Developing the New "Capitalists' Man"
In the wake of revolutions in Russia, China, Cuba, and elsewhere, there was talk of creating a new type of person with a socialist mindset. The idea was that people in the prerevolutionary capitalist societies had been educated to be individualistic and greedy. The post-revolutionary societies would instead educate people to be socially minded and to consider the collective good in their actions.
I'll leave it to others to debate the merits of these efforts. The reason that they are suddenly relevant is that our political leaders now seem concerned that people have not been adequately educated for their vision of a capitalist society.
This came to light recently when Treasury Secretary Henry Paulson insisted that people who are underwater in their mortgages still had an obligation to pay off their loans. Mr. Paulson is concerned that, because of the collapse of the housing bubble, many people now find themselves owing more than the value of their house and are simply walking away from their debts.
For example, in some of the rapidly deflating bubble markets, many homeowners are in situations where they owe $400,000 or $500,000 on a home that today is worth $100,000 less than the amount of their mortgage. In this situation, homeowners can effectively save $100,000 if they stop paying the mortgage and let the bank foreclose on the house.
Tens of thousands of homeowners are opting do exactly this. They calculate that it makes more sense for them to let the bank take the house than to repay the mortgage. Businesses have even opened that show people exactly how to "walk away" from their mortgage and explain the potential consequences.
As a committed capitalist, we might expect Mr. Paulson to applaud people taking initiative and acting to improve their plight. Instead, he is insisting that these homeowners should ignore their self-interest and act in the interest of the banks. In other words, he wants homeowners to keep making payments on their mortgages even if it is a bad deal for them. Apparently, individualistic behavior can go too far when it affects bank profits.
Mr. Paulson isn't the only capitalist who wants people to put aside self-interest. The entertainment industry is also struggling with the fact that people acting in their self-interest are unlikely to pay copyright protected prices for music, movies and video games when they can get the material for free over the web. To try to discourage people from acting in their self-interest, the Recording Industry Association of America (the trade association for the music industry) has developed curriculum for grade school, high school and university level courses that are supposed to instill in children the proper respect for copyright. Instead of debating the most efficient mechanism for financing creative work in the Internet Age, we are getting propaganda courses on copyright protection.
Of course, no industry has a more urgent need for people to act selflessly in support of their profits than the pharmaceutical industry. Their profits depend on being able to sell drugs at prices that can be hundreds or even thousands of times the actual production cost.
With few exceptions, drugs are cheap to produce, but the industry can charge very high prices because it has a government-granted patent monopoly. The absolute highest prices are associated with drugs for diseases like cancer that can literally mean life or death for patients. The cost for a year's prescription of these drugs can run into the hundreds of thousands of dollars.
If people act in their own self-interest, they will seek out unauthorized copies of high-priced drugs, either from foreign countries or from gray market producers in the United States who will step in the fill the need. (There are more efficient ways to pay for pharmaceutical research than the patent system.) Unless the government becomes ever more repressive in enforcing patent protection, the pharmaceutical companies will not be able to sustain its current business model, since people will not pay tens of thousands of dollars for drugs that cost a few dollars to produce.
But the problems of the pharmaceutical industry, the entertainment industry and the mortgage industry can all be solved if we can just perfect the new capitalists' man -- a person who willingly subordinates his own needs to the greater need for corporate profit. There is an obvious name for this new man: "sucker."
Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer ( www.conservativenannystate.org). He also has a blog, "Beat the Press," where he discusses the media's coverage of economic issues. You can find it at the American Prospect's web site.
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25 Comments so far
Show AllMcCain knows nothing more about the health care than the so-called leader he seeks to be. he and Clinton are simply an extension of the Bush policy of the last seven years and a hope to continue those same policies. They include the "politics of fear" as Obama speaks of and so many other means used to lie to the American people as in the gas tax scam.
The race and gender issues is simply part of a greater issue of fairness in all human issues and an end to exploitation of the masses at any level including the exploitation of women, minorities and children. The new stle young capitalist is simply the extension of greed and all other low level thought.
The Fox network and these two politicians along with the power brokers of the Rupert Murdoch style of revisionism in America and the world move gullible humanity back toward the 1952 Australian style of thought recently abrogated by the Australians with the defeat of their leader, in foreign affairs and economics that if continued will bring the world to extinction.
Clinton once again shows her irresponsible thinking at any price to gain the American nomination to continue to lead the world to oblivion. I read with interest the comments of Americans. I consider myself a humanist and not one that has the USA tattooed to my backside although I gave three years to the military and so have a right to speak.
Nationalism, is always based in me-firstism, let the rest of the world be damned mentality. Clinton is the new spokesperson for that idea and has now teamed up with the Fox network and the rabid so-called journalists who have helped diminish the America I once knew and fought to maintain. The way the rest of the world looks at the USA is colored by people like these at the highest levels of power.
The economic system that determines all peoples survival regardless of where they exist, also determines what a country will become, much of it the result of chance. In that regard the USA has been lucky, with well-worn imperialist ideas brought over with the Pilgrims. America has taken this country from the people who were here, the European model, without paying them. Some of us here know the story. The so called, "free market market system", formerly American capitalism, and now globalization into which it has now morphed. the US with its European allies has created the current means of controlling everything for the few. The G 8 has developed ever-greater means to develop these ideas and to take what it wants from the rest of the world and its own population.
The African Americans, the Africans, the Hispanics, Asians and Indians have been the slave classes that have built the white European and American wealth. The historic exploitation of the working classes of America brought from the world into its "melting pot" with the so-called freedoms and democratic ideals built from the blood spilled to form, compared to the European monarchies and divine kingship, so called Democracy unique in the world. The freedoms bought so dearly, were the first "Divine Kingship" of the "Robber Baron" and now, corporate power elitism.
To keep the masses quiet and to build the lives of Americans, consumer ideology supplanted education, the study human purpose, as a goal in itself. The economic forces, which have built their power, care little for human development and survival. They care largely for their continued power as an end in itself and for the few who have the most based on its protection with a huge military force, hence the oil wars in Iraq, this to support an auto centered disposable consumer society.
The expense of privilege in the community of nations may become the death of the globe and its entire people as a result of the American and European economic system, now out of control. Many American economists, Jeffrey Sachs, Joe Stiglitz, and others view these historical developments as a threat to global harmony and survival.
American wealth once had an altruistic quality about it. The post-World War II USA, developed the Marshal Plan and cared about the condition of the world. Now the top one percent, those who have taken so much, continue to be supported by the thirty percent of Americans who still believe George Bush, and his myth of global superiority at the expense of the rest of the world. It is clare that to many of Clinton's opinions continue the Bush doctrine, of unilateralism.
We sit on the edge of an environmental and economic disaster. This American system is out of control and the economic meltdown will continue regardless of who occupies the Oval office. The only difference is that Obama is intelligent enough to know that there are fundamental change needed in the way America and the so-called "free world" do business.
Rev Wright, simply addresses continued black slavery in a world of exploitation of all people led by the US and now the power elite in collusion with the government to continue the "American Dream" mentality, represented now by corporate multilateralism and their wealth and power. Corporate elitism cares for itself alone at the expense of all people, the environment, the human experiment, its freedoms, and so called democratic ideals which has become nothing more than an oligarchy.
We should not be too pejorative about Rev Wright who simply rails against the exploitive aspects of the Western mentality and points out the deficiency in the USA of evolved thinking toward the slave classes and the human species. He, having been able to experience directly because of his skin color these abuses is perhaps too angry which limits his effectiveness. His experience in seeing the wreckage of black America and his intelligence, has caused him to take up the defense of the disenfranchised.
America has a history of caring about others, once a genuine American direction, led by people, despite their failings like: The Kennedy's, Martin Luther King, Malcolm X and so many others who died for their belief in a better America and a better world, caring about humanity.
The media who carries their continued assault against those, who would in any way, attempt to include different thinking to bear on the so called "American Dream" which has become the world's nightmare must be seen by the masses for what it has become. The media must begin to understand its roll as an objective commentator to the necessary changes that must be made to the USA and the world if humanity is to survive.
The media above all must be changed once again to give democratic exposure to all important ideas. It must present an understanding of the complex thought needed to be brought to bear on global complex issues of survival. A departure from the simplistic superficial treatment ad-nauseam we witness each day which passes for news presented by the Barby-Doll class of newsreader called journalist.
ezeflyer,
You may be aware that the English invented intellectual property law to try to maintain a technological and economic edge on their competitors. Copying had been the modus operandi of every productive person or enterprise on earth, and the English invented justifications to try to prevent it to preserve their advantages.
When I entered law school, I was planning on specializing in intellectual property law, but the more I learned about it, the more revolting I found it, and I moved on to other areas. As you say, IP law protects those with the best lawyers, not those with the most creativity.
I just love the incredible imbalance of a society that takes capitalism to its logical, self-absorbed limit. Capitalism works ONLY in its purest forms WHEN people basically screw each other over.
Strangely, they decried communism for not holding true to its core values -- it ventured into socialism.
Scandinavia still looks like the only societal region that holds together... and it's mostly socialist.
But if America wants to go the full hog of Capitalism, go to it, and let the wreckage fall where it may. Then maybe we can work out a system that actually DOES work.
CRUX PUPPY: Brilliant analysis. I had been seeing for some time the same thing, but my imagination defined it as the global corporations morphing into the equivalent of the old pharaohs, with the rest of the world's laborers its new slaves.
B-PAYNE: Wise words, your cynicism is hard earned.
frank1569 - "If people act in their own self-interest…"
"'We wouldn't have an obesity epidemic… or 40,000 killed on the roads every year… or up to 500,000 tobacco-related deaths/year… etc.'"
We have all these things because people didn't know the difference between "self-interest" and "self-indulgence."
PAULSON SHOULD BE GLAD THEY'RE JUST WALKING AWAY AND NOT BURNING THE HOUSES DOWN
Aren't private contractors who set up burn pits in Iraq to destroy millions of dollars of perfectly good material setting the example for walkaways from a house mortgage?
After all, if the "capitalists" in Iraq can set on fire $85,000 trucks because of a flat tire or bad battery, why shouldn't homeowners behind on payments burn down their houses to get the insurance, and that gets the mortgage holder off the hook as well. And just think of the savings for not cutting the grass.
What about all those middlemen, the ones in the housing market between the homeowner and the last sucker who was sold a pile of mystery debt riding on ballooned house prices. They walked away with their fat, overpriced or fraudulent fees and commissions didn't they?
So the "free market" gives the parasite class a free pass on walkaway status, who win whether the market goes up or down, but when a homeowner walks away with nothing, it takes on the biblical status of original sin committed by Cain and Abel for filing bankruptcy against Abraham - who do they think they are, Corporate Personhoods?
The obvious solution is for Paulson to send the unrepentant homeowners for rehabilitation to the "Remedial Redemption Property Rights Seminar" progam run by Dan Glickman of the MPAA, who is currently on a campaign to undermine net neutrality for how it tears down and destroys individual responsibility and respect for intellectual property rights.
After all, net neutrality is obviously a moral hazard that's causing the walkaway problem through perverse incentives associated with free speech and competition, which must be eliminated in order to restore honor and dignity to free markets everywhere.
If you see any Walkaways walking around, please report them to Homeland Security - Walkaway Watch List Department, and if you feel like walking away yourself, please call Big Pharma for a prescription that cures Walkaway Wannabeitis for only $10,000, or sign up for a cure on Dan Glickman's privatized fast-lane web page, whichever is less. Don't be a Walkaway - be a Paulson Parasite with walkaway privileges.
And devour ourselves we will, with the irreversible feedback of greenhouse gas emission and the resultant climatic and ecological upheaval. Even those paying to keep the truth on ice will be caught in the blowback, way sooner than any of us predicted. It's not nice to fool with Mother Nature!
When growth slows, stuff happens.
Confessions of an Economic Hit Man by John Perkins, 2004
It is not driven by a small band of men but by a concept that has become accepted as gospel; the idea that all economic growth benefits humankind and that the greater the growth, the more widespread the benefits. This belief also has a corollary: that those people who excel at stoking the fires of economic growth should be exalted and rewarded, while those born at the fringes are available for exploitation. We have convinced ourselves that all economic growth benefits humankind, and that the greater the growth, the more widespread the benefits.
Our global culture is a monstrous machine that requires exponentially increasing amounts of fuel and maintenance, so much so that in the end it will have consumed everything in sight and will be left with no choice but to devour itself.
http://theformofmoney.blogharbor.com/blog/_archives/2007/5/18/2964243.html
Actually its not a 'contradiction'. But maybe its something the banker-types didn't count on.
A capitalist system is a very individualistic system. Each actor in the system is expected to make decisions that make sense for themselves. Then, the theory is that at higher levels this leads to good decisions for the system as a whole.
If individuals are presented with two choices, and one leads to a 'bottom line' of a $100,000 more than the other, even if in this case if its the 'lessor of two evils' and its a $100,000 less in losses than the other course, then you'd expect individuals in a capitalist system to make the decision that's a $100,000 better for them.
The bankers won't like it. But that's the system. Sorry Charlie.
Note: While the bankers generally think that what's good for them is what's good for capitalism, that's not always the case. As usual, that class will try to suddenly restrict the 'freedom' of the system to get the outcome that's to their benefit. This class typically throws the 'theory' of 'free markets' out the window whenever they have a chance to make money. For instance, they love monopolies. And they love government regulation and protection when they've bought it for themselves.
One more of the absurd contradictions of capitalism, well elucidated by Mr Baker.
Doesn't this selfish individualistic behavior, which also extends to issues of social and environmental importance, suggest that the creation of "Homo capitalisticus" has been a smashing success?
Mr. Paulson isn't the only capitalist who wants people to put aside self-interest.
Gee, Mr. Paulson, it really is a terrible thing when natural persons begin to behave like those judicually created "corporate persons" that you represent. We're truly sorry, but our fiduciary responsibilities to our familial "shareholders" demand that we do so as an absolute obligation taking precedence over all others.
If the corporate elite do it, it is good business, if anyone else does it it is stealing.
If a fellow like Dean Baker would take a few days to read the US Constitution, paying special attention to the preamble and the stated purpose to "promote the general Welfare", he would recognize that Henry Paulson is representative of a powerful faction, a small minority of the population, that has seized control of the US Government and led it away from its original mission into the service of a small, elite group. This group has effectively had this control since about 1913 when it took control of the US Government financial apparatus.
They are popularly called "neo-cons" these days, but when the Constitution was written, they were called "monarchists" and "high Federalists". They were vengeful conservatives, closet worshipers of the Crown who regarded themselves as the rightful rulers over the unwashed rabble. Jefferson and Madison threw down the gauntlet and formed the Republican Party in defense of the Constitution.
Today, the high Federalists have morphed into a global superclass, transcending borders and linking interests around the world. 1% of the global population, about 37 million people, owns 40% of global wealth.Their chief vehicle for wealth accumulation and control is the international corporation. Without proprietary information, no corporation can exist.
Competitive advantage is created by law, not by superior performance in the market. Law is created by governments which are bought by the owners of the financial apparatus.
Use of terms like "capitalist" or "socialist" just obscure the simple reality of what is going on: a great counter revolution against the popular franchise and the Declaration of Independence. The ancient aristocracies that have dominated the world are returning again. The new capitalist man is the same as the new socialist man: a peasant.
It is truly a shame that the leaders and opinion makers cannot see the forest for the trees....
"There may be an immurement clause hidden in there.
No walking away from that one."
Yah right. That would be all the more reason to walk away ~ just let 'em try and imprison people. Talk about a way to jump start a revolution.
That's why we have laws in this country, to protect corporations from the selfish acts of individual citizens.
In Joseph Heller's novel, "Catch 22", Milo Minderbender commits atrocities against his fellow soldiers saying, "what's good for Milo Minderbender is good for the US army". He was the quartermaster and a true capitalist.
ezeflyer,
Thanks for pointing that out. As an electric vehicle experimenter, I grow increasingly alarmed at how big corporate patent holders of battery technologies have stifled innovation.
Thankfully, for now, I can get gray-market batteries from the Chinese.
The Wright Brothers would be out of luck nowadays. The Langley Corporation would have sued them for dozens of patent infringements, then launched their "aerodrome" off that ridiculous houseboat into the Potomac, declared human flight to be impossible and back it up by suing anyone caught carving a propeller for the next 19 years.
As a multiple patent holder, I can safely say that by far, most patents only benefit rich corporations who can imitate, produce and have the money-power to defend it in court.
Check out the Selden Patent on "Internal Combustion" by Edwin Black. It set the automotive industry back for decades with nuisance lawsuits and patent manipulation.
The average artist or inventor has little if any protection from his or her patent or copyright and has to associate, with great difficulty and at great economic disadvantage, with a major corporate recording studio, art dealership or other corporate entity that is committed to and financially able to defend the patent.
I applaud those people who are walking away from their mortgages. Yeah, they should have read the fine print, but at least they are fighting back and not cooperating in their financial demise.
Isn't it hypocritical that the most irresponsible and predatory corporate and government types are always telling us how responsible we should be with respect to our loss and their gain. People wake up!
Even though we are often exhausted and it is exceedingly small, WE MUST ALWAYS READ THE FINE PRINT, and DO NOT TRUST THE SALESMAN who stands to profit off our ignorance. Research before you buy. What is the saying? Caveat emptor, buyer beware.
Carefully read and reread the small print of your mortgage contracts folks.
There may be an immurement clause hidden in there.
No walking away from that one.
If copyright laws had always existed as they were adapted to protect businesses in the age of the internet, the Isaac Newton company would own everything.
"If people act in their own self-interest..."
We wouldn't have an obesity epidemic... or 40,000 killed on the roads every year... or up to 500,000 tobacco-related deaths/year... etc.
Side note to DB: gotta disagree with ya on your artistic copyright position and your support of that voucher nonsense. Seriously, to suggest that a "starving artist" who labors away for, say, a year or more creating should then just give it away with the hopes of earning "an average of $40,000 per year" is just silly.
Would such a system also apply to, say, Proctor and Gamble? They "invent" a new toothbrush and then anyone can copy it? What about Monsanto - would their transgenic mutant organism copyrights - of which they own 90% - become null and void? No? But Mozart writes a symphony and it should then be free to any sucker who coughed up a $100?
Clearly, DB has no idea just how difficult art creation truly is, and, for some reason, doesn't believe the price of art should be determined by the market. And what happens when Pepsi uses "free" art to sell their crap? They make millions and the artist gets to "apply" for crumbs from the AV fund?
If you asked Americans to define supply-side economics, most would probably not be able to to so and that is the problem. Until a majority of Americans can identify the root of the problem , there is not much chance that they will be able to identify (let alone support) anybody who is able to provide a solution.
Actually, this is a classical contradiction of capitalism that Marx wrote about. He was referring to the tendency of capitalist business activity to sow the seeds of it's own demise - leading to the business cycle in the short term, and it's collapse, social upheval, and it's evolutionary/revolutionary replacement, in the long term.
The individual is acting in his capitalist self interest by walking away from his debt on a heavily devalued house, but this self interested behavior, multiplied by a million, will cause the failure of banks, leading to economic depression, which will hurt many of the same poeple who thought they were helping themselves. This is what is meant by "contradiction".
We are free to believe or not believe in whether Marx's predictions have any merit - at very least it is taking a bit longer than he thought. But you cannot argue with Marx's diagnosis of the problem - no one has described the system better than him.