic system designed to make the wealthy a lot wealthier by the second, but I am not an expert in these matters, they are just interesting subjects to me. Criticism and correction is very welcome. I may expand this blog into something larger someday. It would be better quality if I didn't have other stuff to do and think about. I also want to say "Hello" to my increasing number of international readers, I am honored and humbled to reach people around the world with this silly blog. If any of you have questions about particular American subjects, I would do my best to answer questions in special blog posts devoted to a single issue. Just this week I've had readers from the following countries: U.S., India, Kenya, Pakistan, Egypt, U.K. Canada, Malaysia, Philippines, and Poland. It's the most fun aspect of writing this thing. Anyway, on with the show.
From Wikipedia, the accepted features of capitalism include "private ownership of the means of production, creation of goods or services for profit or income, the accumulation of capital, competitive markets, voluntary exchange, and wage labor."
This more or less defines the system with which we are familiar. The U.S. also has federal and local regulations that attempts to control agreed upon abuses of the above features of capitalism. The U.S. and most other places recognize the concept of the corporation as an entity that can do business with lesser liability to the individuals who control the corporation. The players in worldwide markets are governments, individuals, and collective establishments such as companies and corporations.
Financial Relationships in the Context of Capitalism and Corporate Entities
An entity is composed of one or more individuals, from a single person to the largest multinational corporation on earth or massive government agency. Relationships appear and disappear between two entities for a multitude of reasons. Each entity could have multiple relationships, and depending on the entity, perhaps millions of these relationships. A large employer for example can have as many full time employees that it desires to sustain based on its particular circumstances. An individual will typically have fewer of these relationships depending on his or her required interactions with the economy. A consumer electronics corporation may sell millions of its products to an equal number of individuals. A given individual has more or less perceived freedom regarding these choices based on many factors such as skills, self-sufficiency, cultural influences, governmental regulation, individual morality, resource ownership, and every other factor that goes into composing a complete person. A collective entity such as a corporation or government has analogous characteristics typically amplified by many orders of magnitude. The U.S. federal government for example can and does spend billions of dollars on a regular basis. Other governments and some conglomerates approach this transactional power. These are well beyond the typical transactional power of a single person.
One entity can enter into a brief or sustained financial relationship with another entity. This can be an exchange of whatever suits the two parties. This is where a person's sense of right and wrong(or lack thereof) exerts itself, and ideologies arise to address the sense of fairness to each of the parties. My own ideas of what is or isn't fair is the subject of this particular blog. Leave a comment if you agree or disagree, but above all else, please, click my ads.
Interactions between entities
It seems clear that powerful entities continuously use their power to take advantage of an entity with less power. Natural monopolistic conditions(oil shortage, food shortage, silicon shortage, etc.) or government induced monopolistic conditions (requirement to buy car insurance) or employer forced monopolistic conditions(health insurance premiums to a provider you don't like) or other reduced choice scenarios could allow the larger entity to add on large profit margins to the retail cost to the individual or smaller entity. 100% or much greater profit margins are not unheard of for some goods. A large entity may use its wealth to influence a lawmaker to promote its own agenda or bring in government business. A large entity may use law enforcement and the courts to hassle and bully individuals into submission. So being able to leverage the resources of society gives an entity an advantage when engaging in a transaction or relationship with another entity. It is rare to have the playing field level and the barriers to entry into most markets are difficult or impossible to overcome.
Race to the bottom
So what drives these impulses to engage in commerce? Our wants and needs are translated into demand if we possess something of value to trade. Our transactions are simplified through the existence of cash and credit. For most of us, our very survival depends on our ability to understand value and maintain our own cash flow and credit so that we can get what we need and want from someone else. Simple mistakes or engaging in finance with the wrong entity can mean instant ruin. An individual who ends up engaging in the economy is at the mercy of a market that cares about profits. Most corporations put that motive first and foremost. They seek to maximize their profits. Why? Usually to enrich one or a few individuals. Why? I can't speak from personal experience, but it looks like it's because being rich is more fun than struggling daily for survival.
What will a typical corporation do to maximize profits? Anything they can get away with. At a gross level, an entity's sales minus costs determines profit. Any entity may seek to continuously lower any cost associated with doing business, but corporations in particular have a giant slate of options. This includes some or all of the following: sweatshop/slave labor, cheap materials, low inventory, patent infringement, environmental destruction, bribes, kickbacks, hostile takeover, layoffs, liquidations, late payments, evaporating retirement benefits, outright fraud, tax evasion, insider trading, ignoring regulations, paying fines rather than playing by the rules, tying up the courts with endless legal wrangling. The options seem endless for a corporation to reduce cost. A consumer can reduce costs as well, but an average person does that by buying generic ibuprofen or cheap shoes or skipping meals or doing without something. So it's a little different for an individual vs. a corporation in regards to the profit motive. It can be a harrowing and crushing experience for a small entity to have a grievance with a larger entity. Movies would have you believe otherwise, often showing a little guy taking on the system and winning. These are atypical experiences. A heartless, greed-driven corporation will pound you into non-existence with soul-shattering efficiency. It happens over and over.
Environmental damage
How much damage should any entity be allowed to inflict on others interests? Is a damage then repair scenario really neutral? Is there a way to get what we want and simultaneously improve our surroundings and the lives of others? Is it really necessary to poison the air and water to increase profits? Companies dump bad stuff into rivers, lakes, and oceans and spew toxic gases into the air. Small farmers pollute the water and land of their neighbors with animal waste.
Employee damage
Workers are referred to as human capital. Less sensitive managers speak of solving a problem by putting more bodies on it. Unless it becomes inconvenient, many companies treat their workers like a piece of equipment that can be discarded when it no longer runs efficiently. Continuous threats of job losses are the main motivating tool that some companies routinely use. 40 or 50 years working as just a regular company employee in most American workplaces takes an extreme toll on an individual. How much do immortal corporations care about this situation? Not much.
Economic chaos
Financial movers and shakers thrive on volatility and market movement. They don't care about the downstream consequences of their actions. They care about making money.
Low quality
Most of the stuff that is sold today, in spite of extreme technological advances, is cheap crap. The market for goods that most people can afford in America is rancid with low quality junk. If you see something really nice in a store, chances are it is Japanese or European. And really expensive. If it is high quality and American, you still can't afford to buy it. If you want the low-quality-falling-apart-before-it-gets-home-not-quite-equivalent version, you know where to go. Corporate cost cutting has destroyed quality and American pride. Our standard of living is a mixed bag.
Love thy neighbor
How can I love my neighbor when I am engaged in an economic system where one of us is continuously getting ripped off by the other one? When unrelenting avarice drives society, societal relationships break down. Try to convince me otherwise.
Being alive
Being alive shouldn't be an awful thing, it should be a wonderful thing. It shouldn't be a wonderful thing for just a few people, it should be a wonderful thing for as many people as possible. Every child should be able to look forward to a good life, long and productive. Everyone should be able to engage in society without fear of being controlled and manipulated by a faceless corporation. Life shouldn't be an endless grind followed by a painful death. Maybe I'm naive, but I think that if we believe that we are all entitled to a wonderful life, we should find a way to start helping each other to have a wonderful life. If your prosperity depends on another person having to suffer, you are part of the problem.
What to do
Local corporate responsibility
A company can be a beacon in or a blight on a community. Companies understand the cost of doing business. If they don't, educate them. Raise your community standards. Expect better behavior of these corporations doing business in your backyard. Stand up for the workers at your local branch of the giant corporation in your community. These are your real friends and neighbors.
Insurance is apparently a necessary evil
For some choices we make, the government requires us to give money to another entity. Possible solutions: Federalize health, home and auto insurance or make these expenditures 100% tax deductible or 100% federal government controlled. Single payer health is still the best solution for solving our health care crisis. Your auto insurance cost is driven in part by your lousy credit rating. Does this make any sense? It should be driven by the costs of recovering the value of your car when it is wrecked. Outlaw this practice. If you are forced to buy something by the government, the price should be the same for everyone, regardless of economic circumstances. Sometimes a necessary evil is just plain evil. Federal standards for all insurance coverage and how it is acquired should be enacted. State and corporate control of insurance ensures(get it? I know it's terrible.) corruption and kickbacks.
Stop voting for businessmen/women
Businessmen/women should run businesses, not governments. Their instincts for profits and personal gain are typically destructive to individual liberty. When you elect a businessperson to run your town, state, or country you have opened the door to some creative awfulness. When a politician touts his or her business experience, run for the hills. Run for office yourself and spend all of the money on making the local schools better. They will eventually erect statues of you in the town square.
Support regulations that put economic abusers behind bars
The economic elite created our current financial crisis and were rewarded with bailouts. They made money before, during, and after the crisis! Elect people who have goals of going after Wall Street not coddling Wall Street. Wall Street isn't Main Street. Every move that a banker makes should make that banker wary of pending jail time. I read the other day that bundling mortgage securities is becoming an attractive investment again. The reason: there was no penalty for it the last time and it's a money-maker.
Recognize and break up monopolies and oligopolies
When one or a few corporations are dominating a market, a good old-fashioned trust busting is in order. Elect officials that enjoy dismantling and diminishing corporate power. Nothing slants the level playing field like a monopoly or oligopoly. That one store where you buy everything? That's effectively a retail monopoly, and it's bad for all of us. Big Oil? Oligopoly. Big Agriculture? Oligopoly. Big finance? Oligopoly. Big national defense? Oligopoly. Bust 'em up! It's fun and wonderfully American minded.
Other
There are many other methods that are more or less appealing, but I've got to finish this post and get on with my life. If you read this far, click my ads. Let me know if you like or hate this sort of thing, I'd love to have more feedback.
