Sundin column: The rise and fall of capitalism
Modern Capitalism arose in the expanding merchant trade of the 16th and 17th centuries. Capitalism grew rapidly in the late 1700s, driven by the Industrial Revolution and the rapid expansion of manufacturing and mining and the resulting transportation needs for moving large quantities of raw materials and manufactured goods.
Growth continued for 250 years until Capitalism nearly succumbed in the worldwide Great Depression of the 1930s. The disastrous effect of the Depression on the world economy caused a loss of faith in Capitalism, leading to the rise of Communism and Fascism as alternative economic systems. But World War II breathed new life into Capitalism and resulted in the demise of Fascism. Since then, Capitalism has become the dominant economic system throughout the world, and Communism has been in decline. Even China, once a bastion of Communism, has adopted elements of Capitalism.
Capitalism has produced a world exceeding our fondest dreams of just half a century ago. It has rewarded us with the highest standard of living and comfort mankind has ever known and breakthroughs in medical science that have extended our life span by decades. It has revolutionized travel, and created electronic wonders in automation, communication and computer capabilities.
But Capitalism is not perfect and has a darker side. Though the Supreme Court has declared that corporations are “persons,” they have not shown themselves to have a soul or a conscience or compassion, but instead, they often reflect the rapacious greed of their CEOs and boards of directors. This reached a peak in the late 1800s when the “Robber Barons” (John D. Rockefeller, J. P. Morgan, Andrew Carnegie, Andrew Mellon and Jay Gould, to name a few) had a stranglehold on the American economy and built massive empires and accumulated unprecedented wealth by exploiting their workers and resorting to unscrupulous business practices. Because of their wealth and resulting political power they controlled Congress and the Presidency to further their interests over those of the American people, which Thomas Jefferson foresaw and feared would happen.
Corporations are focused primarily on protecting and increasing their profits, too often with little or no concern for either their employees or the public who purchases their goods and services. Recently Epipen’s CEO jacked up the price of a medication on which many people depend to six times what it had been. This may be an extreme case, but it is indicative of corporate behavior. Tobacco company executives parroted one another before Congress claiming that their product was not addictive while knowing full well that they were selling death. Now the fossil fuel industry denies the effect of burning fossil fuels on the future livability of our planet.
Professional sports is a master of fleecing the public. It gets cities to tax the public to pay for the sports palaces from which the owners and players profit handsomely. Watching sports on TV is not free; we are all paying for it in the products we buy whether we watch or not. The industry’s profits are so enormous that the players have cut themselves into obscene salaries. These excesses are supported by the high prices charged for televising rights, which are passed on to the advertisers in what they pay for commercial time. Those costs are passed on to the public by being added to the prices of their products and services. And do the multi-million dollar stadium naming rights go to the cities? Oh, no. They go to the team owners.
Today, Capitalism has entered a new era with industry creating ever-increasing profits by replacing labor with automation. Robots work 24 hours a day, seven days a week, don’t take vacations or holidays, and don’t have any health care or retirement costs. As a result, profits and the stock market are up, but wages have stagnated, as nearly all of the profits have gone to the wealthy. The economic divide between the working class and the wealthy has become excessive, and once again Corporations and the wealthy have taken control over Congress, abetted by nearly 10,000 lobbyists with full pockets. As Will Rogers said, “We have the best government money can buy.”
With robotics increasingly eliminating jobs, how many are going to be able to buy what industry produces? Capitalism may become a victim of its own success. Capitalism itself may ultimately face a dead-end future because it is dependent on producing ever more products for ever more people from a planet with finite resources. It can’t go on forever!
“As I See It” appears on the first Thursday of the month. Hal Sundin lives in Glenwood Springs and is a retired environmental and structural engineer. Contact him at firstname.lastname@example.org.