Amerika

Capitalism Or Democracy?

Since the Cold War ended, capitalism has emerged the clear winner in the West. The creepy Leftist states of Europe dialed back their socialism, and instead used capitalism and high taxes to fund their visions of egalitarianism, producing the horrific “everything is fine!” societies of the 1990s.

In America as well, things went south. The same process that had ramped up in the 1980s — the standardization of everything, jobs becoming highly regulated, and products invading every area of life and displacing culture — created a society that seemed logical and was beyond criticizing, yet satisfied no one.

However, long term problems remained. In particular, it seemed as if capitalism was not doing so well, since people were having trouble affording anything but the consumer level products on offer. You could get a poor-quality public education, eat lots of mass-produced food, live in another tract house with a forty minute commute, and own lots of gadgets that seemed to die every five years, but you could never get out, no matter how hard you worked at your day job.

In essence, it looked like things had somewhat stagnated and continue to be sluggish, as measured by the decline in real wages:

After adjusting for inflation, however, today’s average hourly wage has just about the same purchasing power it did in 1978, following a long slide in the 1980s and early 1990s and bumpy, inconsistent growth since then. In fact, in real terms average hourly earnings peaked more than 45 years ago: The $4.03-an-hour rate recorded in January 1973 had the same purchasing power that $23.68 would today.

Humans look for something to blame that does not require them to change or to face the elephant in the room, so they naturally wave their arms furiously and scream about capitalism. However, a more realistic look at the situation shows that this is not the case.

A civilization consists of an organic culture, some form of leadership, and some type of economic system. That organic culture consists of a heritage, customs, and people; they are tied by intangibles like ideals, aesthetics, and identity. This or its substitute determines how the economic system works. For example, in France people buy croissants instead of donuts, even if the donuts are more cost-effective.

Leadership can also influence the markets. In place of leadership in modern society, we have government, which takes over some of the roles of leadership, culture, and religion (which is included in culture in the assessment above). Government also influences the economy.

After imbibing heavily of the meme that we were the free world that brought equality to all people in WW2, the generation that fought that war grew up fifteen years later and by the early 1960s, were making all sorts of changes. In particular, they favored Leftist ones.

They brought women into the workforce, opened up immigration to the third world, enacted Great Society welfare programs, and raised effective tax rates while adding many taxes to them, like state income taxes, property taxes, sales taxes, registration fees, and licensing.

Jobs became state-regulated. You could no longer learn a skill and set out your shingle; you had to go through a credentials program, pass an exam, and pay the state fees to keep all of that current. A wave of regulations descended on jobs, including new laws to protect unions.

With sexual liberation, women were encouraged to enter the workforce by media, government, and some aspects of popular culture, which had effectively been replaced by the political culture created during WW2. It was no longer enough to be decent, moral, and good; you had to also endorse equality, because that was now our official idea and how we were going to beat the Soviets.

Looking back on those years, it seems strange how many Communist ideas crossed the oceans because we were competing with them. It was like a car salesman: “Sure, that other model has an easy-glide suspension, but ours has four wheel independent suspension and disc brakes!”

Somehow, our 1950s salesmanship-oriented public culture crossed over with the egalitarian mania of the Soviets, producing a hybrid in which the right way to make money was to support Leftism. Civil Rights took over from the idea of natural autonomy, sometimes mistakenly called “rugged individualism” by idiots, which meant that you could do in society roughly what you could do in nature, with a few exceptions needed to keep society going.

It was as if the wartime mentality of WW2 never ended, which makes sense given that we expected the Cold War to “go hot” at any minute, and so people became as ideologically controlled as they were in the Soviet Union. We saw “right” as meaning more than the old patriotism, church, culture, and moral rectitude, but a new culture formed of egalitarianism and “working hard” to support the state that did so much good across the world.

Only a few dared point out that the Emperor had no new clothes, and that FDR was not the savior we thought him to be, but someone who might as well be working for Russia. When JFK got shot, people sort of gave up on the idea that things were good, and accepted that we were in decay, but then they doubled the error — in scientific terms this is called a multibungle — and endorsed the same political culture which had caused that instability.

Eventually a deeply-divided nation confronted the problem in the 1960s and realized that the situation was too far gone for us to agree on anything. The Civil War was won a century after it was lost when the supposedly healed rift proved to be permanent and widening.

Finally we got the Barack Obama of the 1970s, Jimmy Carter, who did what made everyone feel safe and happy about how good they were in terms of that political culture, but utterly demolished foreign policy and laid the groundwork for economic woes.

After a series of false starts, the Right finally got a moderate Right-winger into office with Ronald Reagan, and by refusing to do what his predecessors had done, he managed to push the Cold War to an economic and political conflict and end it by virtue of our system working better. We had consumerism, which meant more options for people, which said that the workers had freedom and were actually equal because they could afford better lives, and at that point the Soviets sort of folded away in the stench of a failed economic system.

However, at the same time, life had become Hell. Trapped by innumerable court decisions and laws, our lives had become bureaucratic, and this made public schools into miserable little ideological echo chambers where children were treated as prisoners to be crushed, molded, and made into ideological agents of our political culture.

Our streets regularly blazed with race riots or the subtler version thereof, ethnic crime, in which horrors were perpetrated but no one really bothered to report them. In addition to the human cost, all of these things added to the cost of doing business.

Contemporary voters do not understand this, but taxes imposed on businesses and individuals are passed on to their customers. For this reason, raising taxes might bring in money that can then be paid to citizens, but it also creates a constant pressure to raise costs and this makes the currency of that society less effective.

Since the 1950s, the largest growth in government spending has been on entitlement programs, which started small in the 1930s but grew in the postwar years, accelerating radically in the 1960s with Leftist presidents. These made life more expensive and that made the purchasing power of average wages go down substantially.

When you add to that the expenses which have been added to the American lifestyle during that time, including a car-centric existence, the stagnation in real wages makes sense. We have higher costs, more people in the workforce, and less efficiency thanks to our bureaucracy.

This leads us to the present day, where economists wonder where we went wrong:

Beside a lack of competition, the investment slump stems from what Summers calls the de-massification of the economy. Developers aren’t building as many malls and stores, because goods now go straight from warehouses to homes. Offices don’t need as much storage space. Cellphones have replaced not just desktop computers but also cameras, stereos, books and more. Many young people have decided they’re happy living in small apartments, without cars.

The 2017 Trump tax law…pumped money into the economy last year, thanks largely to those temporary tax cuts for the middle class and poor. And guess what? G.D.P. growth finally met some forecasters’ expectations, as you can see from the first chart above. The economy expanded 2.9 percent in 2018. Unfortunately, the boost seems to have been temporary. In the first quarter of this year, growth has slowed markedly, probably to about 0.5 percent. It will most likely grow faster over the rest of 2019, but not 3 percent. Once again, economists have started downgrading their expectations.

Perhaps they read the economy wrong because they could not violate our present political culture and point out that egalitarianism has steered us wrong. The consumer bubble ended because we raised the cost of everything at the same time certain technologies matured, such that there no new huge innovations and so there was no point purchasing newer versions of those gadgets.

There will be no peace for this economy until we cut the largest costs that we pass on to citizens, namely the entitlements. Government takes a big share of the money that comes in and then spends on it people who are not going to re-invest, namely the permanent poor underclasses and elderly, effectively bleeding the economy. At the same time, it penalizes those who do well by taking increasing amounts of their money, causing them to have fewer children and live less expensive lives, which accounts for the collapse of consumerism described above.

In other words, our problem here is not capitalism, but democracy. Our voters decided on a series of programs that distorted the market, took money out of it, and made it a slave to centralized structures just as surely as the Soviet Union controlled its markets. Not surprisingly, our results have been bad as well, since we are now operating as a bloated and inefficient bureaucracy.

However, we cannot criticize the Party, and so instead, capitalism becomes the scapegoat for the failure of democracy:

“I think capitalism is under serious threat because it’s stopped providing for the many, and when that happens, the many revolt against capitalism,” he told the BBC.

Mr Rajan said it was possible in the past to obtain a middle class job with “modest education”.

But the landscape has changed in the wake of the 2008 global financial crisis and the resulting austerity.

Few remember now, because voters have the attention span of a goldfish, but the recession was caused by entitlements translated into easy loans given out through business, causing a rise in speculation and later defaults by those who could not actually afford those properties.

As usual, the voters always go in whatever direction they were going in before, because otherwise they would have to admit an error, and in their simplistic world, anyone who commits an error must be fired because of the inconvenience he caused them. You know the stereotype of a woman named Karen with angle-cut bangs who always demands to speak to the manager? Voters are the ultimate Karens.

Instead of admitting that egalitarianism has bankrupted governments across the West, and that most of our $22 trillion debt comes from the two-thirds of our budget that goes to entitlements programs, many voters have hit upon a simple solution: demand more entitlements, pushing us closer to the socialist state. Instead of recoiling from socialism as a sane person would, these voters have doubled down on socialism:

Asked if they agreed with the statement: “Prefer living in a socialist country,” 49.6 percent of Millennials and members of Generation Z, when combined, said they agreed according to the survey conducted by Harris poll given exclusively to Axios. That differed from the 37.2 percent of the total adult group surveyed.

They are reacting to the disaster of democracy, which even Leftist politicians note has made workers slaves to jobs:

Ocasio-Cortez, who made the remark at South by Southwest in Austin, Texas, added that “we should not be haunted by” the possibility of automated workers replacing jobs, according to The Verge.

“We should be excited by that. But the reason we’re not excited by it is because we live in a society where if you don’t have a job, you are left to die. And that is, at its core, our problem,” added the congressman, whose “Green New Deal” proposal includes a federal jobs guarantee.

Ocasio-Cortez also said during her interview that automation could potentially allow for more time to focus on art, inventions, the sciences and “enjoying the world that we live in.”

“Because not all creativity needs to be bonded by wage,” she said.

Although the Right likes to hate AOC, her social intelligence is gold, and she knows how to manipulate any situation in order to bring the people who support her out of the woodwork. She has nailed the truth of America today: the worker’s paradise has become a trap.

If any of us wonder why, we need to look no further than the decisions made by democracy. Without our high taxes, endless red tape, political agenda, lawsuits it enabled, and neurotic constant infighting over equality, we would have the potential to actually live.

Imagine paying a quarter what you do in taxes, paying less than half what you do for housing and a fraction for healthcare, while goods cost far less than they do now. That is America without entitlements and civil rights, which are used to legally justify many entitlements.

The “yellow vests” in France protest for similar reasons; high taxes used to fund almost half of their population have bankrupted the working person so that he is dependent on his job and terrified of his employer firing him.

Ironically, all socialist systems tend to end up giving more power to those who abuse workers, and less to the people who might be able to escape from the trap of debt and job-dependency, much like unions make rich organizers and workers who watch their jobs get outsourced.

We have reached a state like that of the Soviets, and it has taken us only a couple decades past the end of the Cold War to do so, mainly because our pursuit of Leftist policies has ended the great wealth boom.

Blaming capitalism for this ultimately does not hold water because our systems are only partially capitalist, and the cause of our financial troubles is found in government, not industry. At the end of the day, only egalitarianism can be to blame.

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