Capitalism, Socialism, Social Plutocracy: An American Crisis
By John Skinner
()
About this ebook
In a time of rapid technological change and corporate strategies of offshoring, jobs are being lost in all sectors of the economy. Reports of lower unemployment mask the problem of lower labor force participation. The shrinking middle class and growing precariat has been exposed. Americans are no longer unaware of power of the elite. Other problems Americans face are a failing public education system, poor access to health care, and minority and gender inequity. At the heart of the crisis is a political economy increasingly controlled by the plutocracy, threatening democratic participation in the selection of elected officials. Through an examination of the economic, social, and political problems faced by the majority, the book offers long-term solutions.
John Skinner
John H. Skinner has a B.S. from Virginia State University, and a M.S. and Ed.D. from Columbia University. Over a career spanning more than 40 years, he has worked as a researcher, policy analyst, manager, and educator in the fields of aging and public health. He has served under the Nixon and Ford Administrations as a Regional Program Evaluator, and the Carter and Reagan Administrations as the Associate Commissioner on Aging for Research, Demonstrations, and Evaluation. He has also held positions as Research Director for the National Council on Aging, and the Executive Director of the Philadelphia Health Management Corp. He has been an Adjunct Professor in the School of Social Work, University of Pennsylvania; Visiting Professor at the University of Oklahoma School of Public Health; Visiting Professor at the University of Texas, Dallas Health Science Center; and retired after twenty years as Associate Dean of the University of South Florida College of Public Health and Director of the USF Aging Studies Ph.D. program. During his career, he authored a number of articles and delivered many papers at scientific meetings.
Read more from John Skinner
Fishing The Bucktail Rating: 4 out of 5 stars4/5Tokolosi Rating: 0 out of 5 stars0 ratingsThe Expositor's Bible: The Book of Ezekiel Rating: 0 out of 5 stars0 ratingsTen Days' Tour through the Isle of Anglesea, December, 1802 Rating: 0 out of 5 stars0 ratings
Related to Capitalism, Socialism, Social Plutocracy
Related ebooks
The Bottom Line: Unfortunate Side Effects of Capitalist Culture Rating: 0 out of 5 stars0 ratingsThe Freedom Handbook Rating: 0 out of 5 stars0 ratingsStrategies for Media Reform: International Perspectives Rating: 0 out of 5 stars0 ratingsCoup D'état In South Dakota Rating: 0 out of 5 stars0 ratingsGovernance in the New Global Disorder: Politics for a Post-Sovereign Society Rating: 3 out of 5 stars3/5Truth Commissions: Memory, Power, and Legitimacy Rating: 0 out of 5 stars0 ratingsPolitical Perversion: Rhetorical Aberration in the Time of Trumpeteering Rating: 0 out of 5 stars0 ratingsElectoral Dysfunction: A Survival Manual for American Voters Rating: 3 out of 5 stars3/5Practical Politics for Bold Women: Proven Methods to Organize and Be Heard Rating: 0 out of 5 stars0 ratingsThe Normalization of War in Israeli Discourse, 1967–2008 Rating: 0 out of 5 stars0 ratingsPersuade, Don't Preach: Restoring Civility Across the Political Divide Rating: 0 out of 5 stars0 ratingsWhat's Your Bias?: The Surprising Science of Why We Vote the Way We Do Rating: 3 out of 5 stars3/5Summary: The Motherhood Manifesto: Review and Analysis of Joan Blades and Kristin Rowe-Finkbeiner's Book Rating: 0 out of 5 stars0 ratingsThe Bullies' Predatory Footprint Rating: 0 out of 5 stars0 ratingsProblems in American Democracy Rating: 0 out of 5 stars0 ratingsBureaucratic Opposition: Challenging Abuses at the Workplace Rating: 0 out of 5 stars0 ratingsWho Leads Whom?: Presidents, Policy, and the Public Rating: 4 out of 5 stars4/5Immigration Matters: Movements, Visions, and Strategies for a Progressive Future Rating: 0 out of 5 stars0 ratingsOur Common Agenda - Report of the Secretary-General Rating: 0 out of 5 stars0 ratingsPolitical Bubbles: Financial Crises and the Failure of American Democracy Rating: 0 out of 5 stars0 ratingsThe Not-So-Special Interests: Interest Groups, Public Representation, and American Governance Rating: 0 out of 5 stars0 ratingsInalienable Rights Versus Abuse: A Commonsense Approach to Public Policy Rating: 0 out of 5 stars0 ratingsOur Political Paradox Rating: 0 out of 5 stars0 ratingsEnemies of All Humankind: Fictions of Legitimate Violence Rating: 0 out of 5 stars0 ratingsWhose Child Am I?: Unaccompanied, Undocumented Children in U.S. Immigration Custody Rating: 0 out of 5 stars0 ratingsThe Bricks before Brown: The Chinese American, Native American, and Mexican Americans' Struggle for Educational Equality Rating: 0 out of 5 stars0 ratingsLaw and the Search for Community Rating: 0 out of 5 stars0 ratingsThe Poverty of Welfare: Helping Others in the Civil Society Rating: 5 out of 5 stars5/5People Like Us: The New Wave of Candidates Knocking at Democracy’s Door Rating: 0 out of 5 stars0 ratingsOpening the Black Box Rating: 0 out of 5 stars0 ratings
Political Ideologies For You
The Madness of Crowds: Gender, Race and Identity Rating: 4 out of 5 stars4/5A People's History of the United States Rating: 4 out of 5 stars4/5Disloyal: A Memoir: The True Story of the Former Personal Attorney to President Donald J. Trump Rating: 4 out of 5 stars4/5The Parasitic Mind: How Infectious Ideas Are Killing Common Sense Rating: 4 out of 5 stars4/5Irreversible Damage: The Transgender Craze Seducing Our Daughters Rating: 3 out of 5 stars3/5The Great Reset: And the War for the World Rating: 4 out of 5 stars4/5The Quest for Cosmic Justice Rating: 5 out of 5 stars5/5Capitalism and Freedom Rating: 4 out of 5 stars4/5Freedom Is a Constant Struggle: Ferguson, Palestine, and the Foundations of a Movement Rating: 4 out of 5 stars4/5The Gulag Archipelago [Volume 1]: An Experiment in Literary Investigation Rating: 4 out of 5 stars4/5Why We're Polarized Rating: 4 out of 5 stars4/5The Girl with Seven Names: A North Korean Defector’s Story Rating: 4 out of 5 stars4/5The U.S. Constitution with The Declaration of Independence and The Articles of Confederation Rating: 5 out of 5 stars5/5While Time Remains: A North Korean Defector's Search for Freedom in America Rating: 4 out of 5 stars4/5Emergent Strategy: Shaping Change, Changing Worlds Rating: 4 out of 5 stars4/5Ship of Fools: How a Selfish Ruling Class Is Bringing America to the Brink of Revolution Rating: 4 out of 5 stars4/5Mein Kampf: English Translation of Mein Kamphf - Mein Kampt - Mein Kamphf Rating: 3 out of 5 stars3/5The Anarchist Cookbook Rating: 2 out of 5 stars2/5Blackout: How Black America Can Make Its Second Escape from the Democrat Plantation Rating: 4 out of 5 stars4/5The Communist Manifesto: Original Rating: 4 out of 5 stars4/5Elite Capture: How the Powerful Took Over Identity Politics (And Everything Else) Rating: 5 out of 5 stars5/5Speechless: Controlling Words, Controlling Minds Rating: 4 out of 5 stars4/5The Great Awakening: Defeating the Globalists and Launching the Next Great Renaissance Rating: 4 out of 5 stars4/5Unwoke: How to Defeat Cultural Marxism in America Rating: 2 out of 5 stars2/5Capitalist Realism: Is There No Alternative? Rating: 5 out of 5 stars5/5The Power Worshippers: Inside the Dangerous Rise of Religious Nationalism Rating: 4 out of 5 stars4/5The Gulag Archipelago: The Authorized Abridgement Rating: 4 out of 5 stars4/5Get Trump: The Threat to Civil Liberties, Due Process, and Our Constitutional Rule of Law Rating: 5 out of 5 stars5/525 Lies: Exposing Democrats’ Most Dangerous, Seductive, Damnable, Destructive Lies and How to Refute Them Rating: 4 out of 5 stars4/5
Reviews for Capitalism, Socialism, Social Plutocracy
0 ratings0 reviews
Book preview
Capitalism, Socialism, Social Plutocracy - John Skinner
Capitalism,
Socialism, Social Plutocracy:
An American Crisis
Copyright © 2014 John H. Skinner
Published by John H. Skinner at Smashwords
Smashword Edition, License Notes
This ebook is licensed to you only. It may not be re-sold or given away to other people. If you would like to share this book, please purchase an additional copy for each recipient. If did not purchase this book, or it was not purchased for you only, then please return to Smashwords.com or your favorite retailer and purchase your own cope. Thank you for respecting the hard work of this author.
This publication provides information that may be helpful regarding the topics covered. It is sold, however, with the explicit under-standing that nothing written within should be considered as rendering professional, financial, political, or legal advice. If advice is required it should be sought from the proper source. The author specially disclaims any liability that is incurred through the use or application of any contents of this book.
Contents
Chapter 1: Introduction
Chapter 2: Distribution of Wealth and Power
A Model of Income and Power
The U.S. Middle Class
Class and Privilege
Chapter 3: Technological Change and Jobs
The Rise of Robots and the Loss of Jobs
High Frequency Trading
Technological Threat to Employment
Technology-Here to Stay
Chapter 4: Offshoring, Outsourcing and Job Loss
Short-Term Thinking, Long-Term Effects
Bleak Future
Chapter 5: Jobs and Income Security
Low Interest Rates – A Double Edged Sword
Presidential Policies
Challenges to the Existing System
Unions
Age and Unemployment
Changing Support for Retirement
Social Security and Retirement
Other Sources of Retirement Funds
Job Tenure and Retirement
Government Intervention in the Past
Three Keys
Chapter 6: Labor Force Participation
Age and Labor Force Participation
To be Unemployed
Chpater 7: Income Inequity
Income by Quintile
..Inequitable Distribution of Income
..Income and the 1%
..The Precarious Class
..Tax Transfers and Reducing Inequality
..Poverty Among All Americans
Chapter 8: Credit and Indebtedness
..Debt and Saving
..Home Foreclosures: The Demise of the American Dream
..Middle Class Living Standard
..Consumerism
Chapter 9: Education in a Changing World
..Educational Performance
..Educational Opportunity
..Education Solutions
Chapter 10: U.S. Health System and Access
..Not Just Health Care
..Why U.S. Health Care Costs so Much
..Access to Health Care
..High Cost Prescription Drugs
..A Move Toward Universal Health Care
Chapter 11: Impacts on Minorities and Women
..The Minority Wealth Gap
..Effects of Discrimination
..Lingering Effects of Disadvantage
..Economic Pressures on the Family
..Disproportionate Criminal Justice
Chapter 12: Plutocracy and the Political Economy
..Sold to the Highest Bidder
..Undermining Social Programs
..Plutonomy
..Move to Privatize Government
..Private Contractors
..Control through Fear
..Band-Aid Approach
..Vision of Democracy
..The Need for Mass Political Action
..Obstacles to Democracy
Chapter 13:Government Subsidies to Support Capitalism
..Government Support of Business
..Other Government Interventions in the Free Market
..Free Markets are not so Free
Chapter 14: Addressing the Future
..Sharing the Wealth Held in Common
..Minimum Wage
..Rebuilding the Labor Force
..Reassessing the Role of Employment
..Saving Social Security
..Tax Reform
..Health Reform
..Political Reform
..The U.S. as a Functional Social Plutocracy
..Civil Unrest
..Creating a Positive Future
End Notes
References
Acknowledgements
About the Author
Chapter 1
Introduction
I hope we shall take warning from the example [in England] and crush its birth the aristocracy of our moneyed corporations which dare already to challenge our government to a trial by strength, and bid defiance to the laws of our country.
Thomas Jefferson (1817)
The United States has been the beacon of hope for Americans and for many other countries. It has been the hope of those seeking freedom and opportunity. It has been the hope of becoming well educated, of achieving middle class and above. The U.S. held the hope of building a career, of providing for one's family so the next generation would exceed the success and happiness of the current one. It has been the hope of equal rights, and the promise of participating in a democracy where every vote counts. Living in the U.S. fostered the hope of achieving the American Dream. However, fulfilling the Dream is becoming more and more elusive. Eaves (2007) quoted Azar Nafisi, a professor of Advanced International Studies:
The negative side of the American Dream comes when people pursue success at any cost, which in turn destroys the vision and the dream. … If you come to America in search of the dream … then you realize that many people … don't even dream anymore—how do you suppose that feels?
The U.S. was built on the principles of free enterprise in a capitalist economy. With a political system of representative democratic ideals, the U.S. became a model for many other nations. Considered the greatest economy in the world, the U.S. offers the most stable source of economic investment. The World Bank (2014) reports the U.S. Gross Domestic Product (GDP) is $16.8 trillion, followed by China at $9.240 trillion. However, looking forward, the World Bank (2014) predicts U.S. economic growth will grow only 1% in 2015, while other high-income countries are predicted to grow over 2%, and the global economy is projected to grow over 3% through 2016. China is predicted to sustain its growth at over 7%.
The U.S., as the only country involved in WWII that did not experience production and infrastructure disruption, became the world leader in many areas.
This has changed. Jones (2005) summarized:
Yet over time Europe and Japan closed the technological productivity gap with the United States. The emergence of a U.S. deficit on its balance of trade in the 1960s, and the devaluation of the U.S. dollar and the end of its convertibility into gold in 1971, provided symbolic signs of the ending of an era.
With a free enterprise system and creative innovation, it seems the U.S. should retain its leadership. New and more expansive ways of using computer technology in banking and finance created investment booms. Technological developments and growth bolstered the economy. The promotion of credit debt enabled individuals to purchase now and pay later. The creation of free trade agreements and the use of offshore production and services have facilitated greater corporate profits.
These successes have had unpredicted and far-reaching side-effects that have disrupted the social and economic fabric of the country. Samuelson (2013) described how airlines and interstate highways had a deleterious impact on railroads in the twenty-five years between 1945 and 1970. He also describes how air conditioning led to the migration of factories and businesses from the Northeast to the South. Additionally, superstores replaced small neighborhood markets. Buses with internal combustion engines took the place of electrified trollies in most cities. The U.S. moved from an industrial economy to a service economy, and from a manufacturing society to a technological information society.
There is evidence that the middle class is shrinking and the American Dream is vanishing. The economy is being reshaped by extant developments and the consequences of those developments. The future of the U.S. is being impacted by several major factors:
Technological changes and jobs
Offshoring of manufacturing and services
Income inequities
Employment opportunities
Effects of unemployment
Credit and indebtedness
Education
Health care
Minority and gender inequities
Plutocracy and the economy
Threats to democracy
Government support of capitalism
The following chapters examine how these major forces are influencing the American Dream. The final chapters offer long term solutions. As George Bernard Shaw (1901) wrote, The worst sin towards our fellow creatures is not to hate them, but to be indifferent to them: that's the essence of humanity.
Chapter 2
Distribution of Wealth and Power
Capitalism has destroyed our belief in any effective power but that of self-interest backed by force.
George Bernard Shaw (n.d.)
The Great Recession of 2008 illustrates a shortcoming of U.S. capitalism. In hindsight, experts blame the recession on a complex mixture of fiscal conditions and policies including the sub-prime mortgage crisis, high-risk lending and borrowing practices begun in the early 2000s, the imbalance in international trade, government fiscal policy, income disparity, and the housing crisis. Fair trade agreements led to offshoring and outsourcing strategies that helped the corporate bottom lines of international corporations while costing jobs. Negative savings schemes allowed consumers to use credit to purchase products and services that could not be purchased otherwise, continue to make payments after the products were no longer relevant. The recession resulted in mortgage foreclosures and job losses. Luhby (2013) reports:
Mid-wage occupations such as office managers and truck drivers accounted for 60% of the job losses during the recession, but only 22% of the gains during the recovery, according to a National Employment Law Project analysis of Labor Department data. Low-wage positions, on the other hand soared 58%. … Uncertainty and insecurity are weighing down the middle class, even those who haven't had a break in employment. More than 40% of those surveyed in a recent Rutgers University study said they were very concerned
about job security.
A Model of Income and Power
An examination of the current performance of the free enterprise capitalist system reveals that higher income tends to flow to the few households at the top, while less income flows to the greater number of households at the bottom. Figure 1 is a symbolic representation of this phenomenon. This chart shows that as income increases, the proportion of the population decreases. The highest amount of income is distributed among the smallest proportion of the population. The largest proportion of the population is found at the lower level of income. In between is the middle class, the major engine of production and consumption.
Figure 1
Symbolic Representation of the Income Distribution in the U.S.
Historically, a healthy middle class equaled a healthy economy; as the middle class went, so went the economy. Capitalism rewards a minority who make enormous amounts of income dependent on the large majority who, through their participation in the economy, enable that concentration of wealth. However, when the concentration of wealth at the top does not include a concurrent growth at the lower levels, the perception of fairness is lost. Makers cannot be successful without a large population of consumers of their products or services. The lower income levels of the population do not benefit from the growth of the economy, yet those at the highest levels benefit greatly.
Figure 1 also has an analogous interpretation: as income increases with an associated smaller population, so does political power – the minority in the upper income bracket (ten percent and fewer) holds the political power, leaving the lower income groups (the 90%) with less political power. Thomas Jefferson (1825) warned, The end of democracy ... will occur when government falls into the hands of lending institutions and moneyed corporations.
The U.S. Middle Class
In the past, the U.S. economy has been successful in protecting the ten percent hegemony by maintaining a relatively large middle class. The middle class has served as a buffer for the upper-class ten percent of the population. As long as there was a relatively large middle class, public attention was diverted from the economic gains of the upper tenth. The majority of Americans strived to achieve middle class, and hopefully to even become upper-middle class. The success of the very wealthy served as a point of aspiration for the middle and lower classes. The hope of achieving economic success and upward mobility fueled the American Dream. At the same time, those at the top diverted attention away from themselves by promoting disparaging opinions about the poor and near-poor.
The U.S. population has historically considered itself middle class. The ethos of the 20th century was to build a strong middle class with a lower class aspiring to become middle class. The perception of the American Dream has been an affective illusion that stabilized the population. As long as the majority of the population perceived itself as middle class or at least aspired to be middle class, the upper-class could feel secure. Young (2013) reported:
Americans living in middle class neighborhoods in the 117 largest metropolitan areas have declined in numbers. In 1970, they comprised 65% of the population; now, it's 44%. Over those 43 years, Americans living in the poor neighborhoods grew from 15% of residents to 30%, while Americans living in the rich neighborhoods (increasingly exurbs) grew from 7% to 14%.
While no single definition of the middle class exists, one approach is to consider those with household incomes at or around the median. The following figure uses those household incomes that are within 50% of the median income. Figure 2 shows the middle class comprised 50.3% of household incomes in 1970. Since then, there
Figure 2
Decline of Size of Middle Class 1970-2010
Year
has been a continuing contraction of the middle class: 47.3% in the 1980, 45.6 % in 1990, 44.2% in 2000, and 42.2% in 2010, for a total decline of 8.1% over the last forty years. This decline in the number of the middle class households occurred while the incomes of the highest income households (five percent of households) continued to grow.
Horn (2013) offers another definition of the term middle class:
Economists often start with the middle 20% of the country – people between $39,000 and $63,000 a year – and work their way out. Some then stretch the definition to include the middle 60%, which has an income range of $20,000 to $102,000. Because that's a wide range, other factors come into play: home ownership, savings, a college education.
For many citizens, the middle class is more than just income level. It represents a standard of living: home ownership in a nice neighborhood with good schools, a career
rather than a job,
and advanced education opportunities. As the U.S. is increasingly a technological and service economy, education remains essential to growing the middle class.
Rohe and Watson (2007) examined the importance of land ownership and the right to vote as early as the 18th century. They state home ownership has long been central to participating in the American Dream. As early as the birth of the nation through the nineteenth-century the right to vote was based on land ownership. Levin (2013) expounds:
Today, more Americans dream not of affluence, but of basic financial stability. That's what both retirement and freedom from debt have in common. When Americans dream of retirement and freedom from debt, they dream of being able to exhale. Homeownership is a little different. Rohe and Watson frame it as an aspirational component of American citizenship. Others believe that you haven't really made it
until you own a home. However, the failure to own a home is generally not a source of stress in the same way drowning in debt and the inability to retire are.
The number of Americans living in poverty has also increased. HartLandsberg (2014) summarized annual data from The Annie E. Casey Foundation on the status of American children ages 18 and under. In 2012, 23% lived in poverty, up from 19% in 2009. Thirty percent of all children lived in households where no one had full-time, year-round employment. He summarized a Los Angeles Times study of the Federal Reserve: four out of 10 American households were straining financially five years after the Great Recession of 2008 – many struggling with tight credit, education debt and retirement issues.
Class and Privilege
Historically the upper class has used the middle and lower classes as cannon fodder to fight for causes primarily benefiting the rich. Zinn (1999, p. 60) wrote that in the years leading up to the American Revolution the lower classes were manipulated into aiding the causes of the rich. The educated and landed gentry needed to do something to persuade the lower orders to join the revolutionary cause. It was necessary to shift anger toward England, away from the educated gentry. The elite ruling class was made more secure from internal problems through war. In the days prior to the hostilities with England, there had been considerable disruptions, riots, and insurrections among the lower class colonists, white indentured servants, and free Negroes directed against the colonial landholding rich. Class privilege in the colonies was well-entrenched. For example, in Boston, Philadelphia, and New York, court records show that a small minority controlled almost half the taxable assets in the cities.
Zinn (1999, p. 90) wrote of Charles Beard, a historian who published a controversial book in 1935, exposing the