Capitalist Contradictions

The Collapse

Microsoft just received a patent for “a method and system in a document viewer for scrolling a substantially exact increment in a document, such as one page, regardless of whether the zoom is such that some, all or one page is currently being viewed”. In other words, for page up and page down buttons!!

How many hours and how much money were wasted on this?

Roberto Mangabeira Unger is Brazil’s Minister of Strategic Affairs, and he is searching for a new ways to think about economics.

Our world seems to be lacking in ideas of how to improve our economic lives: socialism seems to have produced dead ends (except perhaps in healthcare) and capitalism seems to favor smaller and smaller percentages of our populations.

Unger is lookig for alternatives. Here are a couple of paragraphs that appealed to me from Adbuster’s wonderful article:

Growth would not come from big business then, but from Brazil’s small enterprises. Instead of a tiny business elite dropping crumbs for the country’s poor, a broad middle class of small business entrepreneurs would form Brazil’s engine of growth. These small enterprises would get access to the credit and tax benefits that big businesses more typically enjoy. The benefits of the market should be shared broadly, not monopolized by big business

In a way, the idea is very much free-market orthodoxy. Economic decisions would be made on a smaller, more local scale. Individuals know what’s best for themselves and should be encouraged to pursue their own self interest. Why should people cede control of their own destinies to large, distant institutions, be they government, corporations or the World Bank? By giving individuals the tools and freedom to succeed, they can take charge of their own prosperity.

The recent demonstrations in South Korea against the importation of American beef reminded of this fact, reported today by Paul Krugman, talking about the discovery of mad cow disease in the US in 2003:

One amazing decision [by the Dept of Agriculture] came in 2004, when a Kansas producer asked for permission to test its own cows, so that it could resume exports to Japan. You might have expected the Bush administration to applaud this example of self-regulation. But permission was denied, because other beef producers feared consumer demands that they follow suit.

Don’t you just love “conservatives” who believe in the “free market”?

I almost always enjoy reading Ben Stein’s columns in the NY Times Business Section. He seems honest and is frustrated by some of the same shortcomings of capitalism that bother me (e.g., the fact that shareholders - the putative owners of corporations - seem to have little influence over the executives getting so rich off of organizations that they don’t own).

Yes, Stein is a Republican and I’m a Democrat. Stein admires Ronald Reagan (”I love and worship him”), and I do not.

So, when I saw a new article by Ben Stein in this morning’s Times entitled “What McCain Could Do About Taxes”, I started reading it in anticipation of finding something interesting. Stein did not disappoint.

Stein quickly gets to the heart of what’s wrong with US fiscal policy:

The … Republican Party (my party and yours) has for the last 30 years or so been operating under a demonstrably false and misleading premise: that tax cuts pay for themselves by generating so much economic growth that they replace the sums lost by tax cutting.

What can we do to fix our situation, which is, in fact, fairly scary? Stein sees two choices:

1. “…You can just keep up the (latter-day) Republican game of make-believe”.
2. “Or, you can raise taxes.”

Whoa! Are you sure you’re a Republican, Mr Stein?

Stein believes that the Bush tax cuts raised the GDP by “roughly 30 percent”.

A liberal would have probably agreed but added that the tax cuts had almost no effect at all on the incomes of about 95 percent of Americans. Stein is clearly aware of this because - wonder of wonders - he proposes that we significantly raises taxes on the very rich “because that’s where the money is.”

Now if we only had Republican politicians who were as honest as Ben Stein, and maybe we could get some bipartisanship.

According to The Wall Street Journal, Bill Gates

has grown impatient with the shortcomings of capitalism. He said he has seen those failings first-hand on trips for Microsoft to places like the South African slum of Soweto, and discussed them with dozens of experts on disease and poverty. He has voraciously read about those failings in books that propose new approaches to narrowing the gap between rich and poor.

In particular, he said, he’s troubled that advances in technology, health care and education tend to help the rich and bypass the poor. “The rate of improvement for the third that is better off is pretty rapid,” he said. “The part that’s unsatisfactory is for the bottom third — two billion of six billion.”

The Better Business Bureau reports that

The first-ever BBB/Gallup Trust in Business Index survey found that nearly one in five (18 percent) adult American consumers say their trust in businesses that they regularly deal with has decreased in the past 12 months, more than twice as many who say their trust increased (8 percent). The survey also found that less than half of American consumers (49 percent) say they have a great deal (12 percent) or quite a lot (37 percent) of trust in businesses that they regularly deal with.

This decrease in trust coincides with an increase in complaints to the BBB.

Steven Cole, president and CEO, Council of Better Business Bureaus, said, “There are many contributing reasons for this bad news – recent toy recalls, the sub-prime mortgage and foreclosure crisis, well publicized ethics lapses and criminal violations, and a long period of what many experts see as declining customer service. But whatever the causes, if we care about the health and prosperity of our nation, we had better address trust issues immediately.”

Missing from the BBB article is any mention of government regulation.

Government regulation has a role in consumer trust. Look at this roll of labels, intended for milk.

As of January 1st, 2008, the state of Pennsylvania will ban milk labels with phrases such as “contains no artificial hormones”, “pesticide free” and “antibiotic free.”

If you were a milk consumer in Pennsylvania, would your trust of milk companies increase or decrease in 2008?

Today’s New York Times describes a report comparing the prices of electricity in states with and without rates set by state governments.

Guess what?

The difference in prices charged to industrial companies in market states compared with those in regulated ones nearly tripled from 1999 to last July…

“Since 1999, prices for industrial customers in deregulated states have risen from 18 percent above the national average to 37 percent above,” said Mrs. Showalter, an energy lawyer and former Washington State utility regulator.

In regulated states, prices fell from 7 percent below the national average to 12 percent below, she calculated.

SCO has filed for bankruptcy! Woo Hoo!

SCO is the company that claimed to own linux in spite of the fact that thousands of people had created it. MicroSoft supposedly bankrolled SCO for awhile in an attempt to derail linux.

I’ve been too preoccupied to write up this idea myself, so I was delighted to find this article on how our government has outsourced its own functions.

“Outsourcing” jobs overseas is only the tip of the iceberg. How about the CheneyBush Administration “outsourcing” our military, our intelligence-gathering, our nation’s soul?