Capitalism, populism and the revolt of the working class.
A few days ago, I was cooking dinner and listening to the radio. A talk show was on where the host invites professors and knowledgeable journalists to discuss current issues. That day the conversation concerned industries that, for years, have used inferior parts in their products even after they understood that these defective parts cost human lives. The examples where the GM ignition switch which malfunctioned and killed more than a hundred people. Other examples are the Takata airbags whose malfunction claimed a number of lives. The Volkswagen diesel engines that were set to give false emission information did serious damage to the environment and thereby increased human illness.
Why did these companies not improve their products once the evidence pointed to serious damage done to consumers? The discussions on the talk show pointed out that companies want to improve their profit margin and using cheap parts was one way of doing that. Were these companies--Takata, GM, Volkswagen-- led by particularly greedy CEOs? Here the discussants faltered. Increasing the profit margin in any way possible is the job of the CEO. These and other companies operate in a capitalist system where companies are primarily supposed to make as much money as possible and not to hesitate to injure consumers in order to improve their bottom line. But in this discussion no one wanted to say that.
I mention this as one example of the extreme reluctance of public intellectuals and pundits to point to the damages that capitalism does to us every day. Bernie Sanders who is willing to say this openly is characterized as "extreme" and most people don't want to be extreme.
To be sure, capitalism is enormously productive. But what no one talks about is that capitalist enterprises need constant supervision to make sure that they do not harm consumers. We need elaborate government supervision of food to make sure that the supermarkets does not sell us meat or vegetables that are no longer safe to eat. We need elaborate supervision of appliance manufacturers to make sure that our toaster or hairdryer will not electrocute us. Pharmaceutical companies cannot be trusted to produce medicines that are safe without careful supervision by the government. Workers need to be protected by the government against unsafe working conditions, against overwork. Their employers cannot be trusted to look out for the workers' welfare.
Why is capitalism so dangerous to our life and limb? Are capitalists less moral than the rest of us? Of course not. But they are under systematic pressure to make more and more money, or lose their job. The imperative to make more and more money is often best satisfied by producing unsafe appliances, saving a few pennies on an automobiles switch or airbag, or selling meat that is no longer fresh.
Instead of being very clear about this downside of our economic system, people on talk shows, people on TV, in the newspapers never tire of singing the praises of capitalism.
The Donald Trump phenomenon, the exit of Britain from the European Union, the growth of various right-wing organizations, including the Ku Klux Klan in the US, are a result of this misrepresentation of the facts.
In our country, in Britain and in Europe, many working people are genuinely suffering. Their wages are stagnant, while prices go up. Government support for people whose income is not sufficient for a decent life, is constantly being cut while businesses get better tax deals, or are allowed to not pay any taxes at all. In a recent poll, the majority of persons asked agreed that the economic system is rigged. Matters are arranged so as to increase corporate profits at the expense of ordinary working men and women whose economic situation is steadily deteriorating.
The explanation of this development is clear. The capitalist system demands greater corporate profits and is willing to achieve that goal at the expense of the public. But for most people that explanation is not available because they are being told every day how great capitalism is. So they are faced with the unquestionable evidence that their lives are becoming more difficult and their economic outlook is quite negative, but they don't understand how that could happen. The correct explanation that this is the result of capitalism is not available to them and so they are willing to accept any explanation whatsoever.
The favorite explanation is: Immigration. Working people in the United States and in Britain are being persuaded that their living standard is going down due to competition from immigrants and thus their enmity and wrath is is turned on immigrants. They support Donald Trump’s hostility to immigrants and his promises to keep them out. In England working people voted to leave the European Union because they too believe that immigrants are the source of their problem. They are willing to believe that Donald Trump will bring jobs back from Asia and Latin America because they don't understand that outsourcing of jobs is a central capitalist strategy for increasing profits. As long as capitalism is sacred, jobs will be outsourced to low-wage countries and to robots. Should immigration be reduced, capitalists will find other ways to lower their production costs at the expense of working people here and in Britain.
People in the know believe that England will be worse off once it leaves the European Union. Many of us in the US believe that we will be much worse off with Donald Trump in the White House.
But working people will support Trump in the US, as they supported an anti-immigrants stand in England, because the people whose job it is to inform the public have systematically lied and concealed the destructive effects of capitalism. If the voters are not well informed democracy will not have good outcomes.
It is high time that pundits, journalists, professors, so-called experts tell everyone the truth. Capitalism, however productive, needs to be very tightly supervised if it is not going to do large damage to the majority of the population. The fully justified discontent of working people in the Western capitalist democracies is largely the fault of capitalism and the failure of governments to regulate it much more tightly.