Monthly Archives: July 2015

The Future of Work – III When Jobs End

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In the past, all the way back to the earliest beginnings of the Industrial Revolution around 1800, older job opportunities that were eliminated by mechanization reemerged as new opportunity in new production jobs created by the revolution. Without the support of company sponsored training or unemployment insurance, these transitions were hard times for the displaced workers. Still, at some point, a worker could find another job in a new production sector. The same has been true for every turn of automation since.

However, it is a common position among futurists that, moving forward through the 21st century, the number of jobs available will begin to dwindle. It may be that large numbers of citizens will not have the opportunity to find another job. As a rule of thumb right now, economists determine that every major shift in the economy creates a job loss of 15% that will not be recovered in the transition. At some point, automation will increase this loss incrementally – never to be recouped.

It is important to dissect “job” from “work.” A job is the result of hiring by an employer wherein the individual hired receives a salary or some form of recompense. Work is the act of investing personal time, energy, and other resources wherein the individual feels justified in one’s behavior and feels personally responsible for one’s contribution; the individual also derives a sense of self worth from doing the work. A job can fulfill an act of work but work has a broader definition that includes the wellbeing of the individual.
The introduction to an article in The Atlantic written by Derek Thompson expands on the difference between jobs and work and shows that although different, the two are permanently entwined:

“The end of work is still just a futuristic concept for most of the United States, but it is something like a moment in history for Youngstown, Ohio, one its residents can cite with precision: September 19, 1977.

For much of the 20th century, Youngstown’s steel mills delivered such great prosperity that the city was a model of the American dream, boasting a median income and a homeownership rate that were among the nation’s highest. But as manufacturing shifted abroad after World War II, Youngstown steel suffered, and on that gray September afternoon in 1977, Youngstown Sheet and Tube announced the shuttering of its Campbell Works mill. Within five years, the city lost 50,000 jobs and $1.3 billion in manufacturing wages. The effect was so severe that a term was coined to describe the fallout: regional depression.

Youngstown was transformed not only by an economic disruption but also by a psychological and cultural breakdown. Depression, spousal abuse, and suicide all became much more prevalent; the caseload of the area’s mental-health center tripled within a decade. The city built four prisons in the mid-1990s—a rare growth industry. One of the few downtown construction projects of that period was a museum dedicated to the defunct steel industry….”
“….the widespread disappearance of work would usher in a social transformation unlike any we’ve seen. If John Russo1 is right, then saving work is more important than saving any particular job. Industriousness has served as America’s unofficial religion since its founding. The sanctity and preeminence of work lie at the heart of the country’s politics, economics, and social interactions. What might happen if work goes away?”
1 John Russo, Professor of labor studies at Youngstown State University.

The conservative constraints on what constitutes work today, when even government work “is not real work,” is tied to the roots of capitalism and work ethic in American history. Roots bound in hundreds of years of culture suggest that a change in that culture will be resisted just as the transition from slavery to modern civil rights is resisted. It will take generations to restructure the opportunity to work and to establish an adequate financial subsidy. In the case of work, joblessness will require more immediate transition which may not change smoothly if hurried. For example, how hard has it been (and will it be) to redefine Hispanic immigration? There are great grandchildren of undocumented workers living in the US. Whole generations of Hispanics carry an anxiety within themselves: “When will I be found out?”

There will come a moment when a great layoff will occur for which job replacement is not available. In that moment, a new world of work will be born wherein citizens are paid a stipend so that each citizen may continue to work – whether a job definition exists is irrelevant. A society cannot operate except people are allowed expression through work, contribution, and personal gratification. A “job,” on the other hand, is a matter of definition, nothing else.

There is no doubt that the welfare mother who raises her children to be responsible adults is doing valuable work. In the future, this could be considered her job.

Ancient Mariner

On a July Saturday

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The mariner often emulates two champion naysayers from history: Old Testament prophet Amos and Children’s literary avatar, Chicken Little. True to their warnings of doom, the mariner has railed against political, cultural, economic and environmental trends.
But in the last three weeks, the mariner has felt tremblers. The tremblers have been subtle but they have been widespread. The rumbling has moved through FIFA women’s soccer, allowing a new sport and a women’s league to burst from the Earth in full bloom. Combined with the arrest of FIFA management for classic mob behavior, world soccer will never be the same.
The Earth shook when the Supreme Court ruled in favor of LGBT marriage, struck down a law that eliminated Women’s health centers in Texas, and upheld the Affordable Care Act. The theocratic right was wounded but didn’t die. Nevertheless, their leash was shortened significantly regarding attacks and pillaging of State laws and blackmailing elected politicians with their reelection if Tea Party legislation was not forthcoming.
President Obama updated the overtime regulations to make it more likely that workers will be paid for their extra hours. Minimum wage is on the increase in States ranging from $10/hour to $15/hr.
Bernie Sanders introduced American citizens to a forgotten word: socialism. Running ideologically as a democratic socialist, Bernie’s speaking events draw many more than any other candidate, including authoritarian candidate Trump.
Senator Lindsey Graham (R-SC), a rare combination of conservatism and sentimentality, challenged the Fox News version of candidate selection claiming it eroded the primary process put in place by both parties. The Fox News popularity contest has put Donald Trump at the top of the pile because of name recognition in national polls.
If the mariner may be Amos for a moment, beware the popularity of Trump. He stays at the front not only because he is unabashedly a showman, but because he speaks the specific words that many, many citizens have wanted to hear for a long time. He may seem a clown to 95% of the public but he is spot on with the other 5%. Lest you think 5% is insignificant, only 57% of eligible voters voted in the last presidential election. Given all the extremists will vote, that raises their influence to about 9% – enough to throw a close election – especially in primaries and State elections.
The mariner accompanied his wife to her 50th high school reunion. The turnout is better than expected. The restaurant is crowded and very, very noisy. Imagine riding in an automobile with one of those super loud sound systems. Everyone is deeply engrossed in conversations about who, where and when – at great length. It is difficult to move around in any case but a crowd of about eight people stands crunched together blocking the path into the room; further, they block access to the appetizer bar. Why is it, the mariner asks, that people will stand and talk in a space obviously needed for passage? The mariner calls this phenomenon the “doorway syndrome.” Doorway syndrome occurs in one’s home, after church at the exit, in grocery aisles, in driveways, and any other space where a group of people can camp and be as potent a blockage as Hoover Dam. The mariner has no couth so he loudly shouts for them to move out of the doorway and let people through. It’s okay; they don’t know who he is and even as he pushes through, they don’t move anyway. Frankly, they never stop talking.
Sunday, at 9:00A Eastern on ESPN, Djokovich will play Federer for the Wimbledon title in men’s tennis. It is a battle of Titans. This is as it should be British complaints notwithstanding.
The reader should be pleased that when the mariner began to look at work as an issue, the popular press followed suit. The latest The Atlantic has a major article by Derek Thompson, “World without Work” and a new book is out by Erik Brynjolfsson and Andrew McAfee, “The Second Machine Age.” The mariner will review these publications.
Today, the mariner’s town is awash with flooded streets and drains after 2+ inches of rain fell on an already soaked town. Tragically, the rain turned the midway at the County Fair into a creek with a firm current; the demolition derby scheduled for tonight is cancelled due to a flooded infield.
The setting Sun is out now as the day ends. Except for the Fair, it is a good day, tremblers and doorway blockers included.
Ancient Mariner

The Future of Work – II What is Work?

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Future of Work I identified an issue: The definition of work itself will change dramatically by 2050. At the end of the post, it was suggested that we cannot see clearly into the future because it will be so different from what we experience now. Future of Work II ponders who we are now that we cannot see a path to this unknown future.
For the sake of clarity and to limit the scope, this series will deal only with the culture and circumstances of the United States. Other cultures, nations and international politics will be annotated from time to time but the focus is on US circumstances.
Some US labor statistics that reflect the current culture of work:
Americans work an average 47 hours per week – cumulatively 4 more weeks per year than the average in 1979.
In addition, on average, Americans work two weeks longer.
The US is the only nation in the world that does not guarantee paid time off, sick leave and maternity leave.
The US is the only nation in the world that does not link employee income specifically to hours worked or productivity.
The US is the only nation in the world of first-tier nations that does not require cost of living adjustments to income as a national policy or as a culturally mandated reason to do so – collapsed and authoritarian economies excepted.
In spite of increasing demands at work, employees accept salaries that remain not much above 1985 rates. That’s a difference of 40% – nearly half again what workers would be making if their salaries kept up with the cost of living or with statistics on productivity. Further, labor unions have become a pejorative presence that “interferes” with an employee’s opportunity to work; minimum wage is significantly under the poverty line; Federal and State governments continually undercut agencies who oversee the health and working conditions of the American employee; no effort has been made to repair the misuse of retirement funds by corporations – made possible by legislation during the Reagan administration. In short, American workers are so addicted to work that it supersedes any other measure of personal worth or any sense of self value. In the mariner’s resident State, there is a firm prejudice against anyone who isn’t working hard.
It is common knowledge that Americans clearly are the hardest working culture in the world. Only the United States, with its supercharged employees, has a chance of competing with a Chinese economic engine that has the potential to produce 100 times the producing capacity of the US. It may be that the reason we cannot see into the future is that work, as it is experienced today, will not exist. Under control of maleficent employers, and with workaholics, hypertension, widespread job dissatisfaction and workers having a belief that work represents sanctification through sacrifice, the American work ethic as it is today cannot survive the journey to a different world of work.
Psychologists, sociologists and, increasingly, private sector theorists and planners feel that it is a good thing to disrupt the American dedication to work or at least to change the work environment. There is a big world out there that actually is more important to the human psyche than “work” – though many will disagree. For example, workaholics have a different family life profile than “normal” workers. The divorce rate is higher; they do not participate in non-work activity that “restores the soul;” their emotional flexibility declines and empathy, sympathy, and human insight wither from disuse. Yet, in the American culture, they seem happy with what they are doing and who they are inside. Americans admire these dedicated, high performance producers. Personality tendencies aside, are workaholics happy in the wholesome sense? The mariner offers the opinion that excessive commitment to anything is compensation for past experiences, disparate family mores and obsessive-compulsive characteristics.
On the other hand, perhaps it’s the definition of the word “work.” There are two thoughts:
1. In society today, work is part of a triumvirate – time/labor, income, and contribution to the Gross Domestic Product. Working is making something that is wanted by the economy in some way, earning income for the worker and spending personal time and effort to contribute to the success of the work ethic.
2. Work may not be bound by continuous time, income, or economic output. Perhaps work can contribute to society, or to the biosphere, or to any tangential activity compared to today’s perception of the “workplace.” This idea crosses several ideologies. Capitalists consider anything not contributing directly to cash flow and product to be irrelevant – hence, government jobs aren’t real jobs; Socialists consider a workplace to include the home, community activity, and consider a workplace to be mutually owned in principle with the employer – hence profit is a multifaceted product; the American worker considers a workplace a place that provides income and requires investment of personal labor.
Look at a few test cases:
A person gives 5 or 6 hours every other day working at the local car parts store. The rest of the person’s optional time is spent riding a horse along several miles of trail in a forest. The trail is cleared of branches and debris. Hikers benefit from the person’s efforts but certainly not comparable to the scope of time and effort provided voluntarily by the person. Is the person working when maintaining the trail?
A mother is on welfare. She has four children under the age of 12. She spends 8 hours each day caring for the children in some way – before school, after school, homework, meals, chaperons them to and from after school activities. The mother receives welfare income and a few dollars babysitting a working neighbor’s two small children; she contributes time and labor. Is this woman working? Does she work for her community by properly raising her children to be good citizens in that community? Would the economy based workforce be better served if she left her children to work 10 hours a day at Burger King? Don’t worry about the reader’s answers defining him/her. The case is speculative.
A man works two jobs fulltime. He is a bookkeeper and brings work home on weekends to keep abreast of his responsibilities. He makes $125K total annual income. His two children are 12 and 16. His wife works at a local restaurant. She makes $31K total annual income. In one year, the older child, a boy, is arrested for accidental homicide and is sentenced to 10 years in prison. Arrest and pretrial confinement costs the police department $165K. Prosecution and court expenses total $140K. Prison costs $55K/year for each inmate. The daughter has run away twice requiring the police department to look for her a total of three days at $4,000/hour, 8 hours/day times 4 policemen. All administrative costs and benefits included, the searches cost the city $384K. Is the man working if his societal overhead is $744K while he and his wife earn $156K?
The mariner hopes these cases cause speculation and induce personal thought about what else is part of the “triumvirate.” Is work more integrated into society outside the workplace than one sees on the surface? Does the work ethic include another dimension of responsibility to family, neighborhood, friends and most importantly, to self?
Ancient Mariner

The Future of Work – I

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The mariner has pondered for decades how human culture would operate in the age of the Jetsons (animated TV show from 1962-1990 sporadically). Everything in the future was automated; automatons were everywhere and performed virtually every job requiring hands and decision-making. What did George Jetson do at work? What was his actual job? What was his product? A humorous cartoon show about the future is not the place to wax culturally about the ramifications of such intense automation.
In the early years of the nineteenth century, it was the Luddites who protested against newly developed, labor-economizing technologies. The Luddites were textile workers that were put out of work by improved methods for making frames and looms. These jobs were lower income jobs and labor-intensive in nature. The Luddites were simply left on a limb without options or income.
At the turn of the twentieth century, it was carriage makers, harness makers, blacksmiths and farriers among many other skilled laborers who were dropped from the work force as the automobile suddenly replaced the horse as the common form of transportation.
Throughout the later years of the century, especially from 1970 to the present, millions of jobs disappeared in the US due to automation and trade policies that sent many surviving labor jobs to less expensive labor markets in less developed nations.
In the twenty-first century, disappearing jobs is a chronic issue that is rising to the surface of the workforce. Automated services already are affecting very large sectors of employment. Consider the following:
• Within fifteen years, fast food restaurants will no longer require counter workers or preparation workers. Perhaps the manager and a helper will be all the humans required to serve the public. Anyone who has visited a fast food restaurant recently can see the transformation to automated service occurring systematically. In the United States alone, 4.4 million workers depend on these jobs.
• Even now, retail sales are undergoing massive conversion to automated service. Simply ordering online instead of shopping at a store is decimating “brick and mortar” outlets, forcing many large and familiar retail chains to go out of business or close significant numbers of stores. The floor sales person is coming to an end as more and more products can be bought or ordered via machines. Many retail sectors will have growth in sales but the number of employees will diminish drastically. Today, retail sales support 42 million jobs.
• Within two decades, the transportation industry will drop millions of transportation jobs because of automated buses, trucks, trains and automobiles. A 2013 study by Oxford University predicts that automation will replace half the jobs in the US by 2040.
Being employed is not the only issue. Since 2000, the average wage of college graduates has dropped over 7%. US wages in general have stalled since 1985 for economic reasons but now face further cuts without relief. In every case the mariner could find, trade agreements have reduced job opportunities in the US. President Obama claims the TPP will return manufacturing jobs to the US but every indicator of future employment suggests that the wages will be low and the opportunities, even as they occur, will be lost to automation.
Setting jobs and income aside for the moment, there are two cultural issues. The first is if vast numbers of men and women cannot find work, what do they do all day? Especially in America, where having a job has become a permanent part of the American psyche, how does one feel successful? What is a person’s worth if they cannot produce income or physical participation in society?
The second cultural issue is class stratification. There will be sectors where jobs escape automation, will likely have better salaries, will be more influential in the evolution of politics, culture, and are able to participate in the benefits that come from financial security. What we consider lower level jobs today will be the common job of everyone whose job has disappeared. Quite likely, a worker will work part-time.
The automation of work is similar to the effect of a tsunami as it comes to land: It comes quickly and silently until it is too late; it literally erases the cultural fabric that binds every citizen to another; it makes present ideas about economy useless.
Yet, it is almost impossible to guess what the future looks like. The future is so different that we cannot envision it. It sits on the other side of a solid wall that blocks our view and our imagination. Like the tsunami, it is approaching us even now – but we have no way to protect ourselves.
What shall we do?
Ancient Mariner

Lindsey Graham – Political Philosopher Extraordinaire

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Liatris 002In the mariner’s garden, one can always tell when it’s the fourth of July. The sparkler-like Liatris stalk lights its flame within a day or two of the holiday. As any gardener will attest, gardens require labor intensive commitment. The small moments of reward stay for awhile. The delicate purples and blues of Liatris, Scheherazade Japanese Lilies, Alium, Blue Phlox, and the tall Dianthus grow among robust Black-Eyed Susans, naturalized Stella De Oro lilies and large, bright yellow Marigolds. The colors are brightened even more by scatterings of white Phlox, Impatiens, and Verbena. It is a special time in the garden and one must pause for the reward.

Back to the world outside the garden, the mariner is in a wait state. The Supreme Court recently provided a flurry of activity with its decisions on homosexual marriage, the Affordable care Act, and Arizona’s redistricting process. Now we wait while a new set of events unfold: the nuclear program of Iran, the resurgence of activity in Ukraine, the unveiling of TPP, Greece’s economy versus the EU, and the oddly under-covered wars in Iraq, Syria and Nigeria.

Then there is the US campaign by Presidential hopefuls. In all the mariner’s years, there has not been a more entertaining national campaign. There are representatives from every form of democratic philosophy. Guess the appropriate name(s) for the following: libertarianism; democratic theocracy; capitalism; pragmatic democracy; liberalism; democratic socialism; and egocentric authoritarianism.

In spite of himself, Senator Lindsey Graham has revealed a significant change in the importance of primaries for the republicans. Graham says that the control of the debate process should never have been given to Fox News. The measure of who will attend the debates is dependent on national polls, not state by state primaries. The Senator is right when he says the debate selection criteria diminish the importance of Iowa, New Hampshire and South Carolina, as well as later primaries if Fox oversees subsequent debates. “Who wants to go to Iowa if the important decision is based on national recognition?” the Senator said.

The mariner tends to agree with Lindsey. Graham reached into a bush to retrieve a bone of contention and grabbed a philosophical rhinoceros. The flaw in the US primary system is that no one state represents the political demographic of the entire nation yet the states vote in sequence by calendar date rather than by a meaningful demographic approach. In its current sequence, the early, more conservative states have undue influence in media, fund raising, and the ratio of conservative to liberal ideas that drive the campaign.

A lot of the smoke has cleared by the time a demographically representative state like Florida has its primary; it is even less meaningful for California.

For many reasons, this rhinoceros will not go away. The democrats, too, are part of how we stack primaries among liberal and conservative states. Certainly, the mistake of turning control of the process over to an unbiased media outlet won’t happen again…

Lindsey didn’t intend to open the whole manner by which states participate in a national campaign. He was just trying to keep South Carolina as a key decision maker once Iowa and New Hampshire had their primaries. His other motivation is not to allow Brad Pitt to be President. The mariner should have counted from the beginning the number of times the Senator mentioned his name.

Ancient Mariner

 

Ta-Nehisi Coates

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The mariner is not a native Iowan. He is from Baltimore, Maryland and the surrounding area. He spent all but two of his teen years living in a small lower class community tucked in between a glass factory and a garbage dump. Two of his friends went to prison for long sentences; one friend supported two children and a useless mother by working as a prostitute; one friend from a contiguous working class neighborhood is a bright linguist that became a lifelong friend; many friends were using heroin before it had a media presence; gang fights between African Americans and Caucasians were common.
Later, in his thirties, the mariner became a parole officer. He had a special caseload of thirty-five transvestites. All but three were African American. They qualified for the case load because they were transvestites and drug dependent and had active arrest records. All had arrest records for prostitution and misdemeanors that reflected tough neighborhoods and interpersonal conflicts related to their sexual difficulties.
A couple of years later, the mariner was appointed to the Baltimore County Commission on Drug Abuse. A new commission, its goal was to establish drug rehabilitation legislation and treatment programs for the County.
It is with this background that the mariner eventually moved to Iowa. He became aware that Iowans and many Plains State citizens have no way to reference the reality of lower class, African American, inner-city people (and whites…and Hispanics…and Vietnamese and…). Iowans are good-hearted folks. Many are disciplined workers whose great grandparents emigrated from Germany and surrounding middle-European countries. In the earliest years of American independence, before the Louisiana Purchase, French immigrants moved in from Canada to live among the Native Americans.

There are African Americans in Iowa today but they do not constitute a visual presence in the all-white culture. Racism in Iowa is not an issue that rises to political awareness or neighborhood/town segregation. Racism is present in Iowa but not predominately and not because of direct interaction. To the extent that it exists, racism in Iowa truly is an adopted prejudice.
Iowa ranks at the top of states with a singular economic culture; it is farming. Even manufacturing in Iowa does not roam far from farming. A subgroup of farming production in Iowa still uses immigrant workers on its farms. This is not the African American inner-city experience. Without question, immigrants on farms could write their own discordant history but it is different.
The mariner offers a resource for Iowans to gain an insight into the African American experience. He offers an African American author who grew up in that environment. The author is an excellent writer who writes and speaks of the African American experience with poetic understanding, intellectual observation and is able to project the living experience of his youth. This writer does not have the typical edge to his writing that pundits and advocates would have. He provides information intended to enlighten readers to the African American experience. That is his only motive.

As one example, his observation of the recent spate of shootings and abuse by police departments says that the fault is not with the police departments, who are taking the brunt of public reaction but rather the citizens of the communities. He says the police department the community wants is the police department it gets. Whether obtained through racial bias – or by indifference from not voting – the police department works for elected officials.
The mariner recommends you read deeply in his bibliography and follow his blog on The Atlantic magazine website where there are several videos as well.
TA-NEHISI COATES
Writer
“Ta-Nehisi Coates is an American writer, journalist, and educator. Coates is a senior editor for The Atlantic, and blogger for that publication’s website where he writes about cultural, social and political issues. Coates has worked for The Village Voice, Washington City Paper, and Time. He has contributed to The New York Times Magazine, The Washington Post, The Washington Monthly, O, and other publications. In 2008 he published a memoir, The Beautiful Struggle: A Father, Two Sons, and an Unlikely Road to Manhood. He joined the City University of New York as its journalist-in-residence in the fall of 2014.” (from The Atlantic website)
www.theatlantic.com/author/ta-nehisi-coates  
Ancient Mariner

Cuba – Center Stage for a Match Between Capitalism and Socialism

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The mariner is intrigued by the likely integration, or perhaps conflagration, of capitalism and socialism in Cuba. In pure philosophical form, the two economic cultures are totally opposite to one another. In the broadest terms, capitalists believe in free enterprise, unbridled entrepreneurship, and fast-profit markets. Socialists believe in cooperative enterprises where the economic engine primarily provides profits for the good of the citizens.

Essentially, capitalists desire to keep the government out of its affairs unless government legislation is helpful in increasing profit. For example, Monsanto lobbied Congress successfully to pass legislation making Monsanto unaccountable for any form of liability; in other words, Monsanto cannot be sued for damages. This legislation slipped through as part of another bill. Monsanto pressed for this bit of favoritism to counter a significant number of citizens who believe gene-modified products are bad for them. If one is an American, one must not be angry with Monsanto. It is the way of capitalism to make every conceivable effort to improve and protect profit. Virtually every sector of private business garners special advantages of one kind or another. Many advantages are simply prevention of regulations and oversight which may be to the betterment of society but reduce profit margin. The reader knows the popular aphorism: “What are the three most important things to a corporation? Profit, Profit, and Profit!”

To one degree or another, socialists desire a classless society where the government assures that everyone is treated the same and in a fair manner. Socialists believe the government is responsible for shaping economic prospects for the nation; usually this means that key enterprises are owned by the government to assure continued prosperity for the citizens. For example, the reader may remember when Hugo Chaves, President of Venezuela, nationalized all foreign oil companies and other parts of the fossil fuel industry. He did this in an effort to keep more profit in Venezuela for use by the government. It also took Venezuela from a minority ownership with foreign owners to a 60% majority ownership. Unlike capitalism, which virtually forbids government ownership of profit-making companies, socialism builds a national business model across three sectors: state-owned, cooperatives, and self-employed.

Hugo Pons Duarte, director of Cuba’s National Economist and Accountant Association, says, “The policy is not to open up the country to just anybody who wants to come, the government has a strategy for guiding investment.”

To have a cultural view of the differences between capitalism and socialism, consider the following examples:

Capitalism – Airlines. Using buy-outs, bankruptcy and mergers, US airline corporations have reduced the number of airlines by more than half. Today there are only four large airlines left. In the process of merger, labor unions are shut out or, at best, are forced to take reduced salaries and benefits. Regularly, fees for every conceivable service increase. Remembering that power corrupts, four airlines make collusion much easier than 12 or 13 airlines. That many airlines will increase competition whereas only 4 can mimic one another easily, coordinate hub flights to assure every flight is full, and, in order to keep profits high, slip down the slippery slope to collusion.

In a capitalist culture, a portion of airline profits goes to individuals who own a share(s) of the corporation’s worth and receive dividends based on profit. This is perceived as a “sharing” of economic wealth. However, in the US today media tells us that 1% of the wealthiest citizens own 37% of all stock on American stock exchanges. In capitalism, money makes more money. “No money? Tough luck. You need to pull yourself up by your bootstraps.” In a purely capitalist economy, there would be no public schools, no state owned or maintained roads and highways, public works, welfare, unemployment insurance, workers compensation, Social Security benefits etc.

Technically, the government structure of the US is a constitutional democratic republic, that is, the ultimate authority over government is vested in the citizens who exercise their authority by voting. Certain rights, ideals and civic protection are within the constitution. It is the constitution that prevents the US from being a pure capitalist government.

The private sector strongly objects every time the government imposes on profit to support the lower classes that will never have sufficient income to sustain healthy lifestyles or afford to have financial security. This disparity has become so extreme in the US that the middle class, the vital component and profit maker in consumer-based capitalism, is badly damaged.

Capitalism depends on its class system to foster desire, commitment, creativity, efficiency, competition and profit. CEOs of the largest U.S. companies made 354 times what the average worker was paid in 2012 — the widest pay gap in the world — according to a new analysis by the AFL-CIO. At S&P 500 companies, CEOs received an average income of $12.3 million, while ordinary rank-and-file workers took home around $34,645 – clearly an example of enforcing a class system. See more information at: http://www.shrm.org/hrdisciplines/compensation/articles/pages/ceo-to-worker-disparity.aspx#sthash.WhZJXNTi.dpuf 

Socialism – Almost too simplified, there are two types of socialism: communist and democratic. Communist socialism is run by a political party (Russia and China are the two largest examples); there may be some limited voting by the proletariat but any undesired outcomes are dealt with by the Communist Party changing rules of order and shifting authority. Further, the ruling class has a tendency toward totalitarianism or authoritarianism.

Most generally, socialism refers to state ownership of common property, or state ownership of the means of production. A purely socialist state would be one in which the state owns and operates the means of production. The private sector would be very small and would not determine market objectives. However, nearly all modern capitalist countries (“the West”) combine socialism and capitalism. Interestingly, the word “socialism” is a bad and scary word in the United States – much more than in any other full-function nation. Partly it is a bad word because the US by far is the most capitalistic nation in the world. Other than the dominance of capitalism, there is more to the plight of socialist representation in politics and why it is ostracized – but that’s for another post.

Ancient mariner