By Henry McRandall
It becomes more evident with each passing day that Karl Marx was right in predicting that not only the excesses but also the very success of corporate capitalism would someday prove to be the seeds of its ultimate demise.
Although true Marxism has thus far failed to captivate the minds and loyalties of a majority of humankind, the economic philosopher who evolved it at least was right in diagnosing the fatal flaws in coproate capitalism.
The corporate capitalist philosophy that has dominated most of the world for centuries may now be irretrievably marching toward its own doomsday.
If the Twentieth Century was the apex of corporate capitalism, the Twenty-first Century may be its nadir.
The Twentieth Century saw much of the world advance toward relative opulence after millennia of harsh struggle.
It happened partly because investors were interested in creating real new wealth and because workers fought mightily to get a fairer share of the fruits of their labours.
The capitalist class reluctantly accepted that the continued growth of their own wealth depended in large part on the evolution of a prosperous consumer market for the goods and services corporations were now capable of producing. Hence the development of a large middle class and a largely well-paid working class in North America and much of Europe.
And even a cursory study of economic history over the course of the Twnetieth Century teaches that the economy functions best when the share of national income enjoyed by the top one percent of income-earners does not exceed six percent of all income.
At that level of national income held by the top one percent, there is a tendency for everyone to do relatively well. But when the income of the top one percent rises much beyond that six percent, everything starts to fall apart. Unemployment rises, real wages fall, government revenues and social spending fall, consumer spending falls and, ultimately, there is either a debilitating recession or a devastating depression.
As long as the extremes of wealth and poverty were contained within reasonable bounds, there was real economic progress.
But something happened 30 years or so ago that led to a long-term deviation from the most productive economic norms and that deviation is what caused the global economic meltdown of 2008 and beyond and that continuing deviation is what is now threatening to implode the entire global economy.
In the early 1980s, the unholy trinity of Margaret Thatcher in the U.K., Ronald Reagan in the U.S., and – on a pipsqueak level – Brian Mulroney in Canada came to power and began dismantling the established productive economic order.
Reaganomics became the flavour of the generation and the lunatic theory that if governments throw enough money at corporations and the rich some crumbs would inevitably get brushed off the banquet tables of the socioeconomic elite and onto the floor for the masses to eat or snort up became nascent.
The prescription for producing these results was myriad – ever-lower taxes for corporations and the wealthy; ever-lower government spending on health care, education and social programs; ever-less corporate regulation; “free trade” on corporate terms; ever-lower wages for the middle class and the working class; and ever-lower supports for the economic victims of corporate capitalism.
All the essential elements of the prescription were enacted. But guess what? There was no trickle-down.
Over the past 30 years, the top one percent’s share of the national economic pie in the U.S. has soared from six percent to more than 14 percent. And the pattern has been similar in Canada and, increasingly, in the European Union.
The wealth of the wealthiest did not soar because they were creating real new wealth for the economy as a whole but rather because they were simply appropriating for themselves a larger share of the wealth that already existed.
The U.S. Bureau of Statistics recently reported that the bottom 50 percent of Americans now own less than one percent of the nation’s total wealth and that the top one percent now own more than 50 percent.
That means that, on average, the top one percent of Americans now own more than 25,000 times as much as each of the bottom 50 percent. No one deserves 25,000 times as much as anyone else – in some cases hundreds of thousands of times as much.
It also means that in a country still largely immersed in racism, bigotry and discrimination, the unemployment rate among black men aged 21 years and over is a startling 51 precent. And if you include black males younger than 21, the unemployment rate for black men in the U.S. is a morally repugnant 56 percent.
But as bad as things are now for the American masses – the poor, the working class and the middle class – they will inevitably get much worse.
That’s because corporate capitalism no longer seems either willing or able to create significant new real wealth. And, in an economic system based on ever-growing gaps between rich and poor, the only way the billionaires and mega-millionaires can continue to get richer is if the masses continue to get poorer.
You can only squeeze so much out of a dried-up prune. When there’s nothing left for the billionaires and mega-millionaires to either destroy or steal from the masses without causing social revolution, then the corporate capitalist game will be up.
The killer crisis of corporate capitalism?
By Henry McRandall