We have now sunk to a depth at which the restatement of the obvious is the first duty of intelligent men. — George Orwell
A shout-out to our friend and fellow analyst David Brooks as we both continue our struggle to wake up, that is to say, to make the distinction between reality and illusion. In this essay we focus on the ruinous effects of the global economy and its underlying ideological foundation. Despite this intellectual-sounding intro, we will find where the rubber hits the road.
Our Freudian slip in the title of this piece might just mean that our current (2018) president is a good example of the ruinous craving associated with mindless greed. Are we being too judgmental in our condemnation of American values associated with our economic system? At this point, we will let our colleague Mr. Brooks step to the fore with ammunition for our assault on “survival of the fittest” American values.
“In ‘The New Class War’ in American Affairs, Michael Lind points out that by the time of the Great Recession, 95 percent of microprocessors were manufactured by just four companies. Two-thirds of the glass bottles in the world were made by just two firms. In 2007, two firms controlled 86 percent of the global market in the financial information industry. Sixty percent of the tires in the world were made by just three companies.” (1) So! What’s wrong with this consolidation?
How does creating efficiencies of scale create a problem? Remember first, that the definition of successful homo-sapien behavior is that we create a sustainable community. That, of course, means that everyone in the community shares in the economic success of that community. David Brooks objected because he did not see that happening and quoted Hyman Louis to support his concern. “These oligarchs spend a lot of their effort not in enhancing productivity but in playing nation-states off one another in search of tax breaks and subsidies. If any nation threatens to enforce a basic social contract, the companies threaten to move offshore.” (1)
Our current chief executive is not a fan of tariff-free trade or of the free-flow of goods on a global scale. Is there evidence that he might not understand the economic principles involved? “One approach to answering this question is to examine whether countries that are open to trade enjoy greater prosperity. In a 1995 paper, the economists Jeffrey D. Sachs and Andrew Warner studied a large sample of nations and found that open economies grew significantly faster than closed ones.” (2)
A little history is now in order. When did employees and consumers begin to be thrown under the bus by corporations? “The emergence in the 1970s of a new, strictly financial view of corporations, a philosophy that favored stock and bond prices over production, of short-term gains over long-term investment. Theories of ‘lean’ corporate organization became popular, especially those sold by management consultants and business gurus.” (3)
For more about the underlying causes of the human behavior revealed above follow the link below.
Insight # 47: Gain and loss are meaningless preoccupations that we use to foster the illusion of a permanent self. — Sakyong Mipham Rinpoche
- Cooperation and Competition in The ABCs of Simple Reality in print and on this blog, by Roy Charles Henry.
- Brooks, David. “The Sidney Awards, Part II.” The New York Times. December 29, 2017, page A25.
- Mankiw, N. Gregory. “Reviewing the Tenets of Free Trade.” The New York Times. February 18, 2018, page 3.
- Hyman Louis. “The Gig Economy Isn’t the iPhone’s Fault.” The New York Times. August 19, 2018, page 5.