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Friday, December 09, 2005

So Much for the Invisible Hand

by Stephen Fleischman


Why is there so little discussion, in this country, about the pros and cons of capitalism, the economic system under which we live?

There are pros, you know, as well as cons. Capitalism has given us WalMart and cheap gas, skyscrapers and Alan Greenspan. And many other things that include the necessities of life�food, clothing, shelter. So why do we so rarely chat about capitalism?

The only two things I remember from my freshman college class in economics are Adam Smith and Laissez Faire. �The Invisible Hand� still sticks in memory�how the free market regulates itself and keeps us all on a steady course.

Many years later, I heard of another big hand out there concerned with the class struggle, the profit system and surplus value.

In college, the principles of capitalism are expounded to a fare-thee-well; elsewhere people just let it be, jump on the bus and don�t discuss much. That�s too bad because, at this point in history, capitalism may be at the root of all evil.

Karl Marx, even in America, can be regarded as a relevant economist (in most of the world he is considered one of the three giants of the 19th Century, the other two being Darwin and Freud). Some people say he�s old-hat. Marx was a century younger than Adam Smith, but Smith seems to get all the attention.

In Marx�s definitive analysis of capitalism, �Das Kapital�, he allows as how, in the sweep of history, capitalism served its purpose and brought humanity to a better place. And in the sweep of history, a time would come when it would be swept off the world stage�when it no longer served the masses.

Why aren�t we discussing these sweeps of history when the insights they can give us are so vital to our interests and our survival?

Of course, Marx was examining capitalism toward the middle and end of the 19th Century. After the Civil War, capitalism was in its vibrant period. Means of production were growing by leaps and bounds. The new nation had rid itself, finally, of the shackle of slavery. Capitalism had reached the point where wage labor was more productive and profitable.

My reading of Frederick Engels, Karl�s sidekick, tells me that all things in nature, including man and his institutions, are in a state of flux. Change takes place through the clash of opposites. The conflict of opposing forces leads to growth and development. Quantitative changes lead to qualitative changes as when water heats gradually to the boiling point then quickly changes from liquid to steam, or when nations change economic (and political) systems quickly, and oft times violently, through revolution, after years of prolonged incremental change.

By the time of the new century, the 20th, that is, the Robber Barons were stepping up to the plate and taking their place in the sweep of history. Early mergers and acquisitions were beginning the process that dominated the 20th Century and led us to where we are today�Monopoly Capitalism.

We�ve learned, repeatedly, that in the process of growth, capitalism leads to Monopoly, Imperialism and War. There�s been a lot of talk, lately, about war. I�ve heard little, or none, about capitalism, monopoly or otherwise. Discussion, anyone?

I think the American people, instinctively, know where we�re at.

Everybody knows that capital enterprise must grow or die�must cut and thrust to maximize profits. Everybody knows that capitalist profits are obtained from the surplus value that labor produces�your sweat and mine. Everybody knows that the corporate monopolies own and control the mass media, just about everything you see, read and hear. Everybody knows that the corporate monopolies will fight to the death to keep you from believing what everybody knows. That�s an oxymoron. Or you could call it one of the contradictions of capitalism.

Remember those pictures, during The Great Depression of the 1930s, of farmers spilling milk while children go hungry? Or men selling apples on the streets? If you aren�t old enough to remember it, you�re seen it in the newsreels. We had a wealth of productive capacity but the people had no purchasing power. Deflation had hit historic lows. The invisible hand was out to lunch.

When the stock market crashed on October 29, 1929, high-flying traders began flying out of their office windows. By the 13th of November (when stock prices hit their lowest point), over 30 billion (in 1929 dollars) disappeared from the US economy. The greatest financial crisis in US history.

Franklin Roosevelt, through the New Deal, saved capitalism by re-distributing some of the wealth. He fought the economic royalists to a standstill and inaugurated the NRA and the WPA. Ironically, he had to save the capitalists from themselves. Instead of the invisible hand, we needed an iron fist. Strict controls and regulation of run-away capitalism, or they�d eat you out of house and home.

Originally, limited liability companies, now called "corporations" had to obtain charters from the State to do business. They are chartered to do a specific job. If they don't do the job or break the rules, their charters can be revoked. The State giveth and the State can taketh away. That's the way the system was set up in the States' constitutions. And this charter system is still in force in most states, today, but when was the last time you heard of a corporate charter being revoked?

Alas ...early in the 19th Century, when this country was young and still wet behind the ears, Congress gave corporations the status of people, with all the rights of people�freedom of speech and of the press. They could spend all the money they wanted to on advertising and propaganda, called �public relations�. They became carnivorous. The corporations soon began to eat congressmen and senators and judges and politicians of all stripes, and even presidents and nations.

So where are we at? We may well be at the threshold of another of those sweeps of history.

Bob Dylan, one of our great philosophers (and song writer) at another time of crisis in our country, said this:

Come senators, congressmen
Please heed the call
Don't stand in the doorway, Don't block up the hall
For he that gets hurt, Will be he who has stalled
There's a battle outside And it is ragin'
It'll soon shake your windows, And rattle your walls
For the times they are a-changin'.

A sleeping giant is about to wake up. Wanna talk about it?

Stephen Fleischman's career as a television writer-director-producer spans more than three decades, twenty years with ABC News, ten years with CBS News, starting in 1953. In 1959, he participated in the formation of the renowned Murrow-Friendly "CBS Reports" series. In 1983, Fleischman won the prestigious Columbia University-Dupont Television Journalism Award. In 2004, he wrote his memoir about his thirty years in Network News -" A Red in the House." For additional information, see: www.ARedintheHouse.com. Email to: stevefl@comcast.net.

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