Robert Reich: How Capitalism is Killing Democracy

Robert Reich says democracy is being snuffed out by the pursuit of profit:

How Capitalism Is Killing Democracy, by Robert B. Reich, Foreign Policy (free w/reg.): Free markets were supposed to lead to free societies. Instead, today's supercharged global economy is eroding the power of the people in democracies around the globe. Welcome to a world where ... government takes a back seat to big business. ...

Conventional wisdom holds that where either capitalism or democracy flourishes, the other must soon follow. Yet today, their fortunes are beginning to diverge. Capitalism ... is thriving, while democracy is struggling to keep up. China ... has embraced market freedom, but not political freedom. Many economically successful nations-from Russia to Mexico-are democracies in name only. They are encumbered by the same problems that have hobbled American democracy in recent years, allowing corporations and elites ... to undermine the government's capacity to respond to citizens' concerns. ...

[T]hough free markets have brought unprecedented prosperity to many, they have been accompanied by widening inequalities..., heightened job insecurity, and environmental hazards such as global warming. Democracy is designed to allow citizens to address these very issues in constructive ways. And yet a sense of political powerlessness is on the rise among citizens in Europe, Japan, and the United States... In short, no democratic nation is effectively coping with capitalism's negative side effects.

This fact is not, however, a failing of capitalism. ... Capitalism's role is to increase the economic pie, nothing more. ... Democracy, at its best, enables citizens to debate collectively how the slices of the pie should be divided and to determine which rules apply to private goods and which to public goods. Today, those tasks are increasingly being left to the market. What is desperately needed is a clear delineation of the boundary between global capitalism and democracy-between the economic game, on the one hand, and how its rules are set, on the other. If the purpose of capitalism is to allow corporations to play the market as aggressively as possible, the challenge for citizens is to stop these economic entities from being the authors of the rules by which we live.

The Cost of Doing Business

Most people are of two minds: As consumers and investors, we want the bargains and high returns that the global economy provides. As citizens, we don't like many of the social consequences that flow from these transactions. We like to blame corporations..., but in truth we've made this compact with ourselves. After all, we know the roots of the great economic deals we're getting. They come from workers forced to settle for lower wages and benefits. They come from companies that shed their loyalties to communities and morph into global supply chains. ... And they come from industries that often wreak havoc on the environment. ...

Such conflicting sentiments are hardly limited to the United States. The recent wave of corporate restructurings in Europe has shaken the continent's typical commitment to job security and social welfare. ... In Japan, many companies have abandoned lifetime employment, cut workforces, and closed down unprofitable lines. ... A nation that once prided itself on being an "all middle-class society" is beginning to show sharp disparities in income and wealth. ... Like many free countries around the world, Japan is embracing global capitalism with a democracy too enfeebled to face the free market's many social penalties.

On the other end of the political spectrum sits China, which is surging toward capitalism without democracy at all. That's good news for people who invest in China, but the social consequences for the country's citizens are mounting. ... And those who are affected most have little political recourse to change the situation, beyond riots that are routinely put down by force.

But citizens living in democratic ... have the ability to alter the rules of the game so that the cost to society need not be so great. And yet, we've increasingly left those responsibilities to the private sector-to the companies themselves and their squadrons of lobbyists and public-relations experts-pretending as if some inherent morality or corporate good citizenship will compel them to look out for the greater good. ... We forget that they are simply duty bound to protect the bottom line.

The Rules of the Game

Why has capitalism succeeded while democracy has steadily weakened? Democracy has become enfeebled largely because companies, in intensifying competition for global consumers and investors, have invested ever greater sums in lobbying, public relations, and even bribes and kickbacks, seeking laws that give them a competitive advantage over their rivals. The result is an arms race for political influence that is drowning out the voices of average citizens. ... The only way for the citizens in us to trump the consumers in us is through laws and rules that make our purchases and investments social choices as well as personal ones. ...

Let us be clear: The purpose of democracy is to accomplish ends we cannot achieve as individuals. But democracy cannot fulfill this role when companies use politics to advance or maintain their competitive standing, or when they appear to take on social responsibilities that they have no real capacity or authority to fulfill. That leaves societies unable to address the tradeoffs between economic growth and social problems such as job insecurity, widening inequality, and climate change. As a result, consumer and investor interests almost invariably trump common concerns. ...

[F]or those of us living in democracies, it is imperative to remember that we are also citizens who have it in our power to reduce these social costs, making the true price of the goods and services we purchase as low as possible. We can accomplish this larger feat only if we take our roles as citizens seriously. The first step, which is often the hardest, is to get our thinking straight.

 

Comments

[Robert]

"Why has capitalism succeeded while democracy has steadily weakened? Democracy has become enfeebled largely because companies, in intensifying competition for global consumers and investors, have invested ever greater sums in lobbying, public relations, and even bribes and kickbacks, seeking laws that give them a competitive advantage over their rivals. The result is an arms race for political influence that is drowning out the voices of average citizens. ... The only way for the citizens in us to trump the consumers in us is through laws and rules that make our purchases and investments social choices as well as personal ones. ..."

In general, Here! Here! to Robert Reich for verbalizing the gist of why most citizens feel helpless in today's political scheme, as well as identifying the base reason behind the disparity in wealth and power the minority rich hold over the majority poor. Although I must take some issue with his conclusion to this paragraph that states we must enact laws to protect us from ourselves. I believe what he has actually cited is the disproportionate balance of power in our current attempts at democracy. This country was founded on one premise among others of no taxation without representation, yet today we have rampant representation without proper taxation. The corporation in the U.S. is to be seen as an individual, a single entity with a comparable single taxation footprint of ~35%. However, given effective rates for these entities may be significantly less, the real problem is that these individual entities representative power is way beyond that of yours or mine as individual citizens. I'd have no problem with companies like Wal-Mart, easy target, to hold sway over wage and labor laws, provided they were taxed proportionately to that sway. If they can significantly influence the legislation governing employment criteria that determine one's eligibility for health care coverage, let it occur because they are funding a proportion of national health care costs representative of that influence.

[evagrius]

"This fact is not, however, a failing of capitalism. ... Capitalism's role is to increase the economic pie, nothing more. ... Democracy, at its best, enables citizens to debate collectively how the slices of the pie should be divided and to determine which rules apply to private goods and which to public goods. Today, those tasks are increasingly being left to the market. What is desperately needed is a clear delineation of the boundary between global capitalism and democracy-between the economic game, on the one hand, and how its rules are set, on the other. If the purpose of capitalism is to allow corporations to play the market as aggressively as possible, the challenge for citizens is to stop these economic entities from being the authors of the rules by which we live."

I can't see a way out of the dilemma; if "free markets" are to exist, then there must be no limits to them.
Once limits are set up, ( private goods vs public goods for example), then there are no longer any "free markets".

Of course, it all depends on whether one believes that such "things" as "free markets" actually exist.

[Robert]

As Coase proposes the market will find equilibrium and allocate the externalities. However, the government's role is to bridge the lag in timing when for example the externalities associated with artificially low resources experienced by past generations are brought to bear on future generations. Legislation and taxation must strive to equally distribute the costs of these externalities across time.

[Peter Schaeffer]

There is a lot of truth to what Robert Reich writes. However, he has failed to address the implications of his observations. Opinion polling by the CFR (Council on Foreign Relations) has shown that the largest schisms between elite and public opinion, are on immigration and trade. Other polling data confirms these gaps.

A genuinely democratic debate on the economy must include confronting elite Open Borders ideology with respect to both “free” trade and mass immigration. However, much of the left finds any mention of either subject anathema. Nearly hysterical efforts are made to stifle legitimate discussion. The ghosts of Willie Horton and Smoot-Hawley are conjured up as need be. Charges of “racism” and “xenophobia” are used as ritual incantations to ward off the evil spirits of open debate.

Of course, some of the right (which is far more rigid on trade than immigration) is equally guilty. Given that Robert Reich is a man of the liberal-left he needs to take at least some responsibility for the lack of democratic debate on the economic issues of the day.

[robertdfeinman]

I disagreed with his premise and I continue to disagree every time he repeats it. It's not "corporations" that are causing the problems, its the plutocracy which owns them or effectively controls them.

I'll give a single example, Walmart. The Walton family controls about 45% of the shares, that is effective control. This is the largest company in the world by some measures and its controlled by four people and their immediate families.

They use this wealth to reframe the intellectual debate so that greed is considered good. China is in a similar situation. What is making its development happen with so many negative side effects? The ability of the wealthy industrialists to bribe government officials and the cross ownership by officials of profitable firms.

In countries where the wealthy don't have as much of a grip the conditions are much better. Look at France and Germany, for example. There is more concern about issues like climate change, workers are better off relatively speaking, social services are more comprehensive, and democracy is working, even if it still imperfect.

It is the concentration of wealth in the hands of the few that causes the problems. Their interests are not the same as those of the rest of us.

[save_the-rustbelt]

I'm reminded of the original "Rollerball" movie (James Caan) in which 7 large corporations ruled the world (Transportation, Media, etc.) and the game of rollerball was invented to allow the masses to vent.

(I won't spoil the plot, rent it, it is a good serious film).

We aren't there yet, but somedays I wonder.

(In a recent survey about 60% of Ohioans said they would pay higher consumer prices if imports were regulated to allow more domestic jobs and better quality goods).

[STS]

Marxist Economic Determinism held that historical development was driven by the class structure of society and the associated control of the means of production. That has been discredited and replaced by the new Friedmanite Economic Determinism, which holds that economic freedom creates political freedom. I attribute this to Milton Friedman (and his wife Rose) because they gave an eloquent statement of the theory in "Free To Choose". We don't need to worry about political freedom, because that's just an automatic by-product of having the ability to choose how you spend your money. Friedmanite Economic Determinism has also been called Market Fundamentalism.

Our era will test the validity of this theory much as the 20th century tested the Marxist theory. As you may recall, it was a bumpy ride.

I often disagree with Reich, but I think he has put his finger on the essential question. That in itself is an important kind of progress.

[Peter Schaeffer]

STR,

The national polling data matches Ohio. "Free" trade is an elite ideology with little public support. The high end financial media (FT, Economist, etc.) regularly publishes articles expressing concern that public opposition to elite globalization will previal sooner or later.

For example, see "Sinking Globalization" (http://www.foreignaffairs.org/20050301faessay84207/niall-ferguson/sinking-globalization.html) by Niall Ferguson.

[esb]

In the 21st century "global" model embraced by the Bushies (and the Clintons/Rubin as well) the economic interests of the top non-residential wealth holders in the US have mostly diverged from those of the, say, bottom 95%.

Now the Clintons simply erred whereas the Bushies fully embrace the model. For the Bushies, the natural constituency is the highest 95% of (non-residential) wealth holders.

The genius (if you wish to call it that) of Lee Atwater and his gang in the 1980s was in getting substantial blocks of the electorate (evangelicals and the like) to vote against their (and their children's ) economic interests (by voting "R") in the muddled hope that they would be protected from evil social evolution. This is the factor that keeps the "new plutocrats" in power (as in 2004).

Should it be the case that the "R" candidate wins anew in 2008 it would not be unexpected for the model to continue to run unless checked by some measure of social unrest.

[esb]

OOPS...

The above should read "the natual constituency is the highest 5% of (non-residential) wealth holders."

[kthomas]

Peter....you're boring everyone with your attacks on Open Borders. You;re better than that.

[Thomas More]

Bravo Robert Reich! He hits the nail on the head.

Yes there are some good points made about whats left out, illegal immigration and leftist's abhorrance of dealing with it, etc..........but his basic premise is a bull's eye.

Free trade?, no such thing exists. As it stands now its managed trade for targeted benefits. What most people want in my view is Fair Trade.

"yet today we have rampant representation without proper taxation."

This is beautifully put, a perfect descriptive phrase. Wish I'd said it.

[realpc]

"Democracy, at its best, enables citizens to debate collectively how the slices of the pie should be divided and to determine which rules apply to private goods and which to public goods."

That kind of democracy doesn't exist, does it? No one was dividing up the pie in early America, as far as I know.

He's talking about a different meaning of "democracy" -- "social democracy" or something like that. Can that possibly work, is the question. It depends on intensive central planning.

[dissent]

I have long been So Very Irritated by right wing rhetoric making "government" the enemy of the people.

Our government was handed down to us by generations who fought and died for freedom, for democracy, for the rights of citizens (not corporations).

This government is a living legacy which we must maintain in good faith in order to ensure that it works for us and acts in defense of our liberties.

Without this government, we are not citizens in a democracy.

What is patriotism if not understanding these basis truths?

[mike]

Wrong. It is a failure of government/democracy to deal with external impacts, not a failure of capitalism. There is no successful alternative to markets for allocation of private resources.

Reich and his fellows are going to create a permanent Repulican party reign if they keep up such crap as this.

[calmo]

kudos to you (or the typo gods), mike.
Repulican: half pelican--half Republican (totally repulsive).
It is a failure of government/democracy to deal with external impacts (like illegal aliens for conspicuous instance?), not a failure (but a conspicuous triumph) of capitalism. There is no successful alternative to markets for allocation of private resources.
Ok, what if those resources are not so private? Privatize the snot out them before they contaminate the place with socialism?
Do you think capitalism (whatever this could mean for you) needs this desperate defense ("WRONG") even though there are no alternatives?

[realpc]

"I have long been So Very Irritated by right wing rhetoric making "government" the enemy of the people."

GOVERNMENT IS THE ENEMY OF THE PEOPLE. That's the whole idea behind the creation of the USA. Any government, however angelic in the beginning, will grow tentacles and start strangling freedom and democracy.

The problem we have now, possibly, is big business and big government in league together against all the rest of US.

Bigger government is not the answer, and neither is bigger business.

Yes of course you should fight against big business, but what Reich and Krugman, etc., are failing to see is you have to also fight big government. BOTH ARE THE ENEMY.

So who can help slay this monster? I don't know. We need some leaders who can see that neither "left" nor "right" is the answer. All the leaders and experts are trying to lean on one ideology or the other, never seeing that BOTH ARE WRONG.

[Mayo]

"A Theology of Capitalism is sweeping the world..."

Of course this caveat; unless people lose faith in this new theology of capitalism and establish either unions or press their governments to challenge social inequities. Even medical costs around the world are a challenge to contemporary capitalism. Market oriented policies argue that an egalitarian approach to healthcare is unaffordable and export the notion that healthcare is a business and not a right. It seems listening to these ideologues, that their interpretation of original intent goes far beyond Supreme Court decisions. At the heart of their argument is an internationalist ideology at odds with any established global consensus or government oversight. Of course, Now that doubt has set in, spin-wizards, politicians and faith based capitalists are turning up the chorus to slash interest rates even further to hide the fact that trillions in illusionary wealth has vanished.

[Patricia]

The markets today are not a reflection of people's innate needs and desires. Our "needs" and desires are being manipulated by the rich power elite for ever-increasing profits that they have no rational need of, distorting the market.

If you look at history, capitalism as a cult will damage itself severely, as does any cult. Then we will have excesses in a different direction amounting to a cult, which will go the same way. It seems to be human nature.

[Winslow R.]

Hypocritical how Repubs fight for the 'individual rights' in the political sphere yet for 'corporate rights' in the economic sphere.

The Dems fight for 'corporate rights' in the political sphere yet have they ever bothered to fight for 'individual rights' in the economic sphere? No, the SBA was a very weak attempt.

Perhaps Reich's book is an opening salvo for corporate reform. Perhaps it is time for Dems to realize they need to change the system that gives preference to corporations over the individual in so many ways - time to examine their inner republican...

Of course my favorite is the ability of corporate banks to access the Fed window which gives corporations a distinct advantage over individuals as many of these banks have crossed the business/bank barrier. GE Financial is a good example. Time to allow the individual access and then step back and watch the market 'right' itself. Won't happen until the 'tilt' in the system is removed.

[Winslow R]

Wow, I partly agree with realpc. Yet he has an extreme tilt towards the individual which is no better than what we have now. I'd like to see a 'fair' balance between the individual and society.

[PeterRabid]

How dare we pick nits with such a majestic statement of the truth right under our noses that we couldn't see !

[Petter H]

Feel free to attack:

1. Why is nobody here talking about unemployment? Leaving 5-year plan utopias aside, even if job destruction rates goes up how about job creation? I think this upside of the free economy is left out.

2. Never in the history of mankind has so many been lift from poverty as in e.g. China. Millions and millions of people. In record time. For some reason this is seems to be regarded as totally unimportant.

3. Yes, relative income gaps are increasing. So? If those worse off keep getting better standards of living, isn't that something to cherish? Do you really want envy reduction to trumph food on the table as an objective?

4. The smallest demos - one person - also need some crati - to rule. Actually, the biggest capitalists of any kind has no power over my living unless I'm employed by their company perhaps (I am free to quit though). My politicians can make me do many things (or else).

5. I don't see how there must a contradiction between consumer and citizen. They're not the same, but as a citizen (of Sweden), I'd like to consume as freely as we have all decided the government should let us to do.

(Bonus point) Profits does not equal greed. It's a sign of decent business.

[ken melvin]

These defenders of capitalism be merely dupes.

[Gil]

To see if Capitalism and Democracy are truly compatible all you have to do is look at laissez-faire's greatest supporters - Right Libertarians. Their love for totally free Capitalism is obvious yet look at their views on Democracy. They hate it! They see it nothing more than mob rule and the mob are the workers and workers are going to most of the voters therefore, to them, Democracy equals Socialism. Amazingly is they'd actually prefer a Monarchy over Democracy! Something about a Monarch having a greater time preference. Believe or not, I do believe even Cato admitted the wealthiest nations with the highest standards of living are Liberal Capitalist Democracy. But I'm R. Libbers would probably say that it was because in the 20th century the only alternative in those days was Communism.

[BJ Feng]

Bravo Petter H, looks like Reich could learn a thing or two from you.

Democracy is not mob rule. It cannot work by the majority taking what they want from the minority. It can't work by having the poor take from the rich whenever they feel entitled. This is the democracy of Africa, whereby the tribe that manages to win the election takes everything for itself. Not surprising that when another tribe wins, they take everything for themselves too. That leads to violent conflict and civil war after civil war.

Democracy needs rules. The rules should be designed to give OPPORTUNITIES to everyone. Those who play by the rules and flourish, should not be punished for doing well. Even Reich admits that rules that prohibit capitalism are doomed to fail.

Unemployment is at near record lows, 4.5%. Income inequality is up, but, as some have pointed out, that can be explained due to the large influx of uneducated illegal workers. The refusal to even discuss this obvious explanation for income inequality shows the lack of intellectual integrity. The corporations are not the problem here. The only failure of democracy is that the elites refuse to obey the wishes of the majority who want to restrict illegal immigration, and thus, reduce the growing inequality between those who have to face the competition induced by 20 million new illegal workers, and those who do not.

[PeterRabid]

"The first step, which is often the hardest, is to get our thinking straight."

Would everyone accept two simple truths so often obscured?
1. Capitalism and democracy are not the same thing.
2. In case of conflict, preserving democracy must take precedence over preserving capitalism.

[anne]

Having read the essay twice (why?) I have no idea what Robert Reich is talking about other than all the world is this and all the world is that and this and that are problems and unhappy problems for reasons that are too mysterious to be ever made clear. Never ever read Reich twice.

[anne]

"Like many free countries around the world, Japan is embracing global capitalism with a democracy too enfeebled to face the free market's many social penalties."

Say what? This is a typical Reich-ian meaningless but entirely arrogant comment. Remind me to hug my Prius.

[evagrius]

Klein exposes 'disaster capitalism' in new book
Updated Wed. Sep. 5 2007 2:32 PM ET

Philip Stavrou, CTV.ca News Staff

Tsunami, fantastic. Category 5 hurricane, great news. Terrorist attack, even better.

That's the thinking behind disaster capitalism -- exploiting a large scale disaster or crisis by introducing free market policies unlikely to be accepted under normal circumstances.

In her book, "The Shock Doctrine: The Rise of Disaster Capitalism," Naomi Klein explores how this phenomenon has been used post-9/11, in the war in Iraq and following the devastation of Hurricane Katrina.

Klein says the most extreme example of disaster capitalism occurred in the early days of the U.S. occupation in Iraq.

"You had Paul Bremer (former U.S. administrator in Iraq) coming to Baghdad a month after the city fell... and announcing immediately -- what I call in the book -- an extreme country makeover," Klein told CTV.ca.

"(He) very famously announced that Iraq was open for business, he also announced that the 200 state-owned companies would be immediately privatized."

At the time, Klein, who was working as a journalist in Iraq, described the situation as economic shock therapy imposed through shock-and-awe warfare.

She said the theory of the Bush administration was to push policy through while Iraqis were dislocated and disoriented.

"It failed, as it happens, but the attempt was very bold and completely unhidden," said Klein.

"The idea of so dramatically remaking a country at a moment when you fully understand that the people cannot participate in these core decisions about what kind of country they will have is basically, in my view, the most deeply anti-democratic idea on the books."

Klein says that the Bush administration took a similar approach following Hurricane Katrina.

Along with local levels of government, the White House was quick to push through unpopular policies following the disaster at a time when poor residents were displaced all over the country.

Without any strong opposition, the government announced:

They wouldn't rebuild housing projects, instead replacing them with condos
The closing of public health facilities
The transformation of the public school system to a charter system
In effect, the elites pushed through policies that they could never have passed if it wasn't for the chaos in the aftermath of the disaster, says Klein.

Even disaster response is now being privatized in what Klein calls a "booming new business."

She started using the phrase "disaster capitalism" following the Asian tsunami in 2004.

Klein says institutions such as the World Bank, which were funnelling aid money to different countries, were putting pressure on local governments to use the funds to convert residential areas into tourism zones.

"The small-boat fishing people, who were some of the poorest people in the country, were being moved to inland camps... and their land was being handed over to large resort developers," said Klein.

"The most powerful forces in society were treating the disaster as a gift to them and they could remake the country of their dreams."

Conspiracy Theories

Best known for her international anti-globalization bestseller, "No Logo: Taking Aim at the Brand Bullies," 37-year-old Klein says her new book should not be seen as advancing conspiracy theories that the U.S. government plans such disasters.

"There is this profound sense -- particularly in the think-tank infrastructure -- that crises are opportunities and when they hit you pounce," said Klein.

"It's simply that people are witnessing the incredible opportunism in the wake of these disasters and they think, 'Okay, they must have planned it.'"

The book discusses the theories of famed economist Milton Friedman, who died in 2006, and his Chicago School of Economics.

Friedman's philosophy was the basis for what Klein terms the "shock doctrine."

In one of his essay's Friedman states that "only a crisis -- actual or perceived -- produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around.

"That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable."

When disaster strikes, instead of having aid ready, Friedmanites are eager to distribute free-market ideas, says Klein.

She says immediately following 9/11, the White House utilized Friedman's approach by launching the "War on Terror" while ensuring that it became an "almost completely for-profit venture."

In her book, Klein says the Bush administration acted as "a deep-pocketed venture capitalist" following the attacks, sending billions to private companies through homeland security contracts, weapons contracts and humanitarian and reconstruction initiatives.

Since everything else is being privatized, what about privatizing peace?

"Rather than looking to business to create peace for us, I think we have to understand that we have allowed a tremendous economic incentive for ongoing war and instability to take root," said Klein.

She says those who are opposed to disaster capitalism must enter into a state of readiness so that they can mobilize just as quickly against those who spring when a disaster strikes.

[real person from the real world]

I recently started reading:

All Together Now
Common Sense for a Fair Economy
By Jared Bernstein

ISBN: 978-1-57675-387-3 or (1-57675-387-5)
$12.00, 120 pages, 5 1/2” x 8 1/2”
Available in May 2006 from Berrett-Koehler Publishers

I searched for a site to refer to and found this (I hope this is not some biased think tank)

http://www.epinet.org/content.cfm/books_all_together_now

Jared Bernstein talks about how the over hyped ideal of individualism (as in Ayn Rand) is at the root of this YOYO (your on your own) trend, whereas, so many things could be better, if we came together - his WITT (we're in this together).

I think we need to pull together as a nation. For so long, we have ppushed some sort of PC attitude that we should encourage cutural identity at the expense of national identity. During the depression and after WWII, we used to celebrate the melting pot that took the best from everyone and made a nation unique and special.

Now every thing is fractionalized. Outsourced work to the lowest bidder, privatized health care and retirement, leaving the poor without, or dealing with extreme uncertainty.

Some things, as Lafayette has pointed out so often in these blog pages, go beyond polarized interests: Education and Heath should be priorities. We need healthy educated people, if we are to compete globally.

[BJ Feng]

Another book unworthy of publication and easily dismissed.

[brian holt]

realpc:

"GOVERNMENT IS THE ENEMY OF THE PEOPLE..."

is not the same as saying "BIG GOVERNMENT IS THE ENEMY OF THE PEOPLE."

And yet your post seems to conflate the two; while I'd tend agree with the latter, the former is wrong on many levels (e.g., oversimplification, fear mongering, and a categorical mistake). It would be better to understand that government IS the people--participation is required.

[BJ Feng]

Many people say they would pay more money for products if it would keep jobs in the United States. Of course, when it comes time to pay, the pollsters are gone and the folks end up buying foreign products rather than pay twenty cents more.

The "Made In the USA" campaign was a miserable failure, which is why you don't see it anymore. Those who advocate everyone pull together should first look in the mirror and think what THEY are doing to help. A recent study showed that most people in London have done absolutely nothing to reduce their energy consumption, even though when polled, they want the country to save more.

It's easy to want other people to save energy or to buy products made in America. It's quite another to actually do it yourself, which why the whole, let's smoke pot and just love crap is long dead.

[BJ Feng]

When does government become big government?

[anne]

Jared Bernstein is among the premier labor economists in America, but fools wouldn't have a clue.

[anne]

"GOVERNMENT IS THE ENEMY OF THE PEOPLE."

Happily, the capitals help us understand. What we need is no government, like, say, the Somalian vision of the George Masonites. I am there.

[Lafayette]

Reich: If the purpose of capitalism is to allow corporations to play the market as aggressively as possible, the challenge for citizens is to stop these economic entities from being the authors of the rules by which we live.

Tough stuff, this.

First of all, the above is not the "purpose of capitalism". Its purpose, to my mind, is the allocation of resources with the intent of making a profit.

Of course, neither does my definition mean that the ethics of behaviour are suspended in the effort towards the above objective, make profits. There are conflicting interests, however, that raise their ugly heads.

Public corporations have a duty to stockholders to make a profit, no doubt. Private corporations have the same duty, but the profit is for its individual owners. The problem rises when the profit objectives clashes, as it does now, with the interests of the means employed (staff) to operate a business.

It is obviously in a company's interest to operate at the lowest possible cost, thereby maximizing its profit. However, if that means that jobs are dislocated abroad, how does that serve the local market in terms of providing the disposable income needed by consumer, who also work for corporations? It certainly doesn't, it clashes with that fundamental economic necessity.

Does that mean that capitalism is at odds with itself? In a sense, yes. Too much dislocation of work abroad to serve corporate objectives of addressing its local market with the cheapest possible costs, thereby maximizing its return-on-investment, establishes a conflict.

A market is constituted by two components, supply and demand. The corporations are suppliers, but the demand is provided by consumers. Where do consumers obtain the wherewithal to consume if not from their work, which they exchange for a salary?

There is no singular answer, therefore, to the question of "Where is a corporation's larger duty? To serve its own interests by maximizing profit or to serve the interests of the economy by providing decent salaries?"

There's a balance that must be sought, somewhere in between.

But, I doubt that Reich's approach is the best. Just as you cannot legislate love, neither can a nation legislate corporate ethics. Ethics are a set of moral values that inculcated by a society upon its individuals.

If a society inculcates, for instance, only the values of self-interest ... then there is not much one should expect of a corporation other than to maximize its profits and serve the bounded interests of its stockholders -- who, of course, are also the very people compensated to run corporations.

Business ethics are like the air we breathe. We take it for granted that the air is clean. But, when it becomes polluted, it is our health that is at stake. When business ethics become stained by an excessive motive to maximize profits, then that purpose only serves one side of the supply/demand equation. The economy must therefore inevitably suffer the consequences.

What's "an excessive motive to maximize profits"? One where the profits accrue to a select minority to an extent that is unfair as regards the whole.

[german_reader]

@anne,

it good to know that I'am not the only one, who doesn't know, what Reich is exactly talking about.

@robertdfeinman,

don't be to convinced that in Europe anything is better. It may not be as bad as in the US, but the trends are the same. Many American liberals, progressives seem to have an idealized picture of Europe in mind, based on the reality of the seventies, eighties and early nineties. Since then much has changed. Supply-side economics rules and the EU is a resolute defender of neoliberal reforms. France until recently has resisted most of the supply-side delusion you find in other countries, but I fear under Sarkozy it will follow the trail. Germany has already destroyed ( against the will of the population ) much of its traditional welfare state and is trapped in a single-sided supply-side ideology, which has slowed down the economy for years.

Our evironmental policy may be more advanced than that of the US. But that's not mainly the result of a deeper understanding of ecological necessities or greater responsibility. Europeans in general are not more prudent than Americans ( I wished they would be ). We're simply confronted more intensely with the consequences of dense population and scanty resources. Europe today faces much of the challenges the US will see a few decades from now. And I'am sure that American politics ( and the American voter ) will finally accept some of the policies Europe already has chosen.

In regard to capitalism I believe that we need much more direct democratic control of economic policy or economic power and a stricter division between political and economic offices. It's a scandal, that the former CEO of a company, which is intensely involved in widespread fraud with public financed commissions, can be Vice-President of the US, and it's a scandal that former secretaries of state ( Minister ) here in Germany can work after their political office for companies, over whose interests they decided as politicians ( for example in the energy sector ).

[adjas]

Competition is the key, America will face competition from other countries in the world, and will evolve for the better. Do you remember the 80's and Japan. America evolved and raced past Japan.

I reckon there is no linear path towards a better place, it bounces and up and down just like the stock market. But I am a firm believer the world as a whole is headed somewhere better, in the long run, barring short-term pains and gains.

This goes for government too, maybe a bit of an optimist, but I do believe we will govern ourselves better in the future.

Example, the internet, how I love it. I can't possibly contemplate life without access to it.

[esb]

german_reader ...

What you are missing is that Richard Bruce Cheney is, in operational fact, the executive of government in the United States of America.

We have a "saying" over here ... "the elephant in the room" ... which means the item which matters most but which must remain unspoken.

Ane the current elephant in the room is the fact certain that RBC has his stubby little fingers all over the levers of policy and power in our (currently) sickly little republic.

But fortunately, we have another little saying ... "and this too will pass." And Cheney will also pass, leaving behind the same unpleasant olfactory memory as a certain stain on the bottom of a shoe.

[calmo]

Wer sie ist diese german_reader, cm?

[reason]

Everybody seems to be missing the point here (especially Reich). The point is accountability. In Democracy the government is accountable to the people. If it not being held accountable there are two possible culprits. The democratic institutions or the people doing the voting. That is where he should be pointing the finger. (In the case of the US I think both are very sick).

P.S. That is why RealPC is wrong. Government IS of its nature repressive (although where there are conflicts of interests repression of somebodies interest one way or another is inevitable). That is why we developed systems of checks and balances to hold it accountable.

Robert..
As Coase proposes the market will find equilibrium and allocate the externalities. Why do you think that? I find it a curious statement. In a sense the market will allocate the externalities, but unfairly (that is the nature of externalities, they aren't identified with the source).

[reason]

German reader...
wrt Your story re revolving doors. The difference between Germany and the US is that in Germany it is a scandal.

[reason]

Sorry that should read
.. it is seen to be a scandal.

[Lafayette]

g_r: Since then much has changed. Supply-side economics rules and the EU is a resolute defender of neoliberal reforms.

Bollocks. That is really OTT.

Europe is swinging back to center, that's all. Of course, if Germany wants to maintain a wage rate that is 40% more than the European average and a work-year that is 15% less, then that is Germany's business.

But, don't come complaining here about the pauperization of the German employee, because it won't hold water.

[PeterRabid]

Anne -

"I have no idea what Robert Reich is talking about other than all the world is this and all the world is that and this and that are problems and unhappy problems for reasons that are too mysterious to be ever made clear."

I think you do not want to understand. This disturbs me since you seem to be the arbiter of right and wrong among comments on this blog.

Therefore, I have cut and pasted his main points below, in an attempt to overcome your resistance and that of others.

quote

corporations and elites ... undermine the government's capacity to respond to citizens' concerns

no democratic nation is effectively coping with capitalism's negative side effects

The result is an arms race for political influence that is drowning out the voices of average citizens

the challenge for citizens is to stop these economic entities from being the authors of the rules by which we live.

industries ... often wreak havoc on the environment

But citizens living in democratic ...[society] have the ability to alter the rules of the game so that the cost to society need not be so great

unquote

These ideas have all been discussed before on this blog, and most regular commenters have expressed their substantial agreement.

I would add (alltho this is open to a lot more discussion) that Reich's underlying theme, (that when democracy and capitalism conflict, democracy must prevail) appears to be derived from Rawls's first principles, that
1) Each person must have an equal right to basic liberties
2) Social and economic inequalities are to be arranged so that they are reasonable expected to be to everyone's advantage, and attached to positions and offices open to all.

Finally, REICH IS NOT SAYING THAT CAPITALISM IS FAILING, HE IS SAYING THAT DEMOCRACY RISKS FAILING.

Or, that it's basically our fault

which is perhaps what we don't want to understand.

[PeterRabid]

P.S. Of course, Reich suggests no specific solutions in this article. I suppose we'll just have to buy his book. That's capitalism for you!

[anne]

Thank you for the fine abstraction, which helps, Peter.

The points of complaint on increasing structural limits to democracy, I agree with here. Generalizing globally, leaves me bewildered. But, what are missing here are specifics that can only be answered by reading the book. I will read the book in the coming few weeks.

[anne]

http://www.nytimes.com/2007/09/02/business/02shelf.html?ref=business

September 2, 2007

Dangers of a Turbocharged Economy
By STEPHEN KOTKIN

IT'S Labor Day weekend, so let's talk about labor. (Capital absorbs our attention most of the other 364 days of the year.)

Around 140 million people are employed in the United States. They are engaged in work like governing, manufacturing, health care providing, retailing and researching (as well as suing).

This gigantic army of laborers, argues Robert B. Reich, has morphed into a nation of consumers and investors, rather than citizens. "Supercapitalism," his 11th book, seeks to explain why this supercharged economic system is a civic problem, and what can be done about it.

Mr. Reich, who teaches at the University of California, Berkeley, does not rip into opaque hedge funds and demand their regulation. Nor does he harp on lax government regulation of credit and mortgage practices. On the contrary, he criticizes many of the usual liberal fixes directed at the "excesses of the market." His book is smart and compelling, if ultimately toothless.

Born in 1946, Mr. Reich served as labor secretary under President Bill Clinton, the avatar of the have-it-all baby boom generation. Equally significant, though, is that Mr. Reich's government service dates back to the administrations of Gerald R. Ford and Jimmy Carter — that is, to the 1970s, the decade when America's immediate postwar economy, a middle-class bonanza like no other, began to give way to today's upper-class bacchanalia.

It was during what Mr. Reich aptly calls the Not Quite Golden Age, from 1945 to 1975, that America prospered, income inequality fell and most people trusted in government. Then, thanks to technologies like shipping containers and the Web, companies suddenly confronted brutal competition. After that, there was no going back.

Consumers got more choice and lower prices, while the people on Main Street became investors. Together, newly powerful shoppers and shareholders of this supercapitalism drove a decline in labor unions and a frenzy by corporations desperate to buy some market advantage in Washington.

"You and I are complicit," Mr. Reich writes. Our "great deals" are somebody else's lower pay and some corporation's lobbying.

We are hypocrites, too, he says.

One of the book's examples of consumers' hypocrisy has to do with canned tuna. J. W. Connolly, former president of Heinz U.S.A., which was the parent company of StarKist, explains that "consumers wanted a dolphin-safe product," but "if there was a dolphin-safe can of tuna next to a regular can, people chose the cheaper product. Even if the difference was a penny." The company terminated its higher-cost effort to protect dolphins. After all, it's a business, beholden to consumers and shareholders.

With such vignettes culled from the news media, Mr. Reich disembowels proponents of corporate "social responsibility." He shows that companies like Wal-Mart are operating legally yet being shamed into incurring social costs that their competitors are not. Critics' campaigns are a misleading diversion, he argues, because they confuse businesses with what they can never be: public interest bodies....

[anne]

"Democracy is not mob rule. It cannot work by the majority taking what they want from the minority. It can't work by having the poor take from the rich whenever they feel entitled. This is the democracy of Africa, whereby the tribe that manages to win the election takes everything for itself."

Always ignorant prejudice, all the time.

[Lafayette]

adjas: Competition is the key, America will face competition from other countries in the world, and will evolve for the better.

It's the key, is it? Or the lock to be opened?

In this circumstance, the key is an abundance of talent/skills put to objectives and "financially enabled" by capital. Decent jobs are what's in the box.

The Treasure Box is locked and only the right combination will do. For the moment, America seems fixated on only the profits bit, the talents/skills can go to hell. That's not the right combination.

Neither is a nation that foregos saving for spending and thus builds a mountain of debt in foreign hands. Which is what America has been doing since the 1960s.

Does anyone with a level head presume that such can go on forever and nothing must change? Methinks not.

[Cyrille]

"g_r: Since then much has changed. Supply-side economics rules and the EU is a resolute defender of neoliberal reforms.

Lafayette: Bollocks. That is really OTT."

Well, UMP (the current ruling party in France) has explicitly stated that its policy would be "relance par l'offre", which is pretty much the exact translation of supply-side economics. So no, it's not Europe going back to center but going with the worldwide (with the exception of Latin America I guess) shift to the right.

[wjd123]

And yet a sense of political powerlessness is on the rise among citizens in Europe, Japan, and the United States... In short, no democratic nation is effectively coping with capitalism's negative side effects.

This fact is not, however, a failing of capitalism. ... Capitalism's role is to increase the economic pie, nothing more. ... Democracy, at its best, enables citizens to debate collectively how the slices of the pie should be divided and to determine which rules apply to private goods and which to public goods. Today, those tasks are increasingly being left to the market. What is desperately needed is a clear delineation of the boundary between global capitalism and democracy-between the economic game, on the one hand, and how its rules are set, on the other. If the purpose of capitalism is to allow corporations to play the market as aggressively as possible, the challenge for citizens is to stop these economic entities from being the authors of the rules by which we live.--Robert Reich

Saying that the only role for global capitalism "is to increase the economic pie, and its purpose "is to allow corporations to play the market as aggressively as possible...." makes for anti-social behavior by corporations with capitalism being the enabler.

Aren't corporations "legal individuals" and don't individuals have to develop virtues in order to fit into the society in which they live? If global capitalism inhibites the discipline necessary for corporations to develop the virtues necessary for life in a democracy then how can Reich say that the inability of nations to cope with capitalism negative side effects isn't a failing of capitalism itself? Global capitalism is undermining corporate virtues, and there isn't much nations can do about it without international government setting the rules. National rules can be easily bypassed in a world of global capitalism. To pit global capitalism against democratic nationalism makes arguing for national democratic rules to correct capitalism's negative side effects a fools errand.

For instance the New York corporate constituency statute allows corporate directors to consider ...the effects that the corporations actions may have...upon...current employee, retired employees,...creditors,...[and] the ability of the corporation to provide...goods, services, employment opportunities and employment benefits and otherwise to contribute to the communities in which it does business....NY 1991. Those guidelines seem unrealistic in a global economy, where maximizing the economic pie is the only role of capitalism when it is so easy to escape national rules or state guidlines that might inhibit corporations from playing as agressively as possible to grow the pie. New York's guidelines allow CEOs to remember thieir social responsibilities. The state seems to be saying maybe corporations shouldn't consider playing as aggressively as possible when there are social responsibilities involved. Besides how long can a corporation use public relations in place of good will before they become reviled?

Putting aside the question of how corporations are to develop the virtues of good corporate citizens in a capitalistic global economy and what their failure to do so means for democratic governments let's pose a narrower question of how we could tell a good corporate citizen from a bad one. What criterion might we use to do so?

In his book Ethics and Excellence: Cooperation and Integrity in Business, Robert C. Solomon offers this example using a different view of the ultimate purpose of corporations.

The Aristotelian approach to business presupposes an ideal, an ultimate purpose, but the idea of business in general is not , as my undergraduates so smartly insist, to make money. It is to serve societies demands and the public good and be rewarded for doing so. This ideal in turn defines the mission of the corporation and provides the criteria according to which corporations and everyone in business can be praised and criticized."

What is Reich's criteria for praising and criticizing business? How close they come to using aggressive tactics to grow the economic pie. Not very sociable is it. By those criteria is it any wonder that corporations would believe that polluting, for example, is a byproduct of their role in a capitalist society. It not only dissolves them, corporations as individuals, of their social responsibility but it also inhibits the development of the discipline necessary to develope civic virtues.

I think that the way Reich presents the dilemma of global capitalism and democracy makes solving the dilemma harder. "A clear delineation of the boundary between global capitalism and democracy..." isn't what is needed. What is needed is a system that can be effective in sustaining democracy in a global world of free trade. Reich's boundary is meaningless in that world without international goverment with democratic values.

Reich's definitions and idea of what is needed to solve the dilemma also fits nicely with the conventional wisdom of economists today that most of the problems with free trade can be solved by a better distribution of its benefits. That may be necessary but it's far, far, from sufficent.

Finally, Reich seems to be conflating society with government. It was government that made the grand bargain of free trade over societies objections. And most of society is still complaining today.

[PeterRabid]

"Democracy is not mob rule. It cannot work by the majority taking what they want from the minority. It can't work by having the poor take from the rich whenever they feel entitled. This is the democracy of Africa, whereby the tribe that manages to win the election takes everything for itself."

Democracy is not mob rule. It cannot work by the POWERFUL taking what they want from the POWERLESS. It can't work by having the RICH take from the POOR whenever they feel entitled. This is the democracy of ______, whereby the tribe that manages to win the BOARDROOM takes everything for itself.

Fill in the blank with whatever you think fits best.

[wjd123]

Sorry I should have ended my block quote after criticize. I'll do so not

[PeterRabid]

Anne,

Yes, you are right to mistrust generalizations. I tend to enthuse too PeterRabidly

[anne]

http://www.nytimes.com/2007/09/02/business/02shelf.html

One of the book's examples of consumers' hypocrisy has to do with canned tuna. J. W. Connolly, former president of Heinz U.S.A., which was the parent company of StarKist, explains that "consumers wanted a dolphin-safe product," but "if there was a dolphin-safe can of tuna next to a regular can, people chose the cheaper product. Even if the difference was a penny." The company terminated its higher-cost effort to protect dolphins. After all, it's a business, beholden to consumers and shareholders.

[Again, thank you Peter. I was wrong and likely would have given no reasonable thought to Robert Reich's argument had you not argued in turn. This weekend, I will read the book. This disturbing anecdote alone is bothersome reason enough.]

[DEW]

Robert Reich would have been just as correct to argue that the Labor Movement, Environmentalists, or any other collective the lobbies are "killing" Democracy. As with most propaganda, Reich's comments contain enough factual information and logical comment to have some merit. The problem, of course, is that it is then comingled with opinion and distortions as to make the piece simply another form of propanganda for a particular point of view. Nonsense such as this piece do little to promote effective government. I would suggest that, if it were not for corporations, many of you would not exist, that is, you would never have been born. I have often wondered why, if subsistence farming or individual entrepreneurship were such an ideal life styles, that more of those who dominate such blogs as this are not out tilling some plot of arable land in Eastern Colorado or central New Hampshire or running a small, family business in West Texas.

To paraphrase an older adage, corporations don't kill democracies, people do. I live in an area in which no Republican has been elected to public office in literally decades. In fact, in most elections, including primaries, there is no opposition to the Democratic Party's slated candidate. Those slated candidates are chosen by a small group of individuals, meeting in a secret session, the location of which is known only to those invited to participate. Reporters who have attempted to learn more about this process have been informed that they might wish to think about their personal safety. If someone who is not a member of the inner circle of the Democratic Party wants something done is this county or legislative district, they know who they must pay and how much. What I find interesting is that Robert Reich has made several appearances with these political powers and has raised money to support their causes.

I find most of the comments, from either the right or the left, in these blog discussions to be based in gross ignorance or simply the worst forms of hypocrisy. Most of you care little for rational discussion, prefering to impose your views on those who might have the courage to disagree with you. Frankly, I find very little difference between Al Franken and the late Jerry Falwell when it comes to democratic fundamentals.

[Robert]

Reason,
“Robert..
As Coase proposes the market will find equilibrium and allocate the externalities.
Why do you think that? I find it a curious statement. In a sense the market will allocate the externalities, but unfairly (that is the nature of externalities, they aren't identified with the source).”

I think you’ve encapsulated my affinity for the beautiful simplicity of Coase’s theorem. A free market will not ‘fairly’ or unfairly allocate externalities. The market allocates absent of any ethical concerns. The genius is in what Ron has not said here. ‘Fair’ allocation is the government’s (i.e. citizens) role in the great game of capitalism to ensure that we as citizens are not at the mercy of the market’s decision rules such as mc=mr. This is why I love economics as a science. The study and observation of markets and their fundamental rules should provide insight to their shortcomings relative to social welfare. Succinctly, externality allocations, max profit, are economic laws that exist without concern for the subsequent meta-ethical evaluation of the markets affect on society’s wellbeing. This concern is left to us as citizens of a nation under a chosen style of government, not a consideration for the roles we play as consumers and suppliers.

[Robert]

DEW,

These ‘blogs’ are the place for citizen debate. My intolerance rests with finger wavers such as you who launch volleys of judgment and character assassination. Rather than arguing points with solid premises and conclusions. How do you know that some participants are not small business people or family farmers? Just be careful you don’t fall and bump your head climbing down off that high horse, buddy.

[anne]

"I live in an area in which no Republican has been elected to public office in literally decades. In fact, in most elections, including primaries, there is no opposition to the Democratic Party's slated candidate. Those slated candidates are chosen by a small group of individuals, meeting in a secret session, the location of which is known only to those invited to participate. Reporters who have attempted to learn more about this process have been informed that they might wish to think about their personal safety."

What area is that, or is that a matter of personal safety as well?

[wjd123]

Least anyone get the wrong impression from my failure to close by blockquotes the following is my opinion and not Salomon's

What is Reich's criteria for praising and criticizing business? How close they come to using aggressive tactics to grow the economic pie. Not very sociable is it. By those criteria is it any wonder that corporations would believe that polluting, for example, is a byproduct of their role in a capitalist society. It not only dissolves them, corporations as individuals, of their social responsibility but it also inhibits the development of the discipline necessary to develope civic virtues.

I think that the way Reich presents the dilemma of global capitalism and democracy makes solving the dilemma harder. "A clear delineation of the boundary between global capitalism and democracy..." isn't what is needed. What is needed is a system that can be effective in sustaining democracy in a global world of free trade. Reich's boundary is meaningless in that world without international goverment with democratic values.

Reich's definitions and idea of what is needed to solve the dilemma also fits nicely with the conventional wisdom of economists today that most of the problems with free trade can be solved by a better distribution of its benefits. That may be necessary but it's far, far, from sufficent.

Finally, Reich seems to be conflating society with government. It was government that made the grand bargain of free trade over societies objections. And most of society is still complaining today.

[anne]

J. W. Connolly, former president of Heinz U.S.A., which was the parent company of StarKist, explains that "consumers wanted a dolphin-safe product," but "if there was a dolphin-safe can of tuna next to a regular can, people chose the cheaper product.

[What occurs to me is that I shop at several wildly popular stores that seem to show this is not true. Whole Foods makes a point of carefully explaining to customers why certain products are or are not carried, or why selected products are more expensive. But, the chain and individual stores at which I shop have been so popular they have changed the way competitors operate.

[The Prius is a wild success, and while I hear that General Motors will have a sort of Prius in another 5 or 10 or 15 years I could care less driving happily now.]

[anne]

Remind me, at least, never to buy StarKist tuna.

[lightly]

I'm reading Assault on Reason right now. In it, Gore points out that when radio emerged after WWI it was immediately subjected to regulation in the United States but not in Europe. We need only consult history to recall the telling difference in the uses radio was put to by Hitler and Mussolini versus the way it was deployed in the regulated U.S. markets. Since Reagan deregulated U.S. media, we have seen history repeat itself. Regulation of mass media by governments is clearly a fundamental necessity if citizens of democracies are to have any public forum that offers meaningful discussion of civic matters.

[BJ Feng]

"Regulation of mass media by governments is clearly a fundamental necessity if citizens of democracies are to have any public forum that offers meaningful discussion of civic matters."

And how is government to regulate meaningful discussion? The same way Chavez regulates discussion in Venezuela? The same way Mugabe regulates discussion in Zimbabwe? This kind of argument assumes that the ordinary citizen is just too stupid to figure things out and needs the elites to tell them what is right and what is wrong.

[Winslow R.]

Corporate media monopolies, at least print and television do seem to have recently concentrated power while at the same time they have had their power dispersed through internet access.

Radio still seems to retain its hold given the lack of a mobile audio internet. Digital radio doesn't seem to taking advantage of its full potential.

Even radio seems set to unfold as mobile phones such as the iPhone have some promise of providing audio and visual access to information at any location.

It would seem the next area of deregulation would be in the cellular phone market to make universal access to information more of a right rather than a privilege.

New government regulations sometimes seem more aimed at keeping control of the rapidly unraveling information dispersal machine rather than enabling its unraveling.

[Lone Fist]

There is a serious flaw with this piece, which essentially negates it entirely.

The very first sentence exposes the problem: "Free markets were supposed to lead to free societies."

This demonstrates an assumption, one which unfortunately simply is incorrect. That assumption is "free markets" and anyone who has any dealings at all with actually attempting to trade in any market whatever knows full well that there is not a useful example of an actual "free market" in existence. ALL markets are controlled, and the controllers are always and only at work for those so-called "capitalists", who in turn control the controllers, and as a result any discussion based on an idea of "free markets" is nonsense.

[Daniel]

lightly

Look more closely at your history of radio. When commercial radio stations took to the air, President Hoover was not quick to regulate it. His radio commission had no teeth. When commercial interests withdrew their money (their radio spots couldn't be heard over the din of unregulated frequencies)the stations themselves petitioned congress for a regulatory body with penalties for infractions. This gave us the FCC.

[calmo]

"looking (more) closely"
so market forces in the US worked differently from those in Europe? Was it the toothedness of the regulations or the newness of a fledgling industry (a poor understanding of bandwidth, radiation characteristics of antennas and whatnots)? The Europeans, speaking several languages, are used to cross-talk? That culture, then, was less entrepreneurial and stratified than the new hustling America --producing less radio stations and less confrontational radio stations?

[german_reader]

@Lafayette,

perhaps you should inform yourself better before separating such a poor comment.

Wage costs in Germany are not 40% above the ( WestEuropean ) average. According to our federal agency of statistics costs per hour worked in Germany for the total economy in 2006 were 28.7 euros. That's rank six in WestEurope or less than 6% above the WestEuropean average, which is 27.1 euros ( EU15, includes Spain, Portugal, Greece with very low wage costs around 17 euros ). If wages in Germany were really the problem we wouldn't be world champion in goods exports, have an exploding trade surplus and had much higher ( relative ) employment in manufacturing - which is most affected from international competition - than the US. We had this discussion a while ago, it's boring.

Wages in Germany grew more slowly over the last decade than in any other G7 or OECD-country except Japan.Corporate profits in Germany rose even faster than in the United States. Their share of GDP is now higher than in the US, while the percentage for labour income is lower. This is partly explainable by more self-employed in Germany and more part-time work. But the sharp downward trend in labour income has other reasons. It's the result of more or less voluntary wage restraint by workers under the pressure of globalization ( believe it or not, but unions can be a constructive element in the economy ), drastic job cuts in the public sector from a very moderate level ( lower than in the US ), job losses in construction and other domestic sectors of the economy and a single-sided ( supply-side ) tax policy, which encourages the maximization of profits.

Taxes on corporate profits have fallen steeply.In WesternEurope only Ireland has now lower real taxes on corporate income.The sale of corporate shares by institutional holders is completly tax free. Hedge funds ( and hedge fund mangers ), private equity have similar tax privileges as in the US or the UK. Taxes on capital in the UK are nearly twice the level of Germany. At the same time the German governments of the last years ( Schroeder, Merkel ) eliminated tax subsidies for commuting to work, private house builders ( private orders in the construction sector have fallen 38% compared to last year ), home offices... and raised the VAT tax from 16% to 19% ( which affects mostly low and middle income households ).

All this was accompanied by sharp reductions in unemployment benefits, pensions, the introduction of additional fees for health care services and so on. Workers are not only confronted with stagnant or falling income, but also with rising expenditures for consumption and the growing necessity to finance their future pensions or an own house. The average full-time worker now receives after 45 years of work a public pension slightly above the German poverty treshhold ( 856 euros ). And the trend is downwards. Most people have less money than ever before to save more for additional private pensions or a home. This is indeed a "pauperization of the German worker".

And worst of all, the predictions of the supply-side propagandists prove to be empty promises. Paid employment ( in fulltime equivalents ) is now lower than in any other upswing in the past. The economy is slowing down again after a single year of export driven growth. The domestic sector is dragging down the county, because stagnant incomes of most citizens don't create additional demand.( Remember the better growth in the US or the UK are mainly caused by higher consumption, a boom in construction and an exploding indebtness of the population. Total debt, private and public, in Germany is 60% of the US level.) And a rising tide does not lift all the boats.

I know that most Americans are not very much interested in what's happening in the rest of the world ( even, if they live there ). And I don't expect any crocodile's tears about the "poor German worker". The main reason I quote it is, that I know the situation here best and it's a perfect example on what's happening under a simple-minded supply-side ideology. Nearly everywhere where supply-side rules, workers incomes are stagnant or falling, redistribution from labour income to corporate profits happens and the rich become richer, while the middle class treads water and the poor face income losses.
You cannot criticize similar developments in your own country and say at the same time it's irrelevant, when it's happening in Germany or any other part of Europe.

You've said several times that the qualitiy of life is so much "better here in Europe"( it is ). Are you really surprised that we try to defend our lifestyle against the greed of a rich minority ?

[Lafayette]

g_r: According to our federal agency of statistics costs per hour worked in Germany for the total economy in 2006 were 28.7 euros. That's rank six in WestEurope or less than 6% above the WestEuropean average ...

Fine. I stand corrected.

The World Economic Forum (in Geneva) -- that neo-liberal think tank that puts on the Davos circle-jerk of business potentates -- places German at fifteenth on their scale of world competitiveness.

Yes, German exports are even more than the US, and world champions. One industry sector does not sustain an entire economy, however.

In terms of national productivity, it is 8% less than the US -- largely due to the lower number of hours worked annually (1440 vs. 1731, or 20% less) -- based upon OECD estimates in 2005.

If wages grew less slowly in Germany over the last decade, look at productivity. People earn, by working, what they get paid in general. Germany is not China.

Every time I get into a give-and-take with a German national, its as if they are saying, "Oh, it could be better, but everything is OK ..."

Such apathy is remarkable. So what?, one might ask. So this: Fewer Germans are sunning themselves in the Balearics and more are doing so along the Baltic.

Machs nichts? (Maybe - it's the same sun after all ... ;^)

[Lafayette]

g_m: You've said several times that the qualitiy of life is so much "better here in Europe"( it is ). Are you really surprised that we try to defend our lifestyle against the greed of a rich minority?

No, not at all.

It is obvious enough that I think Americans have the wrong notion of "quality of life". They are workaholics, for one thing. And, its culture is skin deep.

Given that language is the vehicle of culture, one wonders where America is going. Language is as faddish as its culture. It is a society living in the future, and the present be damned (until the sheriff is there to turn you out of your sub-prime purchased home). Then it’s off to the blog to complain.

History is what happened five minutes ago and ancient history is what happened an hour ago. It's a pulsing dynamic country on the rush. (Over a cliff? Who knows?)

Having said all that, for the larger part of the 20th century it was the role model for the world, and particularly Europe which had given America so, so many immigrants. Many of whom came back to save Europe's sorry ass in two World Wars.

So, one must ask Role Model for what? Perhaps for a functional democracy that more or less ran the country decently -- at least until recently. And, a land of diversity that was able to consolidate itself into a nation with a common purpose -- the "pursuit of happiness".

Americans have little regard for history and most learn the warped version that Hollywood scenario writers concoct. The present generation has little respect for those previous -- whatever trials and tribulations, jubilation and misery the latter went through to build America. More so, shamefully, they've forgot largely what their forbears had learned.

That riches are not measured in dollars, but in general well-being. That they are not wanted "now, right away" but take great toil for a good many years. That hard earned money is the best, and easy earned money the worst.

They don't even know, for instance, that German immigrants, enticed out of Germany in the 19th century when it was beset with a famine, landed in Texas, with the promised land supposedly nearby. Many of them died, and those that didn't, who remained in Texas, for some reason wanted to remain "American" and not Confederate. They were hunted down and shot to a last man by the Texas Rangers.

Others in that group of German immigrants made their way up the Mississippi to plant their white wine vineyards along the river, which their offspring exploit to this day.

Who knows this about American history? How immigrants suffered, broke their backs laboring under conditions similar to those in China today, were treated like insects ... who knows? Who remembers?

Not the Masters of the Universe on Wall Street. That's for damn sure.

To be sure, we ALL have an opinion about "immigrants" today, don't we ...

But, I digress.

[reason]

Lafayette
In terms of national productivity, it is 8% less than the US -- largely due to the lower number of hours worked annually (1440 vs. 1731, or 20% less) -- based upon OECD estimates in 2005.
I know you have got a bee in your bonnet about the 35 hour week in France - but PLEASE productivity is defined per working hour!

[german_reader]

Lafayette,

thanks you for your reconciling answer.

I don't deny that not anything is perfect here in Germany or other parts of Europe. But I think some of your analysis is wrong. It's not the passion of us Europeans for short working hours, which makes the welfare state or fair working conditions for most people unsustainable in the long run. It's the wealth capture of a small minority ( not different from the US ), that is a threat to social stability and social fairness. All social security systems in WestGermany for example have surpluses ( while EastGermany due to high unemployment has deficits ). Under normal conditions the traditional German system works. And it was not only strong enough to manage the burdens of the reunification, but also flexible enough to make Germany one of the top performers in international trade.

Official numbers for Germany are always screwed by the ( until now ) poor performance of the East. You shouldn't forget that.WestGermany alone would rank some places higher in most comparisons. And WestGermany, not the East, is the prototype of the "German" model.

Productivity per hour worked in WestGermany for example is much closer to US levels than the national number ( in France it's higher ). And annual hours worked are averages. Most European countries have a higher share of part-time ( mostly female ) workers than the United States or Canada. This explains to some degree the low national numbers for some countries ( especially the Netherlands ). Full-time workers in Germany work 1690 hours per year ( compared to nearly 2000 in the US ). The average ( real ) weekly worktime for a full-time worker in Germany is 41 hours.

We have more vacancies than Americans. That's true. But we also have lower annual incomes from paid employment. The trade off between leisure time and income in Europe is not a cliché. Americans tend to define wealth only in material terms. Europeans have a broader definiton of "wealth". A good work-life balance is a part of it.

I think your impression may be screwed, because you're living in France. You cannot compare France to Germany. France has neither seen the rapidly widening gap between labour income and capital income we've had here in Germany nor had it the same exaggerated wage restraint. This explains to some degree the better economic performance of the French domestic market. And the French labour regulations seem to be much more strict than the German. Socialdemocrats from Germany often look with some envy to France, because the French have the courage to fight for their rights. Germany lacks this culture of civilian resistence.

Perhaps a last word on economic rankings. Are you really surprised that countries like the United States, which offer some of the best conditions for corporations and some of the worst for workers, always rank that high in comparisons initiated from employer associations or neoliberal think tanks? I believe Germany can learn a lot from Scandinavia, France or Switzerland, but much less from the United States ( in regard to labour conditions or social fairness ).

[Lafayette]

g-r: It's not the passion of us Europeans for short working hours, which makes the welfare state or fair working conditions for most people unsustainable in the long run. It's the wealth capture of a small minority ( not different from the US ), that is a threat to social stability and social fairness.

Not at all. It is threatening to social harmony, I agree.

But if you look how Europe got itself into the mess that has endured for about fifteen years now, it is due to labor rigidity (read inflexibility), high cost of labor (due to social charges) and unwillingness to work longer hours to produce more.

Let's look at each one of those items:
* Labor inflexibility means that resources cannot be allocated where most effectively employed. This is a legal rigidity, so when it comes to employing the young in unskilled or semi-skilled jobs, that youth finds that the jobs have gone to some point in the near-East of Europe. The European work force, in place, protected by stringent firing laws, prevents fullest youth unemployment -- because one someone exits the labor force on retirement, then the job is closed down as well and dislocated to a cheaper country.
* The high cost of labor is self-explanatory. No one in his right mind would open up an assembly line in mainland Europe today employing unskilled labor. The American manufacturer AMD did open up a semi-conductor foundry in East Germany, because German engineers had designed flexibility into the production process, but the plant employs less than fifty people. Unskilled labor has gone, gone, gone - whilst social charges have not diminished. However, Europeans are getting less and less for the social charges that they pay.
* The mere fact of working more hours increases productivity, contrary to some notions regarding the subject, which I respond to below.

[Lafayette]

reason: I know you have got a bee in your bonnet about the 35 hour week in France - but PLEASE productivity is defined per working hour!

You are right it is per hour worked, and is the OECD figure I was referring to. Perhaps I should have explained better what I meant.

Productivity can be improved by increasing production hours. The relationship between hours worked and output is not linear - even if productivity ratios are. This gives the wrong impression of how productivity works, because it is affected by economies of scale.

You can throw money ( read technology) at a production line and increase productivity by keeping manpower stable. You can increase manpower hours worked and get more out that increase than at the lower level of work week.

This is EXACTLY the stupidity of the French left when it introduced the 35 - hour week. It presumed that productivity in France, which is not all that bad, would not suffer if manhours worked were reduced. They even thought that less hours would create the need to hire more people, and therefore augment employment.

They were dead wrong, and France is stuck with a productivity level that is OK but not certainly not world beating. Worse, the manpower cost is higher (than elsewhere, meaning the Near-East and the Far East) in some unskilled and semi-skilled areas, just where unemployment is at its highest. Why did Peugeot open a plant in Slovakia? Why is Renault building its lowest-cost car in Romania? Both examples of manufacturing are semi-skilled. The engineering and design work is done in Paris not Peking, yes ... for the moment.

Manufacturing used to employ significant numbers of people in Europe. That is no longer the case. (I can't tell you how many automated-plant projects I computerized that threw countless numbers of people out of a job. And I am not particularly proud of that fact.)

The services sector, which is presumed to replace production, produces good jobs for high-finance young bucks in Paris. (Or London, since many go there to get a training in English.) But, at the lower levels, it drives people to look at small jobs; e.g., cleaning the streets and cutting grass for City Hall. That is not could be called a "dynamic" force for employment.

[evagrius]

Lafayette; Just wait until the same problems crop up in the U.S., ( not that far away). What do you think wil happen then?

[Peter Schaeffer]

Lafayette,

"They don't even know, for instance, that German immigrants, enticed out of Germany in the 19th century when it was beset with a famine, landed in Texas, with the promised land supposedly nearby. Many of them died, and those that didn't, who remained in Texas, for some reason wanted to remain "American" and not Confederate. They were hunted down and shot to a last man by the Texas Rangers."

Where do you get this stuff?

Check out "The Handbook of Texas" (http://www.tsha.utexas.edu/handbook/online/articles/GG/png2.html)

In real life, Germans were welcomed and successful in Texas from very early on. There are parts of the state (The Hill Country) where people still speak German.

[cm]

german_reader: But, don't forget the demographic fact of young East Germans migrating to the West (where the (better?) jobs are). That skews (un)employment related statistics. And probably the migration is heavily biased towards those who can land jobs. For somebody who is (chronically?) unemployed, they won't move for being unemployed here vs. there, but stay put.

There are whole regions in the East which are "greying" (Vergreisung). The employable young move out, the unemployable stay, which includes the let's say 45+ and the unemployable below that age.

[cm]

BJ Feng: "This kind of argument assumes that the ordinary citizen is just too stupid to figure things out and needs the elites to tell them what is right and what is wrong."

Well, isn't that what we have now in the US? Media owned and controlled largely by unelected elites?

[cm]

german_reader: As you appear to be relatively new to this forum, I should probably point out that I'm an (ex) East German.

[Lafayette]

PS: "In real life, Germans were welcomed and successful in Texas from very early on."

Now, who is lying, The Texas Handbook or a reputable journalistic German production company, that spent a year on this documentary, concocting history regarding German ancestors for retransmission?

And, why should a reputable German TV station retransmit the documentary on both French/German television. Obviously a pinko-socialist revival to besmirch the beatific image of American history?

You cannot imagine the journalistic reporting on the US that we see in Europe, because it is not censored by the major channels. Try this report on the Kursk sinking on for size. And this. Both a tissue of journalistic lies? Have these reports been shown on American TV? I would really like to know, because political conjecture has it that Bill Clinton authorized the sinking of the Kursk.

Never mind ... I maintain what I said. Americans believe history as made by Hollywood, which is pap for the masses because it brings in Big Money.

The best reporting documentaries are coming out of Europe, IMMHO - where the yardstick is journalistic professionalism and not market ROI.

The point I am making is this: Ethical laxity has made money the professional yardstick in America across a great many domains of economic activity. The sub-prime mess is just one more on a long list.

Now, tell me how I am wrong.

[anne]

Thank you, Lafayette. I know little of the Civil War period, and never thought to look at how immigrant communities responded or fared.

[Lafayette]

Here is an interesting review of the European recruits as US Army volunteers during the Civil War.

France and the US are both "immigrant nations". Even one of France's most famous Frenchmen was an immigrant ... Napoleon came from Corsica (it was sold by Genoa to the French a year before his birth). Martin van Buren, eighth PotUS in 1837, was the first of American birth.

Both nations are dealing with an unprecedented volume of economic refugees (illegal immigrants). It's a difficult call for both nations, regardless of the fact that the US is a nation five times as populous as France.

What is worse is that the matter has become a political football in the US.

[Peter Schaeffer]

Lafayette,

"They don't even know, for instance, that German immigrants, enticed out of Germany in the 19th century when it was beset with a famine, landed in Texas, with the promised land supposedly nearby. Many of them died, and those that didn't, who remained in Texas, for some reason wanted to remain "American" and not Confederate. They were hunted down and shot to a last man by the Texas Rangers."

By the time of the Civil War there were more than 20,000 Germans in Texas. Are you really claiming that the Texas Rangers massacred 20,000+ Germans? Can you provide a shred of evidence to support such a claim?

A few more links that might help you get some sense of reality

“German Americans in Texas:Resources at the VC/UHV Library”
http://vrhc.uhv.edu/Bibliographies/gamericans2.cfm

“The German Settlements in Central Texas”
http://www.texasalmanac.com/history/highlights/german/

“Texas German History & Geography”
http://www.tgdp.org/historygeography.php

“New Braunfels, Texas”
http://en.wikipedia.org/wiki/New_Braunfels

[Lafayette]

PS: Are you really claiming that the Texas Rangers massacred 20,000+ Germans? Can you provide a shred of evidence to support such a claim?

Peter, have you any understanding how you are able to piss off a great many people. Me included.

What I related was that of a television transmission which I found interesting and have no reason to doubt. It was one of about three or four that are transmitted on ARTE in both French and German. This particular one was German in origin and, quite frankly, I think the Germans are incapable of journalistic dishonestly. It is simply not within their nature. Of course, I could be wrong. But, I seriously doubt it.

What is it with you, that you must enter every argument in detail and -- in this instance -- try obfuscating what MAY BE an historical truth. I DID NOT invent this story.

Look yourself, for the quite possible fact that it was true and has been broomed under the rug of Texan history.

Frankly, I could care less ... to each their own delusions. Mine are evidently different from yours. But, if I have any value whatsoever to this forum, it is to relate what is seen of the US from a very different pair of eyes.

That's what forums are all about. Diversity of opinion.

[anne]

Lafayette, do not fret, I believe that the story can esaily be found true and when I am in the library tomorrow will ask. I am interested in the story because I have a vague sense there were a number of population groups that were caught in the conflicting loyalties engendered by slavery and the Southern ending of the Union.

Though not remembering clearly, I think I found references to the divided loyalties and fierce local conflicts in letters even aming the family of William James; letters I use at times at the Houghton. I think there are oblique referrals by WEB DuBois, that I never understood before and never followed because I was after different ideas.

[anne]

WEB DuBois was writing early on of attempts to shade history from the end of the Civil War on, and I never questioned DuBois' observations since they explained so well the suppression of Blacks in the South quickly very quickly on war's end.

[Mark Thoma]

Only peripherally related, but thought this might be of interest:

The Long-Term Effects of Africa's Slave Trades

http://www.nber.org/papers/w13367

Can part of Africa's current underdevelopment be explained by its slave trades? To explore this question, I use data from shipping records and historical documents reporting slave ethnicities to construct estimates of the number of slaves exported from each country during Africa's slave trades. I find a robust negative relationship between the number of slaves exported from a country and current economic performance. To better understand if the relationship is causal, I examine the historical evidence on selection into the slave trades, and use instrumental variables. Together the evidence suggests that the slave trades have had an adverse effect on economic development.

[anne]

http://www.nytimes.com/books/00/11/05/specials/dubois-souls.html

April 25, 1903

The Negro Question
By NEW YORK TIMES

THE SOULS OF BLACK FOLK
Essays and Sketches.
By W. E. Burghardt DuBois.

It is generally conceded that Booker T. Washington represents the best hope of the negro in America, and it is certain that of all the leaders of his people he has done the most for his fellows with the least friction with the whites who are most nearly concerned, those of the South. Here is another negro "educator," to use a current term, not brought up like Washington among the negroes of the South and to the manner of the Southern negro born, but one educated in New England- one who never saw a negro camp-meeting till he was grown to manhood and went among the people of his color as a teacher. Naturally he does not see everything as Booker Washington does; probably he does not understand his own people in their natural state as does the other; certainly he cannot understand the Southern white's point of view as the principal of Tuskegee does. Yet it is equally certain that "The Souls of Black Folk" throws much light upon the complexities of the negro problem, for it shows that the key note of at least some negro aspiration is still the abolition of the social color-line. For it is the Jim Crow car, and the fact that he may not smoke a cigar and drink a cup of tea with the white man in the South, that most galls William E. Burghardt Du Bois of the Atlanta College for Negroes. That this social color line must in time vanish like the mists of the morning is the firm belief of the writer, as the opposite is the equally firm belief of the Southern white man; but in the meantime he admits the "hard fact" that the color line is, and for a long time must be.

The book is of curious warp and woof, and the poetical form of the title is the index to much of its content and phraseology. To a Southerner who knows the negro race as it exists in the South, it is plain that this negro of Northern education is, after all, as he says, "bone of the bone and flesh of the flesh" of the African race. Sentimental, poetical, picturesque, the acquired logic and the evident attempt to be critically fair-minded is strangely tangled with these racial characteristics and the racial rhetoric: After an eloquent appeal for a fair hearing in what he calls his "Forethought," he goes in some detail into the vexed history of the Freedman's Bureau and the work it did for good and ill; for he admits the ill as he insists upon the good. A review of such a work from the negro point of view, even the Northern negro's point of view, must have its value to any unprejudiced student- still more, perhaps, for the prejudiced who is yet willing to be a student. It is impossible here to give even a general idea of the impression that will be gained from reading the text, but the underlying idea seems to be that it was impossible for the negro to get justice in the Southern courts just after the war, and "almost equally" impossible for the white man to get justice in the extra judicial proceeding of the Freedman's Bureau officials which largely superceded the courts for a time. Much is remembered of these proceedings by older Southerners- much picturesque and sentimental fiction, with an amble basis of truth, has been written about them by Mr. Thomas Nelson Page and others. Here we have the other side.

When all is said, the writer of "The Souls of Black Folk" is sure that the only side interference of which the Freedman's Bureau was the chief instrument was necessary for the negro's protection from supposed attempts of his former masters to legislate him back into another form of slavery, yet he admits that "it failed to begin the establishment of good-will between ex-masters and freedmen." It is proper to place beside this, of course, the consensus of fair Southern opinion that the interference in question and the instrumentalities it employed were the cause of the establishment of an ill-will previously non-existent. Here is a point where Booker T. Washington, as a Southern negro, has the advantage of his present critic in this that he knows by inherited tradition what the actual antebellum feeling between the races was. Du Bois assumes hostility.

While the whole book is interesting, especially to a Southerner, and while the self-restraint and temperateness of the manner of stating even things which the Southerner regards as impossibilities, deserve much praise and disarm harsh criticism, the part of the book which is more immediately concerned with an arraignment of the present plans of Booker T. Washington is for the present the most important.

In this matter the writer, speaking, as he says, for many educated negroes, makes two chief objections- first, that Washington is the leader of his race not by the suffrage of that race, but rather by virtue of the support of the whites, and, second, that by yielding to the modern commercial spirit and confining the effort for uplifting the individual to practical education and the acquisition of property and decent ways, he is after all cutting off the negro from those higher aspirations which only, Du Bois says, make a people great. For instance, it is said that Booker Washington distinctly asks that black people give up, at least for the present, three things: first, political power; second, insistence on civil rights; third, higher education for negro youth, and concentrate all their energies on industrial education, the accumulation of wealth, and the conciliation of the South. This policy has been courageously and insistently advocated for over fifteen years, and has been triumphant for perhaps ten years. As a result of this tender of the palm branch what has been the return? In these years there have occurred: 1. The disenfranchisement of the negro. 2. The legal creation of a distinct status of civil inferiority for the negro. 3. The steady withdrawal of aid from institutions for the higher training of the negro....

[anne]

http://www.nber.org/papers/w13367

"The Long-Term Effects of Africa's Slave Trades"

Not peripherally but centrally related, and of considerable interest.

[Peter Schaeffer]

Lafayette,

You made a rather far reaching statement

"They don't even know, for instance, that German immigrants, enticed out of Germany in the 19th century when it was beset with a famine, landed in Texas, with the promised land supposedly nearby. Many of them died, and those that didn't, who remained in Texas, for some reason wanted to remain "American" and not Confederate. They were hunted down and shot to a last man by the Texas Rangers."

If something like that was true, it wouldn't be hard to find references online. Even if it was completely covered up in English, why not search the German language Internet?

I find your faith in a TV show surprising. In the United States it is a cliche that "you can't believe what you hear on TV"... And for good reason.

I am sorry if I seem detailed oriented to you. In my view, I am part of the "reality-based community" and getting one's facts right counts. Other folks prefer a more impressionistic view of the world. To each his own.

[reason]

http://www.tsha.utexas.edu/handbook/online/articles/NN/qfn1.html

[reason]

http://www.ncobrief.com/index.php/archives/un-civil-war/

Texas was put under martial law, and the supreme military commander was a foppish and overbearing little martinet named Hebert, who did much to make himself detestable to even supporters of the Confederacy. But what ignited resistance in the Hill Country, and farther north, around present-day Dallas, was the institution of conscription. Texas had poured 25,000 volunteers into the Confederate Army during the first year of the war. But volunteers were not enough, and in the spring of 1862 legislation passed which authorized the drafting of every Anglo (white) male between the age of 18 and 34… shortly thereafter, it was changed to 17 through 50. Resistance was instant and furious among Unionists. A party of 65 Unionist men from the Hill Country attempted to flee across the Rio Grande; they were ridden down by Confederate troops along the Nueces River, and half were killed outright or executed out of hand. In following weeks, another fifty men in Gillespie County, around Fredericksburg, were executed… many of them by Confederate vigilante gangs. It was said bitterly for decades afterwards, that more were killed in the Hill Country by such gangs during the Civil War than were ever killed by Indians, during the war or after it. A footnote in the history books, if even noted to begin with.

The experience of the Civil War had, I think, the effect of drawing the Texas German colonies into themselves, and emphasizing their distinct character, rather than diffusing amongst their neighbors as similar German enclaves did in the northern states. For they were long in forgetting what had been done to them, by their neighbors, and fellow Texans.

Wasn't hard to find.

[jan perlwitz]

@Patricia:

Patricia, you wrote:

"The markets today are not a reflection of people's innate needs and desires. Our "needs" and desires are being manipulated by the rich power elite for ever-increasing profits that they have no rational need of, distorting the market."

Your statement suggests that the discrepancy between markets and people's "innate needs and desires" are some kind of distortion of the markets, which implies there could be markets for which such a discrepancy doesn't exist.

Has there been any market economy in any time of history for which this discrepancy wasn't prevalent? I doubt that.

The first goal of any capitalist economic activity someone undertakes is to accumulate capital, i.e. to make profit to increase capital, but not to serve people's needs and desires. People's needs and desires only exist for the markets as far as they serve capital accumulation. For instance, hunger in this world by itself, the basic need for food has never been the first reason to produce any food in capitalism. A need w/o buying power just doesn't exist for markets at all.

Thus my alternate point of view is that the discrepancy between people's needs and desires and what the markets provide isn't the result from any distortion of markets. It's an immanent basic feature of market economy or capitalism. There is no need for assuming omnipotent powers who manipulated markets and society for their own goals.

[Peter Schaeffer]

reason,

Kudos for turning up a factual reference. A detailed article can be found at The Nueces Massacre, also known as the Battle of the Nueces by Robert G. Schulz, Jr. Amazon has a book on this event, Death on the Nueces: German Texans, Treue Der Union.

Either 35 or 36 men died on the Nueces or later at the Rio Grande. A monument to their deaths is in Comfort, TX (see Treue Der Union Monument). It is only one of six places where the US flag flies a half mast permanently and the only one where the flag has 36 stars.

However, it is a myth that Texas Germans were predominantly pro-Union. They were in fact, strong supporters of the Confederacy and apparently more pro-secession than Texas Anglos. See Letter From Texas: Gott Mit Uns for a long article on the subject.

[Lafayette]

PS: In the United States it is a cliche that "you can't believe what you hear on TV"... And for good reason.

I happen to agree. I don't watch television in the US, because I sense it is warped by private channels addicted to the audiometer in pursuit of selling advertising.

I am sure there are good documentaries that must show up, but I suspect they may be "politically correct" in content. At least those I have seen seem to have been milquetoast in comparison.

The BBC in Europe does some first-rate investigative reporting -- everywhere, not just the UK. This has set the tone in the rest of Europe for such reporting and it is catching on -- there's a demand for it.

It is getting increasingly difficult to hide from the world information that one would prefer not become public knowledge. That is goodness since it leads inevitably to less manipulation of public opinion by vested interests.

It is also risky ... the organization "Reporters without borders" notes dozens of reporters murdered throughout the world for poking their noses where they should not have been. So, the American variety of "politically correct" is pale by comparison.

Tell me how wrong I am about American "in your face" TV reporting all superficiality -- ala Paris Hilton that makes "breaking headlines" that the world has just gotta see ...

[Lafayette]

jp: Has there been any market economy in any time of history for which this discrepancy wasn't prevalent? I doubt that.

I have to agree. The market mechanism reflects the consequence of consumer choice in terms of volumes and pricing.

The moral dilemma of consumer choice, however, is not reflected there. If people want Chinese gadgetry to (supposedly) enhance their lifestyle, then that is their business. It is difficult to argue that Chinese products have not brought more purchasing power to a broader range of people in the markets in which they are showing up.

But, do we "need" those gadgets? That is all together another question beyond the purview of economic theory, I suggest. Are people being "manipulated" by media advertising ... or simply "informed"? Are consumers responsible for their choices and consequences. Of course they are. But, are they being "adequately informed" -- and what does "adequate" mean -- in these times of sub-prime nonsense?

Once upon a time, we thought that "any" choice that enhanced demand -- and therefore employment -- was goodness. After all, it contributed to raising employment levels and therefore incomes and therefore spending. The virtuous circle was closed.

But, now that we see the virtuous circle operating elsewhere and developed-country consumers are just willing participants but not beneficiaries in terms of employment -- and somehow that's "all wrong".

Sorry, but that is not how markets work. What's good for the goose is good for the gander -- is how they work.

America and Western Europe have had their day in the low-cost manufacturing employment paradigm. It's time to move to a higher level and willingly abandon low- and unskilled production. Because, that is where the competition is going to be.

There is no competition whatsoever possible in the former paradigm.