Social injustice is rooted in economics. In order to effectively fight for social justice, you need to understand how capitalism works. What I know about economics and capitalism is a result of life experience and Econ 101A, a class I had to take in college back in the 70’s to fulfill a liberal arts requirement. I always aced the multiple guess exams because like most college students at that time I did a lot of speed, stayed up all night, memorized everything, and then regurgitated it the next day. This fucked up the grading curve upsetting the boys majoring in business who would mutter amongst themselves and glare balefully at me in the dining hall. Not that I cared, I was too busy cramming for the next exam so I could keep my grades up and my mother wouldn’t kill me.
The fact that I remember anything from Econ 101A is not so much a minor miracle as it is the product of a selective and photographic memory. Ideas held vibration for me, if it held suspended in air, it was a clue and I was always looking for clues even though I wasn’t sure of the puzzle or the mystery I was trying to solve. The point was I knew I was in the process of solving something and that process was important, more important than the result. This has been a life long theme and is probably why I live on the lower end of the economic spectrum.
What I was taught: Capitalism is an economic system based on private ownership; the means of production, distribution, and exchange of wealth is controlled by private individuals and corporations. Since this has never made any sense to me I decided to do what I always do when I don’t understand something; I draw it, do a lot of research, and then I attempt to translate the language of the ‘thing,’ into look-Spot-see-Jane-run simplicity. As most of the women I know, young, middle-aged and old, don’t have a clue how capitalism works and has worked over the years, they’re curious but too embarrassed to ask questions for fear of appearing dumb, I decided to share my drawing and discoveries. It works quite well as a blueprint and should answer any questions you might have; questions, given the state of things, it’s probably a good idea to be asking.
First I drew a stick figure and wrote owner, then I drew a square and wrote factory, then I drew a bunch of little stick figures inside the factory and wrote workers. Someone has to loan the owner money to buy the stuff for the workers to use to make a product; that would be a bank or investors. I drew two more squares and labeled them accordingly. Both bank and investors expect a return on their money, meaning they expect to make more money than the money they’ve invested, this is called profit. The owner of the company also expects to make a profit. The workers just expect to make a living wage
The workers get to work making (manufacturing) let’s say, mascara. (Just so you know a company that makes something is called a manufacturer.) To make the mascara the workers use ingredients bought and paid for by the owner of the company with the monies from the bank and/or investors. I drew another square and wrote ‘ingredient company,’ and drew little workers inside. The ingredient company actually competes with other ingredient companies who also want to sell their ingredients to the mascara company. More squares, more workers. It’s a level playing field, meaning everybody has the opportunity to compete for the job and to set a competitive price for the job. The owner of the mascara company chooses the company that offers him the best service, quality, and price, and promises to employ his wife’s errant nephew. The losing companies go off in search of another mascara company that might need their ingredients.
The mascara workers are paid wages, also know as income, for their efforts, also known as work or a job, and their efforts begat many, many tubes of mascara. Now the product, the mascara, has to be sold to a store, which will actually sell it to the consumer; namely you and me. This is the job of the company sales force; it also has to be packaged and shipped to the store that buys it. Three more squares filled with stick workers. To determine the cost of the mascara to the retailer, that would be the store or company that is actually going to sell the mascara to the customer, namely you and me, the cost of the ingredients, the workers salaries, the cost of packaging, the cost of shipping, and factory operating costs, must be added together. Then that figure is doubled or doubled and a half, or tripled, so the owners, banks, and investors can cover the costs of manufacturing the mascara and make a profit. This figure is called the wholesale price. Then the retailers, the store where you’re going to buy the mascara, will double, or double and a half, or triple the wholesale price and come up with yet another figure, the one you’re going to pay for the mascara, which will cover their costs and make them a profit. Like the manufacturers retailers also have bank loans and investors who expect to a return on their money, to make a profit. I’m sensing a pattern here. The workers just expect to make a living wage.
The people who buy the product from the retailer are the workers. In order for capitalism to work the workers have to use their wages, also called income, to buy. There can be no profit for any manufacturer, retailer, bank, owner, or investor period unless the workers are using their income to buy. This is why credit cards came into being so workers could pay for the products they were buying with money they didn’t actually have but would have further down the road. Credit cards meant more purchases; more purchases, more profit. Credit isn’t free, it has interest, meaning you pay the credit card company real money to use their fake money. Because of interest you are actually paying more money for a product than its actual price. This is how the credit card company makes a profit. Credit card companies and banks are in cahoots with each other because banks extend credit to credit card companies and the credit card companies pay them interest for the favor. Banks are institutions where workers deposit their wages in checking accounts; the banks then use that money to lend and invest and make more profit. That banks change workers for the privilege of using their money makes no sense at all and is one of the myriad reasons I don’t like banks.
Now, since the owners and retailer’s profit depends on the purchasing of product by the worker, it’s very important that the product render itself obsolete after a period of time so that it can be replaced by a new and better product(s). This is why it’s important not to build anything that actually lasts because you will either destroy or slow down your profits. This is called planned obsolescence. Planned obsolescence is behind the advertising concept that newer is better. New coke comes to mind. If you’re under fifty-five and don’t remember new coke you should look it up.
Looking at the blueprint it is patently obvious that capitalism is a profit driven system and that every square’s survival is dependent on the survival of the other square. One person’s income, one person’s work, really is dependent on the existence of the other, which is actually kind of cool and pragmatic proof of the spiritual axiom that we are all interconnected. The other thing that is patently obvious is the ability to compete is the key to success. Enter the Economic Expert who looks an awful lot like Snidely Whiplash. He takes one look at my blueprint and says, we can make way more money if we knock out three quarters of these squares and then put the rest in one big square. But then the people won’t have any work Mr. Economic Expert, I say in my best Nell voice. How will they pay the rent? How will they eat? How will they feed and clothe their families?
From the beginning corporations were big fat greedy bullies, hence the name ‘fat cat.’ The late 1800’s and early 1900’s come to mind. I actually remember this from high school because it was one of those things that held vibration, that held suspended. What the corporations, also called monopolies or ‘trusts,’ decided to do was take over and control various industries. Let’s use the mascara factory as an example of how this works. For a corporation to take over and control an industry first they have to buy up all the factories of a particular product, in this case mascara. Once they own all the mascara factories they can set the price they want to pay for the ingredients because they’re the only ones buying the ingredients. So much for competition and a level playing field. The only mascara ingredient company that can survive is the one that accepts the ridiculously price set by the corporation so all the rest of the ingredient companies go out of business. Since the price set for mascara ingredients will be quite low, in order to keep costs down and make more profit, the ingredient company has to lay off workers just to break even. Eventually the ingredient company will either be forced into bankruptcy or have to sell the business. The mascara corporation then buys the ingredient business for next to nothing. Now they’re the only manufacturer of mascara and they own the only business and the source, which provides the ingredients. They literally pay themselves for what they buy from themselves and in so doing invest in themselves and make even more profit. Now you know why corporations were called monopolies because they monopolized every aspect of a business. Again, when you monopolize every aspect of a business, you can set the price.
Working conditions for factory workers during the 1800’s and early 1900’s were so horrible they trump the sweatshops it’s so politically correct to rail against today. The 1911 Triangle Shirtwaist Factory fire comes to mind where the workers, all women, couldn’t escape when fire broke out because the managers had locked the doors to the stairwell and exits to keep the workers from leaving early. The factory was on the eleventh floor; the women either burned or jumped to their death. Upton Sinclair’s book, ‘The Jungle,’ held page after page of the horrors of Chicago’s stockyards. He wrote that dead rats were routinely shoveled into sausage grinding machines, inspectors looked the other way when diseased cows were slaughtered for steak, and filth and guts were swept off the floor and sold as potted ham. The American people were as horrified by corporate factory conditions as they were by the fact that merging corporations becoming monopolies were quite literally eradicating millions of jobs and small businesses. (Think of the squares and the workers in the squares, think of the economic expert wiping ¾’s of them out.) Small businesses were the backbone of American life; nothing was more representative of the American entrepreneurial spirit than small business, that’s why all of Europe was immigrating here. As for the factory conditions, it was everything America was NOT about. “Give us your tired your poor, your huddled masses yearning to be free.” Muckrakers, like Upton Sinclair, raised the indignant hue and righteous cry and the Progressive movement and unions were born.
The government stepped forward and wrote new regulatory legislature that established regulations that broke up the monopolies and the first health hygiene standards for industry. The unions guaranteed safe working conditions and a living wage for the worker. In other words the government put regulations into place to protect workers, consumers, and small business; laws that guaranteed a level playing field, meaning the ability to compete, and that we weren’t buying potted ham that was actually shit from the slaughterhouse floor mixed with a touch of entrails. Unions would be the tool for enforcing the regulations. Just so you know muckrakers were the Progressive movement’s Woodward and Bernstein. If you are under fifty and don’t know who Woodward and Bernstein are, I suggest you look them up, that, and definitely “give us your tired, your poor.”
Corporations have been steadily, systematically, and successfully working to destroy unions and undo the regulations that broke up monopolies since they were passed. People who support this way of thinking are called, Republicans. They are also called the 1%. Not that there aren’t poor people and blue color workers who are Republicans, there are, that’s the surefire success that comes with slashing funds for education. In June, 2010, the Republican owned Supreme Court Supreme Court ruled that a corporation is a person and can give as much money as they want, to their chosen candidate. Thus the candidate is beholden to the corporation for backing his campaign—the candidate is in the corporation’s pocket. Keeping in mind that we live in a capitalist society and the point of investing money is profit, corporations backing certain candidates are going to expect a return on their investment. So if you’re wondering why humane social policy, women’s reproductive freedom, and environmental and agricultural laws are being eviscerated and right wing religion is making a remarkably influential reappearance, simply follow the money.
Big government has been spun to stand for whiners, welfare cheats, illegal immigrants, bleeding heart liberals, and tree huggers; small government has been spun to stand for the America of old, when an honest days work brought an honest days pay. The reality is in the American of old an honest days work did not get you an honest day’s pay until the government stepped in and established regulations to curb the profit driven greed of the fat cats, that would be the founders and creators of corporations/monopolies, and the unions stepped in to guarantee the American worker a living wage and safe working conditions.
There is no good reason for the people to be serving, to be on their knees, to the economy. The economy is man-made; it can be unmade and re-done to serve the people. At this point in time an economy based on sustainability, rather than fossil fuels, is the obvious beginning. The narrative though, continues to be controlled by the fossil fuels, and the thrust of that narrative is that we the people can either have a healthy environment or jobs. That is the argument you see on T.V., among the talking heads, and it's called colluding. As long as the people don't know how capitalism works, the lies will win.
Live loud, love fierce, and suffer no fools.
Katherine Manaan MAWT
Lefty, feminist, progressive, pro-choice, pro-humanity, pro-environment, anti-corporation, resister.....