Modern American Capitalism has Failed.
As the United States is drowning in coronavirus deaths, as protests and wildfires engulf our cities, and as we near an incredibly divisive presidential election, many have asked what has gone wrong. Many will name reasons such as coronavirus, general instability, or prominent public leaders’ deaths. Unfortunately, while these may have added to the issues, it is clear that modern capitalism has finally demonstrated its fragility. Wealth inequality, the corporate takeover of politics, and climate change can be attributed to modern capitalism’s disastrous effects, showing its shortcomings.
Unequivocally, the existence of mass wealth inequality between the top income earners and the working class is a byproduct of our modern blend of capitalism. Most people are aware of what are affectionately known as the 1% figures. The appalling fact that the top 1 percent own upwards of 38.5% of the entire country’s wealth. The fact that the three wealthiest Americans have more wealth than the bottom half of America. The fact that over 65 million American families have zero or negative net worth due to debt. Many will attempt to defend these figures by claiming that the wealthy earned their money or that they work harder, or that being poor is a mindset. However, the fact of the matter is that the CEO of a company does not somehow work 400 times harder than a janitor in that same company, yet the pay difference reflects that.
The Coronavirus has only exacerbated this crisis. Mainly due to the US Federal Reserve pumping 3 trillion dollars into the stock market during the pandemic, American billionaires became $434 billion richer. Simultaneously, millions of lower-income earners lost their jobs and were left with little to no consistent support from the government. This system of socialism for the rich and rugged individualism for the rest is unfair and inhumane (MLK Jr.). Until 1970, the typical American family’s income growth matched the country’s economic productivity, but since then, as the income increases have stagnated, productivity has continued to climb. If productivity has continued to rise, but average incomes have not increased as they did previously, this would indicate that wealth is being diverted. In this case, it comes from the jean pockets of the American middle and working class into the silk pockets of corporations and the wealthy.
One might remark that the accumulated wealth concentrated in corporations should only be an issue in terms of inequality, as it only affects wages. Unfortunately, by bestowing upon corporations the right to personhood, our capitalism has created immortal entities that act as vehicles for these inordinate amounts of ill gotten wealth. By granting corporations personhood, they were granted the right to free speech, which had disastrous effect on politics. The idea that a corporation, a device solely designed to create maximum profit for itself, can voice its opinion in politics is absurd. However, in 2010, the Citizens United v. Federal Election Commission Supreme Court ruling allowed corporations to exercise their right to free speech through spending money in politics. The gains they made by taking from the poor were now allowed to be funneled into policies that allowed them to take more. Like individuals, corporations have limits on the money they can directly spend on campaigns. The issue comes when we factor in Super Political Action Committees (Super PACs). Companies can anonymously spend unlimited amounts of money to indirectly influence the outcomes of elections through Super PACs.
This is a morally indefensible system and is effectively bribery. Take, for example, the “tax extenders,” a set of approximately 50 tax breaks, that technically expire around two years after they become legislation. This allows the cost of the tax break on paper to seem low, as it is only “temporarily” in effect until renewed. These tax breaks are renewed every few years at the insistence of lobbyists who generously contribute funds to lawmakers. This is not an isolated example. In the 2018 cycle, Congress received a staggering 67 million dollars from leadership PACs. Indirectly paying money to help pass legislation beneficial to corporations and deceptively misleading the public to the tax breaks’ actual cost should be considered bribery. We have legalized bribery in this country, and the same politicians who should pass laws to prevent this activity are the same politicians benefiting.
Our capitalism has created corporations whose sole purpose is to provide the minimum viable product to maximize profit in the cheapest way possible. When products are as cheap as possible, the environment and sustainability cannot be a significant concern. While it is true that some companies such as Apple, Amazon, and Microsoft all have initiatives to become carbon neutral by a set date, the majority of companies do not care about being environmentally friendly. These companies shift the blame onto individuals by making it seem like an individual’s climate footprint is the real enemy. The truth is that just 100 companies are responsible for 71% of emissions worldwide. It is corporations that are causing climate change, not individuals’ actions. When we saw our climate changing, ice caps melting, sea levels rise, the weather becoming more violent and erratic, the first action should have been to reduce emissions. It is the role of the government to step in and regulate corporations to prevent exactly what is occurring today. Instead, in the United States, primarily due to the influence of money in politics, many from our right-wing party deny the existence of climate change, as illustrated by their words and their lack of climate-change oriented solutions. Similarly, many in our supposedly left-wing party believe a plan to make America carbon neutral by 2050 is too radical. Without proper regulation, capitalism will continue to wreak permanent havoc on the environment in order to generate profit. This is the legacy of Capitalism. A system that is allowed, even encouraged, to kill the planet for profit.
In closing, I feel the need to amend the title. Capitalism has not failed. Capitalism has just failed the ordinary people. Capitalism is performing exceptionally well under the exact parameters it was designed to fulfill. Companies can extract as much profit as they are able to, to further individual gain of the ultra wealthy. People can use companies as shells to generate exponentially more individual profit by kicking the environment to the dust, controlling politics, and effectively stealing from the poor. It is time for the people of America to take back power from these corporations. We need strong and effective politicians to regulate these power-hungry corporations. The most effective way for a leader to regulate these corporations would be for the leader to free themselves from corporate money’s influence in politics. At the end of a mostly saddening and depressing article, I present you with some good news. The movement of politicians who refuse to take corporate PAC money is increasing. In 2018, 27 new representatives in the house refused to take a single dime of corporate PAC money. Bernie Sanders, an extremely viable candidate, was one of the few in the 2016 and 2020 presidential runs to refuse corporations’ dark money. These “no dark money” candidates often outraise others due to the sheer force of grassroots donations from politically excited individuals. Perhaps, the day will come that the Citizens United v. Federal Election Commission ruling will be overturned, and perhaps corporations will be effectively regulated. Until then, preventing corporations from continuing to take over our society should be a priority for all.