Wrap Up: Decay Part III

This post will attempt to wrap up all that I have typed over the past few days. I will do this by responding to some comments!

I will start by saying there are always expections to the rule. Not everyone has no values. Not everyone is having a moral crisis. but our socirty, as a whole, is. Look at what is happening in the cities. Crime is up. Violence is up. Nobody talks to their neighbor anymore. Divorce rates are up. Look what happened after the storms. Looting. Price gouging. People trampling other people to get a bag of ice.

Yes, there were those who decided to help people. There were people who decided to be part of a solution, and not add to the problem. I do not consider those who took supplies they NEEDED to be looters. The people that "stole" food, so that they could attempt to set up a public kitchen were NOT looters - they were people doing the right thing. But far more people decided to add to the problem.

1. I have not owned a business, but my parents did for a few years. It was about as small as a business could get, with one paid employee who was not me. But this does not really matter too much in my analysis of the system.

2. Wal-Mart is a good example for my analysis because it is so huge, and so well known. It also employes the predatory business practices that one must use in order to get that big. I live in a fairly large city, so I will always have a choice where to shop. A good part of my aversion to Wal-Mart is simply due to the fact that the stores are not that close to me, and they are located in heavy traffic areas. Why go out of my way, get stuck in traffic for an hour (in both directions), deal with a packed parking lot, stand in some long line - just to get super crappy customer service? I can go to Target, Best Buy, and a host of other large stores. But all big box retailers are pretty much the same in the big picture.

But again, the crappy service is not the point. The point is that the store is a perfect example of the final product of our system. When Wal-Mart started it was just another little store. But it grew. And grew. Soon it became too large for the little town it was in, so it expanded to other areas. And it grew even larger. On the surface, this is a huge success story.

But go to a small or even a medium size town - anyplace too small for a Wal-Mart and any other store - and you see the end result of capitalism. No consumer choice. For many people living in small town America, there is really only one place to shop. The mega box retailer pushed aside all other competition. And in the really small places, Wal-Mart is the major employer. People work at the same place they are forced to shop at. A good percentage of their wage goes right back to the company.

I suggest that you take this time to download some MP3s now. Start with "sixteen tons" by Tennessee Ford. You load 16 tons, and what do you get - another day older and deeper in debt. St Peter dont you call me cause I can't go - I owe my soul to the company store.

Only today, for many people, the company store is not owned by the coal mine. For those who do not know what the company store is, back in the day coal mines would built towns around the mines. Workers would get to live in this town. Wages paid to the miners would end up right back in the pockets of the company, as miners would pay rent and buy all their goods at the company store. If you did not have money, no problem. The store would sell you whatever, and just take the money out of your next check. Before long, miners would bring home no money at all, they worked to pay the bill to the company store. And we wonder why unions were born.

With only one store, consumers are left to the whim of a bunch of guys in suits who live in a palace. Well maybe not a real palace, but certianly not in a trailer or little house of less than say 10,000 square feet.

And how does this limit your choice? Go to a Wal-Mart and try to get them to stock a product that they do not already carry. Go on, try. It is already known that the store will not stock some CDs or books that the company management does not like. Once Wal-Mart is the only store in a given area, the store chooses what you buy, not you. The deli does not carry Boar's Head brand? Too bad! You are not buying it. The store management decides to not carry Toshiba products? Guess you have to go with Sony. After all, it is not like you can go anywere else.

The store can also raise prices. And what would you do? Drive 60 miles to the next little town and go to their Wal-Mart? There are some reports that stores did jack up prices slightly once the competition was gone.

Before the time when President Teddy Roosevelt used the anti-trust laws, these same business practices were in use. Companies like Standard Oil would sell product below market cost, driving away all competition. Once the competition was gone, they would jack up prices again. The men who ran these companies became more powerful than the government of the USA, and Teddy did not like that one bit. So he went after them, and forced large companies to break apart.

Competition was then restored, and consumers were better off. In more recent times, AT&T was forced to give up its stranglehold on long distance phone service. This act opened the door to massive competition and lower rates. Consumers are better off for it.

For the exact same reason, I was dissapointed when the government lost the anti-trust suit against Microsoft. Winblows is a terrible operating system, but what other choice is there? Mac? Linux? Microsoft is still out there, using predatory practices in an attempt to crush what little competition there is - so that EVERYTHING will have to use Windows. What is good for large companies is usually terrible for consumers.

3. I know that profits are a necessary evil. If used responsibly, they are not evil at all. But the way the system is set up, it is almost impossible to use them responsibily.

Lets go back to the oil companies, and their record breaking profits. Consumers also saw record high prices. Families living on a budget found themselvs in a little bit of a crunch, and had to figure out what other family budget account(s) to loot. And for what? So some dude who owns a million shares of stock can take another ski vacation to Aspen? So managers can award themselvs a fat bonus?

I would also like to point out that the price of gas at the pump reached $3.00 a gallon way before hurricane season. Yes, refineries were damaged, and oil platforms were sunk. Undersea pipelines were also damaged. After the storms, prices actually went down - in large part because the public got pissed off. Price hikes at the pump had nothing to do with storm damage, it was all due to greed. Cost of production went up 5 cents a gallon, oil companies would raise the price by 15 cents a gallon. All BEFORE hurricane season. Prices did NOT go up because of the damage - not by a long shot.

At the same time, mergers are making oil companies larger and fewer. Was there any connection to the mergers and the price hikes? Of course there is.

4. Medicine. In America the right wing has done an excellent job spreading the idea that medicine for everyone is a bad idea. People should have to PAY for health care! Right? Otherwise the system will collapse.

Except for the little problem of Norway. They have national health care over there. And it works. People get all the treatment they require. There is no doctor shortage. There is not a shortage of hospital beds, or nurses.

Yet, people still go to medical school to obtain advanced degrees. Why?

The idea that people become doctors to make lots of money is the wrong way to look at it. How about being a doctor because you want to help people? How about being a doctor because you want to lessen suffering?

In places like Norway, doctors still do well. The job still pays decently. But since hospitals are not for profit businesses, costs are lower. The government builds the hospitals, and buys all the equipment for them. With the idea that the hospital needs to pay off stockholders gone, all that needs to be paid is the direct cost of the treatment. In America, if the hospital pays 5o cents for a pill, they bill insurance a buck. Insurance in turn bills employers, or people paying for private policies. Cost gets higher at every step. Take put the profit, and a 50 cent pill is billed at 50 cents.

But the idea of doing the same in America is just crazy. Who needs it? It will reduce the quality of medicine! The fact that it works in other places is just propaganda I suppose.

What makes it work is a strong public demand for it, and a government committed to it. Norway spends close to 10% of the nation's GDP on health care.

At any rate, the whole problem boils down to human nature. Capitalism without regulation brings out a lot of negative aspects of human nature. A system that encourages greed, in order to accumulate as much wealth and power for individuals, is doomed to fail. And it DID fail. Capitalism as Adam Smith knew it is dead. We are living on "New Deal" capitalism, and this new deal borrows heavily from the ideas of Keynes. Without the New Deal, the depression might have led to revolt.

That is, it might have led to a revolt if the government did not provide jobs working on massive projects like the Hoover Dam and so forth.

America can survive another economic change. It survived the transition from classical ecoomics (farming) to the industrial revolution and the age of trusts, the rise of labor unions, the great depression and the New Deal, and so on.

It is impossible to know when the next economic evloutionary step will happen, or what that step will look like. It is impossible to know if the next step will happen gradualy over time, or if it will be caused by some major event like another Great Depression. Nobody knows these things.

I am still putting together my unified theory of everything. I am still working out some rough edges.