Lessons From Runaway Capitalism: Lesson 1: Let Us Not Be Smug

“Humanity faces a potentially terminal crisis of collapsing environmental systems, extreme and growing inequality, failing institutional legitimacy, and disintegration of the basic trust of one another on which the social fabric depends. No individual caused these vast problems, and no individual or group of individuals can solve them alone.” David Korton, Yes Magazine, 21 Jan 2021 https://www.yesmagazine.org/opinion/2021/01/21/biden-presidency-build-back-better/? 

The events in Washington DC on January 6 were a logical outgrowth of a series of events and trends that have unfolded over a number of decades.  The attack on the Capital was not the opening round of an attack on democracy but the logical product of a significant long term erosion of democracy. The Trump presidency did not spring out of nowhere.  It was made possible, perhaps even inevitable, by the corrosive effects of runaway economic inequality, the natural product of capitalism. 

Understanding what took place in the US is important for Canadians.  The same forces that produced the Trump victory in 2016 are present in our Canada, and have been here for some time. 

Democracy in both our countries is being eroded, not by a conspiracy of some small group, but by an economic system focused on the wants and needs of capital that is fundamentally at odds with democracy.  The 5% who control that economy do not need to conspire – their key interests are simply the same and their power to influence enormous.

The dictatorship of Inequality

The foundation of the capital centered economy is one dollar-one vote in a world where 50% of the wealth is owned by 1% of the people, and the wealthiest 10% own 85%.  The bottom 50% of the world’s people own 9.4%.  In a capital centered economy 10% of the people have 85% of the votes. However, democracy is based on one person one vote.  Democracy and capitalism are at war and capitalism is winning. 

The 651 billionaires in the US and the 46 in Canada have significantly increased their wealth since 2010 and made spectacular gains during the pandemic.  The $185 billion owned by Canada’s billionaires and the $4.1 trillion owned by US billionaires gives them enormous economic, political and social power.  The companies they control give them far more power.

Just during the pandemic, Canadian billionaire’s wealth grew $53 billion while millions of Canadians lost their jobs, ran short of food, rent and suffered higher death rates.  In the United States, reeling from a runaway pandemic, “The total net worth of the nation’s 651 billionaires rose from $2.95 trillion on March 18—the rough start of the pandemic shutdowns—to $4.01 trillion on Dec. 7, a leap of 36%”.  (Based on an analysis of Forbes magazine’s research on billionaires.  https://inequality.org/great-divide/updates-billionaire-pandemic/ )

The global economy, while producing many new shiny toys for the more affluent of us to play with, is also eroding the environment and social cohesion.  The economy passes on the cost of massive environmental damage to 90% of people, especially the poorest 50%, and everyone’s children and grandchildren, while the profits of that damage go primarily to a very small percent every day.  The 1% live away from the environmental destruction and pollution they profit from while the 50% live in it.  Inequality is growing ever faster.  Future inequality will explode, engulfing future generations.

The bottom 70% have watched their dreams and their hopes for their children shrink.  Those under thirty see a future that, unless there is profound change, will offer them unstable gig work, runaway climate change, wild fires, floods, droughts, killer heat waves, shrinking supplies of clean water, crop failures.  They may well face the spectacle of a mass extinction of life forms and an economy and society in tatters. 

The 5%, with vast wealth to spend on lobbyists, political donations, ‘think tanks’, advertising and managerial and legal talent steer and corrupt governments with a mixture of cajoling and threats.  If government does not do what they want they will pull their capital out and throw hundreds of thousands out of work.  They want government to shrink and enter into trade deals that serve the interests of the 5%. They demand lower personal and corporate taxes that deeply shrink government services and replace government support for education and healthcare for example with the miserly gifts of charitable philanthropy.  Their gifts seem very large viewed by those with the annual incomes of the bottom 50%.  But those gifts, in the absence of adequate government funding, give the 5% more and more control over the content of education and over the science and healthcare experts who have become dependent on them.  The access to and decisions about education, healthcare and research go from being a public decision based on the needs of the society to a private decision based on the whims and wants of the richest 10%.

That enormous pool of wealth also funds racist organizations, anti-immigrant groups, bigotry promotion, climate denial, and anti-environmentalism.  The 5% also advertise in and fund media with contempt for truth and those stoking hatred (for example Fox media and Epoch Times) and far right wing economic theorists.  It is vital to the interests of the 1% that the 99% are as divided and as confused as possible.  Exon’s 30 years of lies about climate change were not an isolated incident but one of thousands of possible examples.

The decades of growing dysfunction of our capital dominated economy, political life and society has produced a justified growing distrust of democracy.  This was the powerful gift given to Donald Trump by decades of blind and sometimes corrupt leadership. 

He promised the 50% he would “drain the swamp”.  In spite of being clearly the worst part of the swamp, he persuaded them he was not even remotely near the swamp but instead the heroic crusader who would make America great again.  He blamed all problems on immigrants, Muslims and people of colour, stoking racist fears and religious divisions.  He told more than 30,000 documented lies and demonized the media when they documented his lies.  He slandered anyone who criticized him and he held the truth, evidence and facts in contempt.  He funneled vast amounts of wealth to the wealthiest while proclaiming his devotion to a large and increasingly angry population. 

The biggest error we can make is to blame his followers.  Yes, they believed the unbelievable, but decades of betrayal and lies have taught them not to trust politicians or democracy.  Inequality is not limited to incomes but also to access to government and to the courts.  When people in the bottom 70% cheat to avoid some small amount of taxes, they get nailed.  When the super-rich and their corporations dodge huge taxes or use tax havens, they are ignored, get their wrists slapped lightly or go to court or get the taxes reduced or tax laws changed.  Many tens of billions are tucked away without fuss in legal or illegal tax havens, but heaven help a Canadian CERB recipient who cheated a bit or made a legitimate error.

Democratic and Republican governments in the US and Liberal and Conservative governments in Canada have, at best, payed lip service to the problems of the bottom 70%, and at worst have simply sold them out while downplaying the reality of either environmental catastrophe or runaway inequality.  The claim that we have to choose between the economy and the environment is a smoke screen.  The real choice is between a serious plan to transform the economy over several decades into a green economic democracy, or fuel a path to environmental, economic and social disaster. 

We plowed the ground for Trump.  We made it easy for inept far right leaders like Kenny and Ford to dupe people.  Where will we be in four years?

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