How to Fix American Society

Socio-Economic Manifesto

Forward

This is not an all knowing manifesto, I am sure there are major flaws and inaccuracies in my arguments, but overall I think my major points are valid. I do have sources to back up many statistics and facts that I quote. I also understand there are two sides to every story and no simple problems or solutions, I would ask you to understand that these topics are highly politicized and one must be able to see though the political rhetoric and fundamentally flawed free market ideals that are so often used to manipulate public opinion, sometimes one needs to think outside the box.

Introduction

I wrote this ‘Manifesto’ because I think it is important to not just complain and criticize, one must also offer up alternatives/solutions to various problems and injustice one sees in life, otherwise your arguments can easily be brushed aside. Now I’m obviously not expecting everyone to agree with me and I’m not offering a detailed blueprint of how our economy should operate. I’m simply bringing a few relevant points to the fore and backing them up with sources and statistics. To really appreciate what I’m arguing about here one must have done some prior reading and come to a series of conclusions on ones own. One conclusion that I have come to is that extraordinary measures are necessary to fix extraordinary problems, and currently these solutions are politically impossible. My most significant argument for bettering our economic system is: the corporatist war on the middle class, in which the middle class is getting smaller every year and the gap in income is growing greater everyday between the poor and the rich, the rich are getting exponentially richer while the middle class is becoming poor and the poor are becoming poorer still, if one believes this then it inevitably leads one to believe that America is headed for very turbulent times and possibly third world status in the future. The civil angst and economic turmoil that is blanketing our nation at the moment is going to pale in comparison to what the future holds if we allow the current course of neocorporatism to keep gaining momentum, it will likely, only get worse as time goes on. I want to note now that this is not an argument for fundamental socialism but an argument to make our current economy more efficient and to restore the imbalance of power from the elite corporations back into the hands of the people.

“The Real Issues: a Wisconsin Update”, by George Lakoff

“…the top 1% of Americans have more financial assets then the bottom 95% -- a staggering disproportion of wealth. The wealthy have, to a large extent, amassed that wealth through indirect contributions to them by our government – our government builds the roads they use, funds schools that train their workers, subsidize their energy costs, do research they capitalize on, subsidize their access to natural resources, promote trade for them, and on and on.”

“Meanwhile, over the past three decades, while corporations and their investors have grown immensely richer on the public largesse, middle class workers have had no substantive wage increases, leaving them poorer and poorer. Those immensely wealthy corporations and individuals, through political contributions, have managed to rig our politics so that they pay back only an inadequate amount into the system that has enabled them to become wealthy.”

Part I
What is Socialism? Social Democracy? And Welfare Capitalism?

The definition of socialism is: a theory or system of social organization that advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole. By this definition I am not an advocate of socialism, in that I disagree that all means of production and distribution of capital, land, industry etc., should be run by the state, because that would instantly lead to fascism, which history plainly shows. Capitalism and the free market do obviously have a very firm place in our socio-economic environment, I do not believe that fundamental socialism is the best way to run an economy.

I renounced my beliefs about social democracy after I came about the term ‘welfare capitalist’ and I ignorantly jumped to the conclusion that this term better suited my beliefs. After doing some research I have found that I was half correct. Welfare capitalism is a broad term and has three different ‘worlds’ (which happens to encompass all developed successful 1st world countries), as defined by Esping-Andersens book, “The Three Worlds of Welfare Capitalism (1990)”. Firstly (on the left), you have the social democratic dimension (or progressive liberalism aka universalist) of which the Scandinavian countries fall under: Norway, Sweden, Finland, Denmark and the Netherlands and to a degree the UK. Secondly (in the middle), you have the Liberal dimension (aka residual) which includes countries such as; USA, Canada, Australia, Switzerland, and to a degree the UK. And thirdly the Conservative dimension (aka Social insurance), which includes: Belgium, Germany, France, Austria, Italy and Japan.

“Varieties of Welfare Capitalism”, by Alexander Hicks and Lane Kenworthy, which is the most recent scholarly study of the subject, prefers to unite these worlds into a sphere of welfare capitalism, whereby the progressive liberalism (social democracy) and liberal dimensions are united and instead described as two poles of a single dimension. The positive pole being progressive liberalism (social democracy), the negative pole being traditional conservatism.

To clarify I will quote, “Varieties of Welfare Capitalism”, a socio-economic review, by Alexander Hicks and Lane Kenworthy – Department of Sociology, Emory University, Atlanta, USA. Published by Oxford University Press for the Advancement of Socio-Economics 2003 (http://www.u.arizona.edu/~ikenwor/ser2003.pdf):

“The social democratic world comprises the five nations whose social insurance programs are most universalistic in coverage and homogenous in benefit level. The liberal world includes the five countries most marked by means testing and by private (as opposed to public) health and retirement insurance. The conservative world is constituted by the five nations with the highest scores on a dimension tapping the degree to which social insurance programs are differentiated by occupational and public-private status group distinctions.”

“The social democratic pole is characterized by extensive, universal and homogenous benefits, active labor market policy, government employment and gender-egalitarian family policies.”

“The traditional conservative pole is characterized by occupational and status based differentiations of social insurance programs and specialized income security programs for civil servants, but also generous and long lasting unemployment benefits, reliance on employer heavy social insurance tax burdens and extensions of union collective bargaining coverage.”

So in the welfare capitalist sphere, I am a social democrat, and to clarify I will define what a social democrat is using Wikipedia, of which I largely subscribe to:

“Social democracy is a political ideology to the left of the traditional political spectrum. The contemporary social democratic movement seeks to reform capitalism to align it with the ethical ideals of social justice while maintaining the capitalist mode of production, as opposed to creating an alternative socialist economic system. Practical modern social democratic policies include the promotion of a welfare state, and the creation of economic democracy as a means to secure workers rights.”

“Since the rise in popularity of the New Right and neoliberalism, a number of prominent social democratic parties have abandoned the goal of the gradual evolution of capitalism to socialism and instead support ‘welfare state capitalism’. Social democracy as such has arisen as a distinct ideology from democratic socialism.”

“The Socialist International (SI) is the main international organization of social democratic and moderate socialist parties. It affirms the following principles: first, freedom-not only individual liberties, but also freedom from discrimination and freedom from dependence on either the owners of the means of production or the holders of abusive political power; second, equality and social justice-not only before the law but also economic and socio-cultural equality as well, and equal opportunities for all including those with physical, mental, or social disabilities; and, thirdly, solidarity-unity and a sense of compassion for the victims of injustice and inequality.”

“Varieties of Welfare Capitalism”, concludes:

“Progressive liberalism (social democracy) seems to progressively redistribute income and reduce poverty. It is also associated with greater gender equality in the labor market, whether measured as womens share of earnings or of the labor force. And it has no adverse impact on employment performance. The principle consequence of traditional conservatism appears to be weakened employment performance. Much of the recent critique of the welfare state has centered on its purported job-reducing effects (e.g. Lindbeck, 1986; Siebert,1997). Our findings suggest that this type of critique may be accurate to the extent that it focuses on what we termed ‘state laborism’, less union strength or neocorporatist integration of union confederations into state policy making than relatively passive (insurance-centered) employment policy, government labour market regulation and labour unionism by state proxy. In other words, it may not be activism in a social democratic vein but in a conservative vein that saps employment and job creation.”

Part II
What kind of economy does America have?

The first country I started to compare to the US, which I assumed was socialist, was Norway, but Norway is not socialist (and neither is any other 1st world country, in fact the only socialist country that exists as far as I know is Cuba, sure there are Socialist parties in governments around the world but that does not mean the country/government/economy itself is socialist). Norway’s economy is in fact an economy based on ‘welfare capitalism’, albeit in the social democratic sphere, which according to the CIA World Factbook is: “an economy which is based on the free market and government intervention in key areas”. In Norway’s case the state controls a mixed array of industries including; petroleum and energy, trade, education, culture, marketing, transport, manufacturing, agriculture, food etc… Norway has the largest oil company in the world, Statoil, which is run by the state, operates in one of the most environmentally challenging parts of the world and has the best safety and environmental record in the world, it also operates internationally and is able to compete very successfully with many privately owned (publicly subsidized) companies around the world. As a result it uses the profits responsibly, drills responsibly, consumes responsibly, and places appropriate taxes on the oil and gas to accurately reflect the cost of discovery/extraction/and production of the final product. Norway foresees the coming decline of gas and oil reserves and therefore saves nearly all state revenue from the petroleum sector in a sovereign wealth fund for the coming proverbial rainy day. It affords its social funding through taxes, not via the petroleum industry as most skeptics assume.

America already is a ‘welfare capitalist’ state, as is every other developed industrial country in the modern world today: every single industrial country in the world has a massive state sector. The GOA (Government of America) massively intervenes in key areas of our economy, which also happen to be the internationally competitive parts of our economy: agriculture, high technology, energy, pharmaceuticals and since 2008/2009 (some would argue much earlier) the financial industry, all of these industries are heavily subsidized by the GOA.

American agriculture is able to compete internationally because the state purchases the excess products and stores them, and subsidizes the energy inputs and so on. The GOA pays around $20 Billion a year in direct cash subsidies to “farmers” in the USA. For every dollar earned by “farmers” in the USA (approximately) the GOA provided .67 cents! Total aid in 2009 for “farmers” was around $180 Billion USD, not to mention the indirect subsidies which also contribute billions in savings. When I say “farmer” what I mean is corporate agricultural mass producers. In fact the GOA is actively supporting the dissolution of the small and medium sized farmers in America and abroad, many small time farmers are actually paid to not farm, so as to move all the power and production of food into the hands of a small and elite group of corporations, but that is another story. One should also consider the unbelievably huge subsidies given to the ethanol industry, which are given direct financial handouts and are the beneficiary of generous federal legislation which forces oil companies to include 10% ethanol in the gasoline sold to motorists.

High technology research and development is capital intensive and its not directly profitable, therefore the taxpayer pays for it. In the United States that’s done largely through the Pentagon, which includes N.A.S.A. and the Department of Energy (which also produces nuclear weapons). IBM, Lockheed Martin, Northrup Grumman, Boeing, BAE, etc., will not pay the costs of research and development, they want the taxpayer to pay for it by funding a NASA program or the next generation of fighter jets or commercial airliners. If they can’t sell everything that comes of this research and development to the public they'll still get the taxpayer to buy it in the form of a missile launching system or whatever. If they make a profit that’s great but the really important thing for Boeing is to keep the taxpayer subsidies rolling in, and that is the way the Pentagon has been funding these private corporations research and development for the last 70 years.

David F. Noble, Forces of Production: A Social History of Industrial Automation, New York: Knopf, 1984. An excerpt (pp. 5, 7-8):
Between 1945 and 1968, the Department of Defense industrial system had supplied $44 billion of goods and services, exceeding the combined net sales of General Motors, General Electric, Du Pont, and U.S. Steel. . . . By 1964, 90 percent of the research and development for the aircraft industry was being underwritten by the government, particularly the Air Force . . . . In 1964, two-thirds of the research and development costs in the electrical equipment industry (e.g., those of G.E., Westinghouse, R.C.A., Raytheon, A.T.&T., Philco, I.B.M., Sperry Rand) were still paid for by the government.

This trend has not stopped.

For example, in the 1950’s computers were being developed by our government and they were not good enough to be marketable to the public, so the taxpayer paid 100% of the research and development, which happened to be through the Pentagon (which, in fact, is also true of 85% of electronics in general). So in the 1960’s computers began to be marketable and they were handed over to the private corporations who began to sell them to the public and reap the profits for themselves, yet they were still being subsidized by the taxpayer by about 50% in the 1960’s. In the 1980’s the Pentagon was building these new “5th generation” computers and sophisticated software, which was extremely expensive, so the taxpayers again paid 100% of that bill. How could the GOA get away with that? Our government could get away with it because it was all funded under the guise of S.D.I. (Strategic Defense Initiative) aka Star Wars, of which its purpose was to protect us from Russian nukes, but conveniently much of the technology was very useful - read profitable - in the civilian sector, all of that was just handed over to the private corporations to make a killing off of. One may deduce that Star Wars was just a cover for what was really going on, of course President Reagan may not have thought so but anybody who had common sense knew that S.D.I. was a means for massive state subsidies for the high tech industry, this nonsense about shooting nukes out of space with lasers was just a way to get the public to go along.

Here are a couple sources which back up the claims mentioned above:

"Will star wars reward or retard science?," Economist (London), September 7, 1985, p. 93.

Andrew Pollack, "America's Answer to Japan's MITI," New York Times, March 5, 1989, section 3, p. 1.

Winfried Ruigrock and Rob Van Tulder, The Logic of International Restructuring, New York: Routledge, 1995. An excerpt (pp. 220-221).

The pharmaceutical industry is subsidized through public science funding. Medical students and biochemists in American universities are doing all the hard work for Pfizer and Merck Pharmaceuticals. They also receive huge tax breaks and are given legal loopholes which allow them to keep sometimes harmful drugs on the market, also drugs can be sold without FDA approval which is ludicrous, and the USA is the only country in the world where drugs are allowed to be advertised on TV commercials. Now Obama is brazenly upsetting free market idealists and setting up a government run drug research and development center called; National Center for Advancing Translational Sciences. http://www.expertbriefings.com/news/federal-government-to-assist-pharmaceutical-developments/ . It is unclear how/if this center is going to profit from the R and D, this kind of thing is hard to find in the daily news but will be very interesting to keep an eye on.

We subsidize the oil companies by: drastically reduced corporate income taxes, lower than average sales taxes on gasoline, government funding of programs that primarily benefit the oil industry and motorists, and "hidden" environmental costs caused by motor vehicles, namely air, water, and noise pollution.
“Union of Concerned Scientists” http://www.ucsusa.org:
“Direct subsidies include government-funded energy research and development. Indirect subsidies include the Strategic Petroleum Reserve, military expenditures related to the Persian Gulf, and police and fire protection related to highway use.”
“Government directly subsidizes oil consumption through preferential treatment in tax codes. A multitude of federal corporate income tax credits and deductions results in an effective income tax rate of 11% for the oil industry, compared to the non-oil industry average of 18%. If the oil industry paid the industrywide average tax rate (including oil) of 17%, they would have paid an additional $2.0 billion in 1991. Our results are consistent with a report by the Alliance to Save Energy that estimated the benefits of individual federal corporate income tax provisions. Their results showed that in 1989 preferential treatment yielded $1.8 billion to $4.6 billion in individual income tax benefits to the oil industry (Koplow, 1993).”
“At the state and local levels, sales taxes for general revenues on petroleum products are lower than the average sales tax rates, and consequently, motorists underpay for general government services. (Sales taxes are charges on petroleum products above user fees [highway fuel taxes, tolls, and fees earmarked for infrastructure and services] that are used for general revenues.) Another study by the Alliance to Save Energy found that state and local governments taxed gasoline at about half the rate as other goods -- approximately 3% versus 6% (Loper, 1994) -- resulting in an estimated $2.7 billion revenue loss from gasoline sales alone in 1991. When home, industry, and office petroleum products are included, the total state and local revenue loss sums to $4.1 billion.”

All of the above are forms of welfare for privately owned corporations and wealthy individuals; welfare for the wealthy in America has been growing rapidly over the years. Social spending has been steadily declining. I think it is essential for a successful socio-economic environment that the state does provide ample social programs and benefits for the needy. And as you all know America does have welfare programs and funding for the needy, although it can, in certain cases, be ineffective or seriously flawed and is in many cases currently under threat from being defunded and most importantly there is little progressive movement forward. The point is that every single developed first world country is a welfare state, the question is how effective the welfare is and who does it mostly go to, the rich who don’t need it, or the poor and highly disadvantaged.

Part III
Alternatives?

Let me be clear, I am not saying we should stop subsidizing industry, if we did our economy would collapse tomorrow, food and energy prices (which means prices for everything) would skyrocket and chaos would envelope the country. Recently Bolivia stopped all subsidies for oil and gas and the country immediately went into chaos and the subsidies were repealed five days later: http://uicifd.blogspot.com/2011/03/bolivian-oil-prices-have-uncertain.html . My argument is that we should be more open and honest about the fact that our economy is a welfare capitalist system, in not doing so we are promoting gross inefficiencies. We should embrace it, it is a good idea and it does work. I feel at the moment the taxpayer is getting a very raw deal, if we nationalize some sectors of high tech industry or create partnerships with private corporations then the taxpayer can reap some of the profits, along with the CEO of IBM. The same goes for the oil industry; we should try and emulate Norway’s Statoil and reinvest the profits into our own country, I do not believe that corporations have a right to own natural resources which are limited and vitally important to the survival and prosperity of the human race. We have enormous gas reserves, larger then Saudi Arabia’s, which have recently been discovered. Surely the population has a right to ownership of these limited natural resources that lie miles below the earth’s surface and we should therefore benefit from their exploitation. You all know how I feel about the few and powerful multinational corporations that so heavily influence our legislative system, politics, regulation etc., and in my opinion are the reason that the middle class in America is disappearing at an alarming rate. If we nationalized or at least had more open, transparent, cost effective, state intervention in these industries it would eliminate the corporatist problem and the regulatory problem, or at least much of it and if it didn’t we would only have ourselves to blame.

Japans economy is very similar to ours except for one major difference, instead of coordinating their economy through the military industrial complex like we do in the USA, Japan has M.I.T.I (Ministry of International Trade and Industry). Government officials sit down with big corporations, conglomerates and financial executives and basically plan the future, they try to figure how much consumption there’s going to be, what’s going to be consumed, how much investment there’s going to be, where the investment will take place etc. This is much more of an efficient way of subsidizing and coordinating the economy then just having to rely strictly on private interests and whims. Star Wars was a way for the Pentagon to develop the next generation of lasers, computers and software. Whilst S.D.I. was happening in America, Japan was developing the exact same sort of lasers, computers and software through M.I.T.I., only that M.I.T.I. was developing these products with state subsidies with the intention of the final products being sold to the civilian market. With S.D.I., the Pentagon was developing them for defense reasons (like lasers to shoot down missiles) with the thought that any kind of spin offs that might be marketable to the public would just be a bonus. Well that is much more of an inefficient way of trying to develop products and technology for the consumer market, and that is why Japan is able to compete so fiercely with the U.S. in the high tech industry despite the significantly inauspicious state of its economy in the time frame of “Star Wars”. I think the US should try and duplicate what Japan is doing with M.I.T.I.: increase the efficiencies of our subsidized industries.

Take the oil industry for example. ExxonMobil, apart from taking care of the financing and management side of things does not really do much else. When Exxon suspects that there is oil and gas to be found at an offshore site they subcontract out a geographical survey vessel to come out and do the survey for them, if a promising reserve is found, then Exxon subcontracts the work of installing a wellhead and blow out preventer to the companies that specialize in that operation, then they subcontract out the drilling operations to a company like Transocean to come in and drill for the oil, once oil is flowing to that wellhead Exxon subcontracts out the work to a pipe-laying company to come in and lay pipeline and umbilicals to connect all the plumbing and power supplies that’s needed, now that everything is up and running Exxon just lets the oil flow and hires some in house engineers to open and close valves (yes I’m simplifying things). If any repairs, maintenance, construction, inspection, or installation is needed, guess what, they subcontract out the work to the various companies which specialize in these fields. My point being that if Egypt, Brunei, Brazil, Norway, Italy, Azerbaijan, Venezuela, Iraq, Iran, Malaysia, Nigeria, Russia, Bolivia, can have state run oil companies so can the USA, the personnel don’t have to change, you just put job wanted ads out and engineers will come out of the woodwork, people want to work (although it is politically impossible in the USA). I also wanted to point out that we don’t need to nationalize everything about the oil industry, we can still subcontract out all the work (logistics, construction, drilling, exploration, maintenance, inspections, repairs) as does Exxon so as to provide a thriving trade for free market capitalism and we can even have private companies competing with state owned companies, or we can have state/private hybrid energy companies which is the norm in the rest of the world. In Equatorial Guinea for example there is no state owned energy company but the government instead receives 50% of ExxonMobil’s revenue, just for allowing Exxon the right to extract, every other super tanker that is loaded with crude goes straight into the presidents –read dictators- bank account (with no investment on his part), I doubt that In America we get the same sort of deal with Exxon, on the contrary our government subsidizes them! Nigeria does have a state owned oil company but all it does is collect money, to the tune of 60% of every hydro carbon production project that takes place within its territory, if you start to do the math you will quickly realize that this adds up to an astronomical amount of money for the state, if only they used it wisely.

One can easily imagine the positive outcomes of such a scenario, just look at Statoil, Norway’s state owned gas and oil giant, there is no reason America can’t do what Statoil does (except for its politically impossible). Everything Statoil does is done in an extremely safe, profitable, environmentally friendly manner (in the last 5 years there has not been a single reported injury/incident in all the oil fields of Norway and all of their fields are low emission zones with the most stringent government regulation). The mountains of money that is earned goes into a massive savings account for the country to earn interest on until the oil reserves run out, at which time the entire country will be able to survive on the interest earned from that savings account alone. Not to mention the fact that Statoil is one of the most technologically advanced and innovative oil companies out there, which operates in some of the harshest weather conditions known to man. They also operate internationally and are able to successfully compete with private corporations. The socio-economic and environmental benefits of having a state run oil giant could be enormous. I’m not naïve, if we turned around tomorrow and created a single state owned oil giant in America and put the others out of business there would be a horrible back lash and it would surely struggle or fail in the beginning, these kinds of changes must be gradually instated incrementally over time, people do not like change, especially very rich and powerful people who are making a killing off of the most profitable product in the world other then illegal drugs.

I also think the government should be directly responsible for running a healthy infrastructure which is constantly being maintained, improved and evolved. According to the CIA Worldfactbook one of Americas biggest long-term economic problems is our countries neglect of investment in infrastructure (as you can see from my graph America invests the least amount of GDP back into the country out of all 15 countries listed). When it comes to the question of stimulating our economy, it does not really matter what the money is spent on, so long as it is stimulating the economy, whether it’s the arms race or civil infrastructure. My thought is that we may as well improve our country and simultaneously stimulate the economy in a meaningful way, so as to make our country a better place for future generations. Privatizing all of our utilities does not work to the benefit of our country or population. It would be preferable to run an enormous countrywide infrastructure project infinitely, not just in times of economic despair. The bottom line being that rather then spending billions a year on military spending which is often times wasteful, why not direct some of those funds for much needed domestic use whilst simultaneously employing much of the lower classes for the unskilled labor force that would be required (as a side note: I would argue that if someone has the chance to work then they should not be eligible for certain welfare benefits I also think drug tests should be mandatory in order to cash a welfare check, some people deserve to suffer if they bring it on themselves.)

In my opinion there are infinitely beneficial reasons for having a state run health care system, even if it doesn’t make a profit. I know that our current system is fraught with paralytic inefficiencies and vastly overpaid administrations. “Every other wealthy nation insures everyone for about 10% of GDP. Our system leaves out some 50 million people, and costs 17% of GDP. That’s a difference of 7% of GDP, far more then the structural budget deficit” (“The Left Edge of Possible”, by Robert Kuttner). One can see by the graphs that I have produced that America is lagging in the health care department and it is my feeling that America should be the ‘country on the hill’ and a beacon for all other countries to look to and try and emulate. Instead our health care system can’t even come close to the success of Cuba’s. My definition of success of the health care industry would be the ease and access to which the general public can get effective affordable health care, not how much profit Merck Pharmaceuticals can make in a quarter, or the level of care the top 5% receive. I’m not saying there is no place for private care, if the rich want to get the best medical care money can buy and corporations want a speedier service for their important employees then that’s great, let the free market flourish. But I believe it is our government’s responsibility to make sure the entire population has access to affordable top-notch health care. There will even be a place for the private pharmaceutical companies but they will surely not make the same insane profits.

As far as the financial industry is concerned, I know its extremely complicated, but to put it simply if we have to bailout a financial institution then we should nationalize that institution, as we did with Fannie Mae and Freddie Mac (after we fix it we can then sell it off again to the private market at a profit), this to me is just common sense, that is the only way to solve too big too fail whilst simultaneously saving the world from economic collapse, it would also send a very clear message to the other financial institutions that there will be serious consequences, not rewards, for blatant malpractice and neglect. In the UK (financial industry capitol of the world) they nationalized much of the financial sector after bailing them out, now their banks are reporting record profits and the government gets a share. It goes without saying that our financial system is in dire need of vast regulation and oversight reform, if you read any government report on the state of our financial system in the USA it is actually more likely to collapse again then it was before the recent collapse because no meaningful reform has taken place, what’s more is the next collapse will be larger in scale and more devastating to the worldwide economy, any small reforms that are trying to be pushed through are shot down by special interest groups which have wide support on the left and right, again that is another story.

In the US we recently nationalized General Motors and Chrysler and the GOA successfully made GM profitable again and sold it to the free market at a profit for the taxpayers. Considering the dire state GM (and the economy) was in when the GOA acquired the 61% share of GM, it is a success story, the government can run industry. “Yes we can!”, Barak Obama.

Part IV
Conclusion

Its great for us to project this free market image, yet we are extremely protectionist and have massive state involvement in all of our most internationally successful industries. The free market fundamentalists in America are living a lie; our economy is not a free market. We love for the third world to be truly capitalist because that means they will be highly inefficient and open to foreign penetration (hence the unbelievably high gap in living standards despite often times being resource rich.) This has all been true since the beginning of the industrial revolution: there is not a single economy in history that’s developed without massive state intervention, like high protectionist tariffs and subsidies. All the things we prevent the third world from doing are the prerequisites for development elsewhere. Food for thought: what made America so successful in our early days? Tobacco and cotton, well in order for those two industries to be so successful we relied on genocide and slavery to make them profitable, can you imagine a bigger market distortion then slavery and genocide? Just keep that in mind when you hear US economists and politicians lambasting a developing country (or a developed country for that matter which happens quite often) for distorting the market with subsidies and protectionist measures. In America we want to have our cake and eat it too, which is fine, but the average person needs to see through the hypocrisy before subscribing to certain ideologies.

It is worth noting and emphasizing how significant these industries (energy, health, technology, agriculture, finance) are to a healthy socio-economic environment, it is in all the peoples best interest (maybe not CEOs) for energy, healthcare, technology, finance and agriculture to be managed in an extremely careful, thought out, debated, intelligent, transparent plan, so that we can ensure a happier healthier country (world) for our future generations, the bottom line can not be how much profit can I make tomorrow? We must be thinking about the long term, the free market does not take the long term into account, but people do, it is in their best interest to do so and at the end of the day its in the free markets interest to think in the long term, otherwise the entire system is bound to self destruct, we just saw a glimpse of that in 2008/2009 when the wheels of the worldwide economy came to a grinding halt, but currently our politicians and financiers are far too focused on tomorrow when they should be thinking of our great grandchildren’s time.

The bottom line is that in order for our economy to survive we rely heavily on state intervention, we must make this intervention more efficient and transparent and in so doing reap the rewards and reinvest the profits progressively into our society by improved infrastructure, health care, education, social welfare, research and development, energy, etc. We must put checks and balances on the most politically influential and powerful corporations, putting that power into the hands of the public so that we can dig ourselves out of the vast hole that our socio-economic state is falling into.

**I had a bunch of graphs here that showed many alarming statistics, however they didnt copy over, if your interested I can post them to you.