In reading a review of a recent book by Jacob Hacker and Paul Pierson on the subject of why the rich are getting richer, I note some interesting statistics. “In the past 40 years the average income of the top 5% of wage earners went up, while on the average everyone else’s income went down.” In other words there’s been a shift of wealth from those who do the work to those who are at the top end of the economic scale. To clarify the picture, the share of total income going to the top 1% of Americans has increased from 8% in 1960 to more than 20% today. Our economic system has caused a tremendous concentration of wealth in the hands of fewer and fewer people to the detriment of the majority of people in America.
I am a capitalist. I believe in the capitalist system, that it works best to benefit a majority of the people. However, what I see happening given the statistics presented, is that our system of free markets is slowly eroding to the place where it will eventually be destroyed. It has come to my attention that our markets are no longer free. Some members of society have access to insider information while most of us who have small investments do not have that benefit. When the financially elite are free to raid the market, it is no longer a free market which is essential to a healthy capitalist based economy.
When one business entity is able to restrict others from entering the market, capitalism is weakened. For example, when Microsoft requires purchasers of its products to pledge not to use their competitors’ products, we no longer have a free market or true capitalism. When managers of investment banks make risky bets with other people’s money and get multimillion dollar bonuses even if their business fails, we no longer have a true capitalist system. In response the government tries to regulate and protect the ordinary investors from being victims of fraudulent behavior on the part of the bankers. The business community squeals in agony at such regulation.
Without question too much government regulation weakens our capitalist system. However, if government regulation seems oppressive just wait till you are caught in the clutches of corporate policy. There is no due process or free elections to throw the bums out when you’re dealing with an American corporation.
From my perspective, our capitalist system, which includes free and open markets, is the most beneficial to most of the people and is the reason why America is the most productive nation in the world. That is soon to disappear if left in the hands of corporate moguls who are bent on enriching themselves regardless of the effect on the rest of the nation. The one most important goal for our government in the new year is to find a method of protecting capitalism from the destructive behaviors of corporate America. If that can be achieved much of the rest of the nation’s needs will fall into place.