Our political model won’t change until our economic model changes

The American populace has become infamous for how divided it is on how it expects its government to operate. However, the country is united almost unanimously on the position that political change is needed. As the country devolves into near civil war over the fringe issues its politicians feed the people to squabble amongst each other over, it’s becoming more and more imperative to understand that practically any political change is unlikely to have any significant longterm effect on the quality of life in America until the standard economic model is revamped.

In order to understand why this is you have to first understand that America’s economic model is more accurately described as “predatory capitalism” as opposed to simply “capitalism.” Predatory capitalism is based on 2 fundamental operating principles:

1. Pay workers as little as possible within the limits of supply and demand.

2. Charge customers as much as possible for goods and services within the limits of supply and demand.

These two simple principles will cause ripple effects that will multiply themselves over time. The fist and most obvious effect is that the nation’s wealth will trickle upwards, making the rich richer and the poor poorer. Once the rich become rich they’ll be able to reinvest that wealth making them richer and allowing them to expand their control over the economy. Once the poor become poor it will take longer for them to work their way out of poverty or compete with the rich to establish competitive businesses. The longterm effect of this is exactly what you see in America: major chains, owned by the rich, worked by the poor. It will be almost impossible for all those minimum wage workers to open their own “mom and pop” business much less competitive retail chains. This problem becomes even worse the more land the wealthy own as the poor will not be able to afford their own land to build their businesses on.

Once the rich become rich enough to have millions or billions of dollars of disposable income they will be able to use that money to influence politics through financing the careers of pro-monopoly politicians either directly, through campaign contributions, bribery, lobbying, campaigning against anti-monopoly politicians and funding anti-monopoly, anti-worker propaganda. Again, this is exactly what has happened in America.

Now that America has passed this tipping point where a few wealthy individuals control the majority of the wealth in America, there is little point in political reform. What if a third political party were elected to office? What if abortion were legalized? What if marijuana prohibition was ended? What if net neutrality was secured? What if stricter environmental protection laws were passed? What if the privatization of education was ended? The reality of life for the average American would remain unchanged. As long as the economic model that robs the poor and gives to the rich stays in place the people will still spend their lives working 3 jobs just to stay alive. They would still be crippled by housing and higher education debt for the majority of their lives. The poor would still pass debt to their children. And the poor would still be dependent on the major corporations for most of their food, clothing, shelter and medicine.

And as long as the poor have no wealth to leverage their interests with the rich would still retain the economic power to shape the political landscape according to their predatory agenda. The solution to this problem is not legislation guaranteeing workers profit sharing or fair prices. The rich could still simply purchase legislation immediately or (if they wanted to be sneaky), slowly over time.

The only way the poor will have the access to a fair share of the nation’s wealth is for business owners to willingly give their workers profit sharing, fair prices and, preferably, on-site housing at their place of work. Unfortunately, it’s unlikely that this will happen in a predatory economy as business owners will be inclined to try to extort as much money as they can from their workers and customers in order to remain competitive against other ruthless companies.

That’s where courage and foresight come in to play. Existing business owners need to be encouraged to treat the people within their sphere of influence with the dignity and respect due to every human being. Barring that, the poor need to pool their mental and physical resources to open and support business that don’t practice predatory capitalism. Barring that, the poor can always exercise the leverage of boycotting and striking, but this is unlikely to happen since the wealthy have already shaped the economic and political landscape so that it’s extremely difficult to unionize or avoid buying from corporations.

So the most productive course of action for the poor at this point is to start and support their own egalitarian businesses. Once they do that they can begin accumulating their own wealth (and thus leverage), reduce dependency on predatory businesses  and enjoy a decent quality of life without being treated like slaves.

If you liked this post, you may like these: 

Macroeconomics

Microeconomics

Issues in the Workplace


3 responses to “Our political model won’t change until our economic model changes

Feel free to leave a comment.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: