My inner socialist
I have always been very supportive of both democracy and capitalism. For as long as I can remember, I've been interested in politics and these two ideas have really been the two pillars of my personal ideology. While I still have an unswerving loyalty to democracy... my experiences outside of America have somewhat changed my perspective on capitalism.
I still believe that capitalism is the best way of generating wealth. I believe that there is very good empirical evidence to show that. I also believe that the extreme alternatives to capitalism are much, much worse than our current system of exchange. That said, the way in which American capitalism (in its current form) works, has a lot of short comings.
My main problem with the last 20 years (and possibly longer) of American capitalism is this: to me it does not entirely seem to be capitalism at all, but either monopoly or oligopoly. The system is designed to keep out real, fierce, and democratic competition; it promotes the accumulation of excessive (and I feel indefensible) wealth for some, and immense poverty for others. Most Americans (but not all) are able to live in this world because they have more than others, and the costs are less for them.
According to the Census Bureau, the median income in 2007 was $50,233. For many people in Eastern Europe, that sum is a fortune. For instance, the average income for a starting lawyer in Bulgaria is roughly 600 Euros a month. That is roughly $10, 800 a year. And that is a professional; that is a GOOD salary. Yet is falls well below the federal poverty threshold in the US (which is $19,000). At the same time, many of the goods that are cheap in the US are MUCH more expensive over here. The same jeans that you can buy at Macy's or Kohl's for $20-25 dollars are often sold for between 50-100 Euros. That same price in dollars is $75-150. The same for movies, songs, and other copyrighted goods. Electronics such as computers, cell phones, iPods? All more expensive here than in the US, and yet the income is far less.
Now there are a few assumptions which have made this palatable for me: 1. The pace of reform in many of the countries have been poor and their reforms (at least now) often seem very poorly done (however, many of these reforms were crafted by American economists with the Washington Consensus). 2. Communist societies are seen as not working as hard, having been indoctrinated NOT to work under the communists. 3. If those people worked hard enough, they should be able to get ahead. 4. People around the world should be offered the same opportunities as Americans. It is hard work that makes the difference.
My opinion on that has been thoroughly shattered recently. I have met people here who are really hard workers, who have tried to take advantage of every opportunity afforded to them (including a western education), but have been left without the rewards that their efforts should have secured for them. If anything, they are in debt. There is something very unjust about that. For a while I did not entirely understand how people could afford to live off of these severely depressed wages and try to maintain a decent lifestyle.
In large part, my anger over this is that the companies which "make" these goods actually spend a very small amount for these goods which they then make an enormous profit off of. These jeans, shoes, and other items which cost so much here and in the US are actually produced for pennies in the countries that make them. If a pair of jeans costs 1 dollar to make and sells for $50+ here, the company makes a massive profit. They don't actually produce these goods, but they make enormous profits off of two groups of people who need more wages and cannot entirely afford goods that are being sold to them. These companies are really just middle men, who have grown wealthy off of the labor of others.
I feel that in a truly information driven, fully competitive society, these "middle men companies" would not exist. If the market worked properly, the goods would be sold as cheaply as possible to those who want to buy them. There is certainly the demand for these goods in Eastern Europe and certainly a need for them to be cheaper. It would certainly increase the spending power of the people here as well as in the US. It would also deflate the massive profits of those companies which are now so demonized in the US for their exorbitant profits.
I feel that a large part of this is (to a large extent) the way in which rich companies and interest groups have shaped the culture of law in the US. Patent laws were meant to allow a company the time to recover their investments in novel research and developments. However, they have been extended and broadened so that these laws are used as a bludgeon to keep out rival firms that could bring down the prices paid by consumers. Many companies such as GM and Ford bought of rival technologies and patents in order to squash them and any competition in their industry. In real capitalism, production would be more democratic instead of just the "Big 3" (which are now failing because they have failed to adapt to a new business environment). I disagree with the misinterpretation of the intent of these laws and with the subversion of the capitalist ideas which has brought stability and prosperity all over the world.
On a personal note, it is INCREDIBLY frustrating when you see people who are trying really hard and things are not working out for them. It's even harder when you know that these are good people. It's much, much worse when you see it happening to a friend. It is happening to a lot of my friends, both here and in the US, at the moment. I have a friend here who hasn't been able to find a job but still is going to have to find a way to pay off $7,000 in student loans. I have a friend in the US who may not be able to afford grad school because the amount of money he would have to take out in loans would be wayyyy to much for his salary. And either he never gets out of debt and does something he's passionate about... or he gets a corporate role that he won't like and will never use the degree he spent so much money to get anyway. And that's just two people. That's not to say all of my friends who have to make the choice between rent, food, and their student loan payment. There is an impoverishment of the American people going on here, where is the money going? To the Universities? Why exactly do they need to raise tuition 5-15% a year if inflation is between 1-3%? The credit companies? The rates are impossible. They are preying on the young and the ignorant.
For me, I care a lot about my friends. If someone was going through some hard times, they could certainly stay at my place until they got themselves back up. In a large part that's why I'm glad I'm from the families that I'm from. There is always something going on, someone staying over. I love cooking for people, I loving having people over, I love helping people. But no amount of letting someone crash at your place can help get someone out of $7,000 worth of debt or pay off $40,000 in tuition over two years. The rise of this debt in America has really taken on a new dimension. You can't just have someone move in until they get back on their feet: no matter what, you can't get the mill stone off their neck. There's no way I could give or loan a friend $40,000. Who even has that much money just lying around?! And that would only help out one person. So... maybe you can understand my frustration when I read about people complaining about not being able to afford their private jets. I just don't like feeling helpless while I watch my friends battle this out on their own. I have always tried to be generous to everyone around me when I can afford it. But who can afford this?
I can only hope that the world is in for some serious changes. There are a lot of them that need to be made to get us all back on track.
I still believe that capitalism is the best way of generating wealth. I believe that there is very good empirical evidence to show that. I also believe that the extreme alternatives to capitalism are much, much worse than our current system of exchange. That said, the way in which American capitalism (in its current form) works, has a lot of short comings.
My main problem with the last 20 years (and possibly longer) of American capitalism is this: to me it does not entirely seem to be capitalism at all, but either monopoly or oligopoly. The system is designed to keep out real, fierce, and democratic competition; it promotes the accumulation of excessive (and I feel indefensible) wealth for some, and immense poverty for others. Most Americans (but not all) are able to live in this world because they have more than others, and the costs are less for them.
According to the Census Bureau, the median income in 2007 was $50,233. For many people in Eastern Europe, that sum is a fortune. For instance, the average income for a starting lawyer in Bulgaria is roughly 600 Euros a month. That is roughly $10, 800 a year. And that is a professional; that is a GOOD salary. Yet is falls well below the federal poverty threshold in the US (which is $19,000). At the same time, many of the goods that are cheap in the US are MUCH more expensive over here. The same jeans that you can buy at Macy's or Kohl's for $20-25 dollars are often sold for between 50-100 Euros. That same price in dollars is $75-150. The same for movies, songs, and other copyrighted goods. Electronics such as computers, cell phones, iPods? All more expensive here than in the US, and yet the income is far less.
Now there are a few assumptions which have made this palatable for me: 1. The pace of reform in many of the countries have been poor and their reforms (at least now) often seem very poorly done (however, many of these reforms were crafted by American economists with the Washington Consensus). 2. Communist societies are seen as not working as hard, having been indoctrinated NOT to work under the communists. 3. If those people worked hard enough, they should be able to get ahead. 4. People around the world should be offered the same opportunities as Americans. It is hard work that makes the difference.
My opinion on that has been thoroughly shattered recently. I have met people here who are really hard workers, who have tried to take advantage of every opportunity afforded to them (including a western education), but have been left without the rewards that their efforts should have secured for them. If anything, they are in debt. There is something very unjust about that. For a while I did not entirely understand how people could afford to live off of these severely depressed wages and try to maintain a decent lifestyle.
In large part, my anger over this is that the companies which "make" these goods actually spend a very small amount for these goods which they then make an enormous profit off of. These jeans, shoes, and other items which cost so much here and in the US are actually produced for pennies in the countries that make them. If a pair of jeans costs 1 dollar to make and sells for $50+ here, the company makes a massive profit. They don't actually produce these goods, but they make enormous profits off of two groups of people who need more wages and cannot entirely afford goods that are being sold to them. These companies are really just middle men, who have grown wealthy off of the labor of others.
I feel that in a truly information driven, fully competitive society, these "middle men companies" would not exist. If the market worked properly, the goods would be sold as cheaply as possible to those who want to buy them. There is certainly the demand for these goods in Eastern Europe and certainly a need for them to be cheaper. It would certainly increase the spending power of the people here as well as in the US. It would also deflate the massive profits of those companies which are now so demonized in the US for their exorbitant profits.
I feel that a large part of this is (to a large extent) the way in which rich companies and interest groups have shaped the culture of law in the US. Patent laws were meant to allow a company the time to recover their investments in novel research and developments. However, they have been extended and broadened so that these laws are used as a bludgeon to keep out rival firms that could bring down the prices paid by consumers. Many companies such as GM and Ford bought of rival technologies and patents in order to squash them and any competition in their industry. In real capitalism, production would be more democratic instead of just the "Big 3" (which are now failing because they have failed to adapt to a new business environment). I disagree with the misinterpretation of the intent of these laws and with the subversion of the capitalist ideas which has brought stability and prosperity all over the world.
On a personal note, it is INCREDIBLY frustrating when you see people who are trying really hard and things are not working out for them. It's even harder when you know that these are good people. It's much, much worse when you see it happening to a friend. It is happening to a lot of my friends, both here and in the US, at the moment. I have a friend here who hasn't been able to find a job but still is going to have to find a way to pay off $7,000 in student loans. I have a friend in the US who may not be able to afford grad school because the amount of money he would have to take out in loans would be wayyyy to much for his salary. And either he never gets out of debt and does something he's passionate about... or he gets a corporate role that he won't like and will never use the degree he spent so much money to get anyway. And that's just two people. That's not to say all of my friends who have to make the choice between rent, food, and their student loan payment. There is an impoverishment of the American people going on here, where is the money going? To the Universities? Why exactly do they need to raise tuition 5-15% a year if inflation is between 1-3%? The credit companies? The rates are impossible. They are preying on the young and the ignorant.
For me, I care a lot about my friends. If someone was going through some hard times, they could certainly stay at my place until they got themselves back up. In a large part that's why I'm glad I'm from the families that I'm from. There is always something going on, someone staying over. I love cooking for people, I loving having people over, I love helping people. But no amount of letting someone crash at your place can help get someone out of $7,000 worth of debt or pay off $40,000 in tuition over two years. The rise of this debt in America has really taken on a new dimension. You can't just have someone move in until they get back on their feet: no matter what, you can't get the mill stone off their neck. There's no way I could give or loan a friend $40,000. Who even has that much money just lying around?! And that would only help out one person. So... maybe you can understand my frustration when I read about people complaining about not being able to afford their private jets. I just don't like feeling helpless while I watch my friends battle this out on their own. I have always tried to be generous to everyone around me when I can afford it. But who can afford this?
I can only hope that the world is in for some serious changes. There are a lot of them that need to be made to get us all back on track.