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The Carnage of Capitalism

Paul Buchheit

Capitalism is expanding like a tumor in the body of American society, spreading further into vital areas of human need like health and education.

Milton Friedman said in 1980: "The free market system distributes the fruits of economic progress among all people." The father of the modern neoliberal movement couldn't have been more wrong. Inequality has been growing for 35 years, worsening since the 2008 recession, as a few well-positioned Americans have made millions while the rest of us have gained almost nothing. Now, our college students and medicine-dependent seniors have become the source of new riches for the profitseeking free-marketers.

Higher Education: Administrators Get Most of the Money

College grads took a 19 percent pay cut in the two years after the recession. By 2013 over half of employed black recent college graduates were working in occupations that typically do not require a four-year college degree. For those still in school, tuition has risen much faster than any other living expense, and the average student loan balance has risen 91 percent over the past ten years.

At the other extreme is the winner-take-all free-market version of education, with a steady flow of compensation towards the top. Remarkably, and not coincidentally, as inequality has surged since the 1980s, the number of administrators at private universities has doubled. Administrators now outnumber faculty on every campus across the country.

These administrators are taking the big money. As detailed by Lawrence Wittner, the 25 highest-paid presidents increased their salaries by a third between 2009 and 2012, to nearly a million dollars each. For every million-dollar public university president in 2011, there were fourteen such presidents at private universities, and dozens of lower-level administrators aspiring to be paid like their bosses. At Purdue, for example, the 2012 administrative ranks included a $313,000-a-year acting provost, a $198,000 chief diversity officer, a $253,000 marketing officer and a $433,000 business school chief.

All this money at the top has to come from somewhere, and that means from faculty and students. Adjunct and student teachers, who made up about 22 percent of instructional staff in 1969, now make up an estimated 76 percent of instructional staff in higher education, with a median wage in 2010 of about $2,700 per course. More administrative money comes from tuition, which has increased by over 1,000 percent since 1978.

At the for-profit colleges, according to a Senate report on 2009 expenses, education companies spent about 23 percent of all revenue on marketing and advertising, and almost 20 percent of revenue on pre-tax profits for their shareholders. They spent just 17.2 percent of their revenue on instruction.

Medicine: A 10,000 Percent Profit for Corporations

As with education, the extremes forced upon us by free-market health care are nearly beyond belief. First, at the human end, 43 percent of sick Americans skipped doctor's visits and/or medication purchases in 2011 because of excessive costs. It's estimated that over 40,000 Americans die every year because they can't afford health insurance.

At the corporate end, drugmakers are at times getting up to $100 for every $1 spent. That's true at Gilead Sciences, the manufacturer of the drug Sovaldi, which charges about $10 a pill to its customers in Egypt, then comes home to charge $1,000 a pill to its American customers. The 10,000 percent profit is also true with the increasingly lucrative, government-funded Human Genome Project, which is estimated to potentially return about $140 for every $1 spent. Big business is quickly making its move. Celera Genomics, Abbott Labs, Merck, Roche, Bristol-Myers Squibb, and Pfizer are all starting to cash in.

The extremes of capitalist greed are evident in the corporate lobbying of Congress to keep Medicare from negotiating better drug prices for the American consumer. Americans are cheated further when corporations pay off generic drug manufacturers to delay entry of their products into the market, thereby ensuring inflated profits for the big firms for the durations of their shady deals.

Global Greed

Lives are being ravaged by unregulated, free-market capitalism, in the U.S. and around the world. According to the Global Forum for Health Research, less than 10 percent of the global health research budget is spent on the conditions responsible for 90 percent of human disease.

And the greed is getting worse. Perhaps it's our irrational fear of socialism, peaking in the years after World War 2, that has inspired our winner-take-all culture. In the Reagan era we listened to Margaret Thatcher proclaim that "There is no such thing as society."

In a more socially-conscious time, in 1955, after Dr. Jonas Salk had developed the polio vaccine, he was asked by reporter Edward R. Murrow: "Who owns the patent on this vaccine?" Responded Salk, "Well, the people, I would say. There is no patent. Could you patent the sun?"

A free-market capitalist might remind us that a skillful hedge fund manager can make as much as a thousand Jonas Salks.


Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
Paul Buchheit

Paul Buchheit

Paul Buchheit is an advocate for social and economic justice, and the author of numerous papers on economic inequality and cognitive science. He was recently named one of 300 Living Peace and Justice Leaders and Models. He is the author of "American Wars: Illusions and Realities" (2008) and "Disposable Americans: Extreme Capitalism and the Case for a Guaranteed Income" (2017). Contact email: paul (at) youdeservefacts.org.

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