Homework!
Read an article dealing somehow with the state of the economy, and write a couple paragraph response. Your response can focus on anything about the article (what you agree with, what you don’t agree with), but if you are looking for something to write about an ethical viewpoint is a good place to start.
Good Places to Look for Articles:
Business Sections of Online Newspapers
Paul Krugman of the NYTIMES (Really, anyone in that economics division is a great read)
Good Luck People!
Let me start this off by saying I firmly believe in capitalism. The free market plants seeds of creativity and cultivates those seeds into an ever expanding forum of new inventions that move humanity forward. I also am firmly against federal government overreach, particularly when it encroaches and over regulates the free market. Now that I have gotten those points out of the way, allow me to explain a free market tactic that pisses me off.
I am a political nerd of sorts. I have worked in campaigns, interned in federal offices, and find a relaxing day at home means reading articles on political history and modern politics. There has been a trend going on recently in our government that has really begun to disturb me, especially considering the current state of our world. What might this be you ask? THE DEFENSE BUDGET BEING CUT.
Now I can already hear the people squawking in my head, “what are you some kind of war monger?!? The defense budget is huge! Why shouldn’t we cut it?!?” I have already had multiple people ask me that line of questioning when I have made this point. I am not suggesting it shouldn’t be cut, I am simply questioning how it is currently being cut. So allow me to explain…
For the fiscal cycle of 2009 through present day, the defense spending budget has accounted for 23% of our federal spending.
[http://www.usgovernmentspending.com/federal_budget_detail_2014bs12014n_30#usgs302]
Thats big. Like really big. Like $873 billion big. With an ever growing deficit, its probably a good idea to bring that average down. So when Defense Secretary Chuck Hagel and President Obama announced at the beginning of this year that the new budget plan for this year will cut down force size to save costs, I was left scratching my head. The military is officially cutting down force sizes to below what we had before WW2, adding a wonderful kick to the teeth to men and women serving this country by sending them pink slips while on deployment. What a jolly way to learn you won’t have a job when you get home, while being shot at overseas.
Before I continue, let me explain how this ties into economics and why I am bitching about cutting force size to reduce the defense budget. I assume you are familiar with Lockheed Martin, the aerospace corporation. Like many corporations, LM provides many government contracts. Also like many corporations, LM utilizes PACs (Political Action Committees) to donate to congressional and senate leaders. This is where I get mad. LM currently is in contract with the government for a plane called the F35. LM has been continually lobbying the necessity to ensure this fleet is built, and has donated generously to both democrats and republicans. (Don’t believe me? Go to opensecrets.org and look at their donor recipient list) I am all for corporations and their role in the market. I am ABSOLUTELY NOT FOR POLITICAL GREED F*$%ING WITH OUR MEN AND WOMEN IN UNIFORM BECAUSE OF THESE CORPORATIONS!
The F35 program has already cost over $398.6 billion and is estimated to cost over $1 trillion by the end of its life cycle. Why is it so expensive you ask? Because the damn thing breaks every time they fly it. No seriously. LM has had a problem with the oxygen system in the plane working correctly when it rolls out of the factory, because you know pilots need air. It costs several million to fix the already $137 million aircraft. To help you understand the flawed logic of keeping this program alive, heres this little nugget:
This plane, despite looking pretty cool, is not only ineffective in combat compared to the plane it is attempting to phase out (The A10 Warthog), none and I mean none of the military branches want it.
To cut military jobs, screw veterans, and put our military at greater risk of being screwed in combat with the looming threat of ISIS (and that sneaky sneaky Vladimir Putin) over a plane that the military essentially does not want and certainly doesn’t need, why wouldn’t we cut a program like this? The answer is lobbying.
This may surprise you to know, but our government sucks at spending money sometimes. (No seriously.) A friend of mine in the Army, whom I will not name for obvious reasons, spoke with me on this very subject. He was given a series of document scanners for his units office that were bought on federal contract. The government spent several thousand dollars for these scanners under contract. So out of curiosity, I went on Amazon and looked at how much it was to buy ten of those scanners. Any guesses on how much it was? Just $1249.00. Certainly not several thousand dollars. The point is the federal defense budget has a problem with a great deal of fat, unnecessary expenses from contracts that simply are not needed that if actually cut, would save billions and cut the defense budget significantly without screwing with our military. The reason this doesn’t happen is lobbying and overly generous donations from corporate political action committees. Notice I don’t directly blame corporations, because you really cant for the most part.
During my time working in politics, I saw what can only be described as mind numbing self centeredness on both sides of the ideological aisle. You see, the political greed of politicians, not corporations, is what fuels this mess. Lockheed Martin to preserve the program and the jobs created by it outsourcing to separate states throughout the US. What this means is one part is made in a factory in a democratic district in one state, and another is made in a Republican district. It’s an effective strategy to play off of. When you’re a congressional leader, you have a pretty awesome job; you make a lot of money, live a classy life, etc. So when it was challenged that the F35 needed to stop, that challenge fell on deaf ears. Because no, and I mean NO politician in this economy would ever do the right thing if it meant risking his job by sacrificing others.
Look, being a political leader, be it President or a congressman/woman is meant to be a tough job. Tough choices to run our country effectively, keep it safe, and preserve a healthy nation are the nature of the job. Yet our economy, our country and our way of life is increasingly becoming jeopardized by the greed of politicians not wanting to do the right thing and instead just take the corporate money and turn a blind eye. You, as a responsible citizen of the United States of America need to take a stand on this. Go to Open Secrets, look up your representative and their voting record as well as their donor record. You need to tell them that you oppose these wasteful spending programs ruining not only our military, but taking funds that can go elsewhere to programs like education. Support opposition to lobbying and corporate donations. Corporations themselves are not bad, but corporate power over the security and state of our nation is dangerous and puts us all at risk. Support getting the greed out of Washington, clean out the bull$#!% and corruption and make leaders accountable for whom the represent, Us. The people. Not big business.
By the way, In case you were curious here is the A10 Tank Buster (aka “The Hand of God”) in all its glory.
Today I want to bring up a rather famous study by Princeton’s Martin Gilens and Benjamin I. Page. Their study is called Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens. You may remember it as the study that was reported to have proved the US is an oligopoly rather than a democracy.
While I wouldn’t go that far in my analysis of it, it does raise some very important points about the state of democracy in America. It finds that in our current system, the average citizen sees little of their own desires being implemented in policy, while moneyed interests like business lobbying groups see a lot of their desires implemented in policy. This allows those with money to rig the system in their favor so that this process can continue.
What do you think? Do you think that Gilens and Page’s analysis is accurate? Does something need to be done about this? Leave your thoughts in the comments.
Machinery, electronic devices, oil, vehicles and aircraft are the top 5 U.S. exports according to worldstopexports.com. Overall the U.S. exported over 1.5 trillion dollars of items to countries around the world. This is an increase of around 49 percent compared to 2009. This demonstrates the U.S. and its economic growth. As the world becomes more and more technologically advanced The US’ exports are only going to go up because of all the technological industries in the U.S. When looking at exports it doesn’t necessarily show the overall economic power of a country but it can be a good indicator. To really get a grasp of how powerful a countries economic power is one must look at the countries GDP. The USA has a GDP of 16,244,600 (in millions) this is extremely large considering the second largest GDP country is China with a GDP of 8,538,400. This is an incredible difference between GDPs and it just shows how much of an Economic powerhouse the U.S. is. The U.S. makes up approximately 22 percent of the worlds economy according to the United Nations. Overall the US has the most powerful economy in the world and only shows signs of increasing its power.
Hey all, Alex here. Instead of the usual leftist tirades I usually post on here, I’m going to provide a list of other people’s leftist tirades.
But seriously, I’m going to a list of some great books available for you to read either online or in the Foley library.
Recommended Readings:
Does Capitalism Have A Future by Immanuel Wallerstein, Randall Collins, Michael Mann, Georgi Derlugian, and Craig Calhoun. Available online for Gonzaga students at http://site.ebrary.com/lib/gonzaga/detail.action?docID=10793535
I picked this book specifically for Wallerstein’s part in it. He provides a solid case that we may be living at the end of the capitalist system, but makes a point that he doesn’t know what will follow it. It’s only roughly 40 pages, and it’s not a hard read. However, it’s full-to-bursting with great analysis and commentary.
The Communist Manifesto by Karl Marx and Friedrich Engels. This book is everywhere, but in the library you’d find it in the HX section, which is in the farthest corner from the stairs on the second floor.
This book is arguably the most important book written in the nineteenth century. It has inspired revolutions and reformation, and its influence can be felt throughout modern political thought of all stripes. Even better, it’s also very short, being roughly 45 pages.
Marx for Beginners by Rius. A PDF of the book is available here.
Karl Marx can be notoriously difficult in his writings without Engels. Rius does his best to give an introduction to Marx for people without a MA in philosophy. It’s not too long, but is longer than the other two. However, it’s not difficult.
Those are a few quick books I wanted to recommend to people in order to help people understand leftism a little better than I can explain it.
Income inequality has grown to the same levels we saw in the Roaring Twenties. Is there a solution to this? Leave your thoughts in the comments.
In the United States, we’ve witnessed a return of the Roaring Twenties—for the past three and a half decades.
As Emmanuel Saez and Gabriel Zucman show, the share of wealth (defined as total assets, including real estate and funded pension wealth, net of all debts) held by the top 0.1 percent of families is now almost as high as it was in the late 1920s.
The opposite side of the wealth coin has been an erosion of wealth, beginning in the mid-1980s, among the middle class and the poor. By 2012, the bottom 90 percent of Americans collectively owned only 23 percent of total U.S. wealth, about as much as they owned in 1940.
According to Saez and Zucman,
The growing indebtedness of most Americans is the main reason behind the erosion of the wealth share of the bottom 90% of families. Many middle-class families own homes and have pensions, but too…
View original post 426 more words
Continuing the debate on capitalism (and as a prelude of answering the question about what can exactly be defined as”progress” and whether we are solving the major problems in the economy in the correct fashion), first we must delve into the ethical arguments underlying all economic considerations.
This post will discuss the ethical concerns of capitalism and socialism, while also touching upon the effects of Christianity on ethics and how that relates to economics. Now, before you go all establishment clause on me, understand that I study at a Catholic university and thus, Christianity relates to a majority of readers. Additionally, Western ethical and moral values rely heavily on Christianity in their historical development. So even if you are atheist or agnostic, or even Jewish, many of your morals have a strong Judeo-Christian heritage.
Let’s start with the Christian concepts of market economy. According to Carl-Henric Grenholm, an ethics professor at Sweden’s Uppsala University and publisher of the academic article, “Justice, Ethics, and Economics,” there are four different Christian evaluations of the market economy– the first being Christian social conservatism. Christian social conservatives “accept a capitalist system with a market economy and private ownership of the means of production.” However, they also acknowledge “the market should not be completely free and unregulated.” Essentially what Professor Grenholm explains is that people all have an equal value, but are inherently different in productivity and function and thus the distribution of goods should also be different. These economic beliefs are “based on the Christian doctrine of creation.” Christian social conservatives hold that God’s will is expressed in his creation. And it is accepted as well that God’s creation is naturally a hierarchy. Man is greater than beast which is greater than plant which is greater than dirt. Therefore, the economic sphere must follow this pattern. Under this branch of Christian economic theory, economic distribution is also a hierarchal system.
Following these Christian concepts, Christian neoliberalism is a “defense of a capitalist society with a pure market economy and a private ownership of the means of production.” This Christian view of neoliberalism parallels the view of pure capitalists, even up to the ethical justification. “Christian neoliberalism is combined with the idea that justice is an equal distribution of individual liberty and autonomy.” Christians who fall under this category believe that human beings, regardless of religious belief, have dignity, which is exercised in their liberties and freedom. They assert that state intervention in private entrepreneurship abridges the liberties and freedom of the people and therefore disrespects human dignity.
On the left side of the political spectrum, we have Christian socialism. Christian socialists “argue in favor of a democratic socialism and they critique a capitalist society.” As previously stated, this ideology tends to be more liberal than social conservatives and neoliberals, specifically because they Christian socialists define justice “as a radical change of social institution which makes possible an equal distribution of welfare and power.” Thus, Christian socialists believe that the love revealed through Christ corresponds with an equal value to humanity. Where they differ from the more conservative social ideologies lies in the economic actualization of that belief. Whereas Christian conservatives and neoliberals believe equal opportunity, Christian socialists believe in equal outcome.
Going to a more moderate viewpoint, Christian social liberals “strive neither for laissez-faire, nor a socialist society.” These Christians find a balance between the two ends of the spectrum. They believe that the “state has an economic responsibility to promote social welfare and justice… (but) a market economy is necessary to generate economic growth and to allocate scarce resources.” Most Christian social liberals accept a market economy, but call for government regulations as needed. The ethical argument is that Christian love does not directly apply to the economy, but can be modified to call for some regulation as well as a free market. This viewpoint is the most moderate (most would consider it just slightly left-wing) of each argument on the political spectrum, with Christian neoliberalism furthest right and Christian socialism furthest left.
Now comes the real question, who is MORE moral, the socialist or the capitalist? I’m guessing the answer to this question varies widely, and I know that I am personally pro-capitalist because I believe that equality of opportunity is more moral than equality of outcome. However, instead of elaborating further on the post, I want to open up the question to the readers. So, readers, who is the angel and who is the demon? Choose wisely. But first, here is a nice little visual to ponder (yes, it is pro-socialist, I know, that’s the point).
Captain Capitalist signing out.
The goal of this post is to a) counter Alex’s brief definition and summarization of socialism and b) allow for readers to have a more in depth understanding of capitalism in order to facilitate mor eeducated discussions.
Capitalism, as defined by Google, is “an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state.” Many people prefer to call capitalism “economic individualism.” The basic premise of capitalism is that the pursuit of self-interest is not only legal, but encouraged. There is little to no limit regarding the margin of profit, the number of workers, or the scope of a company’s operations. When put into practice, a capitalistic society essentially renders the government incapable of directly impacting the economy. Now, don’t get me wrong, a government is necessary to create a (relatively) peaceful and functional society, and complete removal of governmental influence in the economy is risky; the goal of modern and more moderate capitalists is to limit what powers the government has over the economy.
Capitalism first became prominent during the Industrial Revolution. In 17th century England, large factories became the beneficiaries of the capitalistic society. These factories, which hired many women and children, often faced harsh criticism because of their poor work environment, long hours, and low wages. However, many of these factories also provided a place for the workers to live. Also, the life of a factory worker was far better than the alternative. Previous to factories, a majority of children were needed on the farm, sent to parish poorhouses, or became beggars to provide some sort of income for their families. The notion that capitalism created a large population of poor individuals ignores the fact that the rise of capitalism correlates with the rise of population density. Perhaps the poor were not more numerous, but simply more visible.
In short, capitalism trusts the regulation of the economy to the individual. A key aspect of a free market is the understanding of the relationship between company and customer. In order to maintain a steady flow of customers, a company must aim to please. There are numerous ways a company can please customers. But the idea is that a company exists to make money. And in order to make money, customers must be satisfied with the company, its services, its employees, and its reputation. Therefore, a company cannot afford to take advantage of customers, because they will quickly go out of business.
I hope this improves your knowledge of capitalism and/or answers the question, “Why capitalism?” This is a barebones post, but it introduces the ideaology of a capitalist and that is what I wanted to do.
And thus I leave you, but first, in light of Halloween being just around the corner, here is a video that does not necessarily have to do with capitalism, rather it addresses taxation, which certainly has some effect on the economy. Enjoy!
This piece on income inequality comes from the Real-World Economics Review Blog. It’s a short piece about where income inequality comes from, and why growing income inequality is slowing economic growth.
Alex, I liked your post a lot. It’s by far the most interesting thing on this site yet. That said, I have a problem with the comic you posted.
Here it is for those listeners just joining us.
Now, this rebuttal has two parts that start off together, fall apart, and then come together again, so I hope I can articulate it well enough to be understood. My problem is with the caricature of the ‘capitalist’. Pretty much since the beginning of socialist theory, the capitalist has been shown as a fat, florid man in a long coat. He is the consumate useless dandy, existing only to be needlessly cruel to his put-upon workers.
First of all, I don’t think that this is fair. I think that if you look at small-business owners (capitalists in their truest form) you generally see hardworking people attempting to better themselves. It’s interesting how socialism is inclined to see the good in humanity, provided that humanity isn’t rich. So yes, the view of the capitalist as the English industrial revolution factory owner is propaganda, designed to propagandize rather than reflect the true nature of the social group.
Next, my issue is with the comic’s understanding of Marxist theory. I don’t pretend to be an expert, so Alex I’d be grateful if you could respond to this with any corrections that need to be made, but as far as I understand it, Marx coined the phrase ‘surplus value’. He said that goods gained a value above that of the base materials and the wages paid to the workers (without this extra value, there’d be no point of any exchange), an added value that can only come from labor.
He then provides a ‘negative proof’: a proof based entirely on simply eliminating the other possibilities. He says that the value of a good simply reduce to ‘dated labor’ eventually. Other economists have argued this point, showing the logical inconsistencies in that (for instance, the premise that ‘product zero’ was simply conjured from thin air through labor), but for the sake of argument we will accept it.
This brings us to the bottom left panel of the comic. The helpful inquisitive asks where the man got the funds to buy his machines, to which he responds that he bought them using the workers’ labor. This is absurd. It simply isn’t how capital is created. If anything, he garnered the funds by taking a loan or gaining financial backers. Furthermore, if we allow that he did use his workers to make a good that he then sold and bought machines, then we must ask where the raw materials came from that the workers used. At the end of the day, the capitalist did something to come up with the capital to make the good, and therein lies his value. He isn’t being paid $75 to yell at his workers, he’s being paid $75 dollars to obtain capital.
Thus, rather than portraying the capitalist as a florid man in a suit, I think it’d be more accurate to have his face smudged just as much as his workers, because he’s just as integral to the system.
Zagonomics 