Saturday, August 8, 2009


I just watched Capitalism Hits the Fan, and want to check something with the fine thinkers who hang around my journal. Yes, you. Yes. You.

So let me get this straight. From the start of the twentieth century up until the mid-seventies, America had an increase in earnings and quality of life every decade (and if you don't believe it, ask yourself why our measure of success is to have children who "have more" than we ourselves did). Okay, fine. Then in the mid-seventies, that stopped.

Well, that sucks. Then again, you have computers reducing the demand for workers along with immigration and working women increasing the supply (though oddly, we hear conservatives griping more about POC "stealing" their jobs than white women). So of course wages stop going up. That really does suck.

So people work harder to get that increase in earnings. Increase the hours, increase the earnings, and as individuals we strive to have in our own lives what the system is no longer producing--wage increases. People were desperate to consume more goods because we're taught that this is how we demonstrate our value as hardworking patriotic Americans. I can buy a nice car. I can own land. I can afford health insurance. I can afford a dog. I am a successful person.

Unfortunately, working more hours brings with it more expenses. Adding another worker to the household adds more expenses. Suddenly the correlation of more hours to more earnings is getting fuzzier because suddenly people need uniforms and transportation and meals out and holy shit this is getting expensive. But people want to consume more, so even if the "more hours" strategy doesn't work, people find another way.

They start borrowing. Because god damn it, we are worthwhile human beings and we can own a car and we can live in a house and have health care, because the implications of not having those things in America are terrible. The implications of not having those things in America are that you're a lazy freeloading underachieving leech on your fellow countrymen, and how dare you sully our prosperity with your self-imposed misery.

People don't want to deal with those perceptions from others, or with the self-hate that those internalized standards cause. So they borrow money so that they can have the same things without actually having to make more. People used their houses as collateral, relying on their mortgage's value to sustain their consumption. Then credit cards came along, and man! You can borrow without collateral? You can just HAVE the money?

(Sure there's that whole 18% interest rate thing, but that's a whole year away and who cares about that. Bobbie Sue and Billy RichAss need new cars.)

So it starts to suck, being a consumer. Being a business, though... well, if you're an employer, it sucks a lot less. American workers were more productive. Working more hours, working harder to keep their jobs, and you can pay them the same thing every year even though they're producing more! Shit, that's fantastic for businesses! The gap between what they produce and what they are paid is getting wider.

Mmmm, profit.

Then they put their money in the bank, and then the banks said WTF ALL THIS MONEY!! So now the banks have lots of money. Corps and banks discovered that they could use this money to make loans to the employees. "The way employees could raise their consumption was to borrow the money that their frozen wages made possible to their employers," as the economist in the film described it.

Employers didn't raise wages and pay their workers more. They LEND them the money! And then they have to pay it back WITH INTEREST. More profit!

So yeah. A good time to be an employer. You know all those great bloody huge salaries CEOs are getting? That's money that they made by fucking over workers, which should surprise no one even if the precise mechanism is up for debate.

So that's the first section that I'd like to get some feedback on. That's the "how we got fucked" section. The "how best to unfuck ourselves" section is separate, and I'm also still chewing on it.

He claims that advocates for regulation and deregulation are both missing the point. The point is not that regulations aren't the right thing to impose. The problem is that imposing them right now is asinine. Those regulations constrain what companies can do. However, if we pass regulations while leaving in place these corporate boards that exist to undermine them... we've left in place "the absolute sworn enemy of the regulations." Not just people who want them gone, but the people into whose hands all that extra money falls. They have every incentive to undo those regulations, and all the resources imaginable to undo them.

As he described and as we discussed afterward, if we're going to deal with this problem, we "need to face the conflictual relationship between the people who run corporations and the people who work in them." That's why debt was substituted for rising wages, jobs moved and destroyed, and regulations just "objects to be undone."

He says that this is the change that needs to be made: People who work in a business should run the business, not shareholders funding a board. Then the workers can pair with the government and make sure regulations are followed, as opposed to leaving people in charge who've got an incentive and lots of money to undermine regulations.

There is some merit to the observation that, if we define democracy as "the people affected by a decision should be the ones to make it," that's great in politics, but why aren't we applying it to businesses? Why are businesses set up like military regiments with power flowing all one direction, when people are allegedly being taught that individuals have the power to determine their lives and all that shit?

This guy's point is that the people who are pushing for or against regulation as a solution are MISSING the problem. The problem is that what we're doing is a feature of capitalism and not a bug. It has to end like this, because this is what it works toward.

How the hell do we work toward that kind of collective business, though? I get that it's an awesome goal, and that we should call it what it is--a Marxist (Is it Marxist?) way of letting workers control production--but how do we make it happen? I'm all cognitively dissonant! Tell me how to fix it! D:

I'm lucky in working for CAC that we do things more collectively and in a more egalitarian way, but I have no idea how to spread this shit (other than giving people the idea that they deserve this, and should expect it). This is just me regurgitating everything I just chewed and swallowed. If any of you sense bullshit and would like to deflate my little bubble of militant leftism or something, please do. I feel like I'm due. If you don't sense bullshit and instead have some insight as to how we can practically realize this... comment? Please?

I'm still chewing. I'm looking for feedback if anyone has it.


Anonymous said...

This reminds me of my Corporations professor, except that he would have said that the problem is not capitalism per se but rather corporate law.

For example, corporate law explicitly exhorts management to prioritize shareholder wealth (that is, profits) over worker rights - see, e.g., Dodge v. Ford. While this rule has no real teeth, it does provide management with a sense of legitimacy when making decisions most outsiders would consider immoral.

In addition, a lot of our problems with subversion/alteration of regulations would be far less severe if corporations didn't have first amendment rights. Managers don't generally devote their own (already considerable) financial resources to subverting or altering regulations, they generally use that of their corporations (which is totally allowed - after all, increasing profits primarily furthers shareholders' interests - CEOs are merely -also- interested as a result of their bonus structures). Corporate wealth vastly outstrips that of human beings in the United States, making regulatory bodies and citizens' groups no match for it (even when they WOULD be a match for extremely wealthy individuals). It's hardly inevitable that corporations should have the same lobbying/political donation/free speech rights as individuals, since corporations as we know them didn't even exist at the time the Bill of Rights was written, and the corporations that -did- exist at the time had almost no legal rights at all (often, state legislatures had to vote in special conferences just to bring a corporation into being, and legislatures could often revoke corporate charters almost at whim).

Cobalt said...

Thank you so much for that context, and for giving me something else to chew on.