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The Demise of Free Enterprise

The free enterprise system, cherished by many Americans as the engine that drives a successful national economy, is threatened by capitalism. The ultimate outcome of unbridled capitalism is monopoly. Monopolies squeeze out competition to totally control segments of the market place. The result is not in the best interest of democracy, a strong economy or the American people.

While corporations and entrepreneurs have always sought to eliminate competition and to dominate their chosen markets, government and public opinion have served to moderate the influence of self-interested businesses by establishing regulations that level the field for fair competition. Regulations and laws have also served to guide society toward the common good rather than the good of common corporate comrades.

Since the rise of Reaganism in the early nineteen eighties, American culture has increasingly been pushed toward an egocentric mindset. The Reagan tsunami washed across the American psyche with self gratifying, feel-good jingles. The refreshing simplicity of life with easy answers attracted both the wealthy and the middle class like the fans of Star Wars sequels lining up for the films’ premiers to escape their daily doubts through fantasy.

Americans wanted to avoid the realities of America’s tarnished image after Vietnam; they wanted to ignore our overconsumption of natural resources and the accompanying strangle-hold of the oil producing nations; they wanted to feel good, to feel powerful, to be potent. The self examination of the sixties and seventies gave way to attitudes of non-apologetic selfishness. Greed was rewarded with congratulations. Talk of fairness, sharing or equality was met with sneers and derogatory comments about socialism—as though the American people should not expect to share in the nation’s natural and labor resources.

Demagogues of the right insisted that industry had the right to pollute and profit with no limit because capitalism was the American way and government should not interfere with the free exercise of whatever the captains of industry deemed necessary to succeed at their endeavors. While Republican politicians crowed about getting elected to quash the "special interests" in Washington, the Republican rightwing simultaneously built the formidable infrastructure of lobbying groups that would become the fourth "branch" of government joining the constitutionally mandated Congress, Supreme Court, and Executive branches. This corridor of lobbying power would later become known as "K" street in the same Washington, D.C. bureaucracy that the right promised its constituency to abolish.

Massive pressure, funded by wealthy corporations, was applied by the onslaught of those lobbyists to strip away regulations and laws that functioned on behalf of the nation in favor of carte blanche choices for corporations and political donors. While the fringe right delivered on promises of less regulation, the beneficiaries were not their middle class supporters, indeed, not even the moderately wealthy benefited nearly as much as the super rich and international businesses that prospered under the Reagan regime.

The momentum to redirect the nation’s wealth and power continued under the first George Bush reign.

Even when the presidential reins were turned over to Bill Clinton, we saw his administration approach regulation in much the same way as the previous Regan and Bush administrations—from the presumption that less regulation of business garnered more prosperity for the country. We saw NAFTA (North Atlantic Free Trade Agreement) touted as opening new markets to America, promoted heavily by the Clintons. In fact, it created an exodus of jobs from the U.S. and continued the further degeneration of the environment: moving manufacturing a country with less political will to control green house gases, purity of water, clean land and safe working conditions.

When George W. Bush came to power buoyed by half the voting electorate and further assisted with possible election fraud--at the very least questionable election practices--we saw him immediately begin to follow policies that contradicted the campaign promises of less government and lower taxes. His focus assured his wealthy constituents the benefits that were promised, doled out to them at the expense of Bush’s middle class supporters and detractors. The tax cuts favored the top echelon of the rich while the cut in services to pay for the cuts fell hard on the rest of America. When the cost of the tax cuts (decreased income) far exceeded the cut in expenses, he borrowed from his banking friends and foreign governments to pay the difference. That debt was left for future generations coming of age—like a college student with credit cards.

Bush could be likened to a pimp promising one of his prostitutes that she was his favorite among the many. "Just do what you’re told and you will be my number one bitch. You know I love you more than the others. You’re special. I love you. So get your ass on the street and do what you’re supposed to do. I will take care of everything else." We know how that scenario plays out.

Besides the steady erosion of wealth from the middle class to the benefit of the 1% wealthiest of Americans during the last 25 years, we have seen the steady expropriation of the public air waves. We’ve moved from our long tradition of operating our media "in the public interest," to enabling the media to become the culture control and profit tool of monolithic media empires such as Clear Channel Communications and the Murdock enterprises. Further witness the role of the Federal Communications Commission (FCC) in advocating for the interests of campaign donors rather than an intelligent, informed public. We have seen increasing monopolistic control of our culture through media moguls like Murdock who dictate points of view while labeling them as "fair and balanced" a cynical joke in the news rooms of Fox. Call it: double speak, oxymoron, propaganda or lies; however one might refer to the disintegration of the great American tradition of popular oversight of our public airwaves that had evolved through the twentieth century.

When our own reality becomes the reality of TV, then we know that we have arrived in the era of Arnold Schwarzenegger’s "Running Man." Media only for entertainment begets a nation of self-absorbed morons whose main concern is whether the idol will prevail at tribal council or if she scores a love interest from her twenty house guests who compete for her attention.

Meanwhile our economy is being high-jacked by conglomerates like Wal-Mart, Exxon, Citi Group, Sony, Monsanto, Kraft and Clear Channel, to name a few. As they target small businesses for extinction and acquire medium sized competitors, they increase their control of chains of production, distribution, employment and communication—a strategy the oil companies are famous for.

Their expanding monopolies further drain the wealth of the many to the gain of the few. These international businesses owe no loyalty to the United States or its citizens. Their allegiance is to the shareholders and some foreign "sovereign funds" that own them.

In tandem with their elected officials, major business concerns muscle the congress to stall legislation that will increase their taxes thus preserving more capital to squeeze their smaller competitors out of the market.

Simultaneously, Wal-Mart markets its products to the same clientele that it taps for sub-standard employment. Compare that phenomenon to what happened to the newly freed slaves of the South following the Civil War. The former slaves were hired by the plantations and factories for wages that didn’t suffice to live on. Then the employers sold them the basic needs of food and clothing from company stores at inflated prices that subjugated the laborers to perpetual debt (another form of servitude)—the surest way to keep them working and powerless.

How does this compare with the amount of consumer debt that we have now? Marketing credit cards to young adults who don’t have the means to pay off the debt; sub-prime loans to borrowers who will forfeit their homes back to the banks; financing plans that reap 25% interest rates after an interest free 90 days. There used to be usury laws to prevent predatory lending--not since Reagan.

Here’s an irony: foreign governments using their new wealth from oil, labor and cheap manufacturing to gobble-up the emerging monopolies in order to secure their countries’ access to resources, technology and political influence. Observe the recent moves by the Abu Dhabi to acquire major positions in Citi Group and the financial group Merrill Lynch. The Chinese government invested in nearly 10% of Morgan Stanley group stock in 2007 and a like percentage of stock in Blackstone Group, a private equity company. The 2005 attempt by China to acquire oil company Unocal was quashed by domestic opposition in the United States.

These actions are not unlike the method used by the robber barons of the nineteenth century who built their wealth and influence with banks, energy and transportation. Now that the sovereign funds have a foot hold in the financial industry, watch for further consolidation in energy, transportation and most importantly, food.

Next we see the lack of vigilance by our public servants to protect the public interest taking a more sinister twist. Having allowed monopolistic trends to flourish in an obscure view of free market economics the free market has come to free the market of U.S. control. The none-regulators failed to sow the seeds and now we must suffer the famine. This is how empires collapse.

Now that we have considered the mammoths of banking, energy, communication, and food, let us not forget the defense industry about whom former World War II general and U.S. president, Dwight Eisenhower warned us in 1961. "...we must guard against the acquisition of unwarranted influence…by the military complex. The potential for the disastrous rise of misplaced power exists and will persist. "

An international military complex flourishing from revenues reaped from conflict in the Middle East will look to additional opportunities to expand their markets. Do you know what it means when a munitions or military services company expands its market? War—that’s how they earn their money. They fail in the absence of war. They succeed when there is fear, hate, greed and corruption. They pay senators to earmark their products. If you think that Duke Cunningham was a misnomer, call upon common sense. You understand human nature; you realize how critical money is to the political life of every politician regardless of party affiliation; you know that the hunger for money and power is insatiable. They will exercise their influence to assure their success.

When an armaments manufacturer is the sole producer of a bomber or crucial military hardware they can bill us for a $100 hammer or a multi-billion dollar aircraft; when a military logistics company like Halliburton doesn’t have to compete for contracts because their former executive is the Secretary of Defense, they can print their own money; when military contractors hold monopolies they can cheat, extort, and bribe without consequences or loss of government contracts because they are the only game in town. That is the situation that we have now.

Here is the scenario for the coming decades if unbridled capitalism marches forward to overwhelm democracy. We’ll see more consolidation of energy, food production from farm to table, financial institutions, and communications. We’ll see the trend to foment more global conflict to enrich the powerful defense industry and to recapture national power, international influence and economic control lost by the U.S. to other nations through poor international policies. These wars can also deflect political criticism by demanding a united front in the time of war as was the case at the beginning of the wars in Afghanistan and Iraq when detractors were labeled as unpatriotic or even traitorous.

Americans must stand up to defend their country and culture from the real security threat—capitalistic monopoly. The focus should not be against raw capitalism, or against free enterprise, especially not against government regulation. Rather, efforts must focus on taking control of our institutions and represent our self-interest as a society: breakup the communications monopolies; take control of our energy resources; encourage small business, small farms and alternative energy sources; regulate tighter banking controls, banish private funding of campaigns, control lobbyists and restrict foreign and monopolistic control of critical infrastructure and technology.

If these endeavors seem to be to daunting or unattainable, be encouraged when your football team makes it to the Super Bowl and be content to know that Kevin survives the final tribal council and wins the million dollars, minus taxes, of course.