The Looting Machine Called Capitalism - By Paul Craig Roberts
The unambigious fact
is that US capitalism is a mechanism for looting the many for the benefit of
the few. Neoliberal economics was constructed in order to support this looting.
In other words, neo-liberal economists are whores just like the Western print
and TV media. Yet you will hear those who are being looted praise the merits of
“free market capitalism.”.. So far we have barely scratched the surface of the
external costs that capitalism imposes. Now consider the pollution of the air,
soil, waterways, and oceans that result from profit-making activities. Consider
the radioactive wastes pouring out of Fukushima since March 2011 into the
Pacific Ocean. Consider the dead zones in the Gulf of Mexico from agricultural
chemical fertilizer run-off. Consider the destruction of the Apalachicola,
Florida, oyster beds from the restricted river water that feeds the bay due to
over development upstream. Examples such as these are endless. The corporations
responsible for this destruction bear none of the costs.
If it turns out that
global warming and ocean acidification are consequences of capitalism’s
carbon-based energy system, the entire world could end up dead from the
external costs of capitalism. Free market advocates love to ridicule economic
planning, and Alan Greenspan and Larry Summers actually said that “markets are
self-regulating.” There is no sign anywhere of this self-regulation..
I have come to the conclusion that capitalism is successful primarily
because it can impose the majority of the costs associated with its economic
activities on outside parties and on the environment. In other words,
capitalists make profits because their costs are externalized and born by
others. In the US, society and the environment have to pick up the tab produced
by capitalist activity.
In the past when
critics raised the question about external costs, that is, costs that are
external to the company although produced by the company’s activities,
economists answered that it was not really a problem, because those harmed by
the activity could be compensated for the damages that they suffered. This
statement was intended to reinforce the claim that capitalism served the
general welfare. However, the extremely primitive nature of American property
rights meant that rarely would those suffering harm be compensated. The
apologists for capitalism saved the system in the abstract, but not in reality.
My recent article, “The
Destruction of Inlet Beach,” made it clear to me that very little, if any,
of the real estate development underway would be profitable if the external
costs imposed on existing property holders had to be compensated. Consider just a few
examples.
When a taller house is constructed in front of one of less height, the Gulf view of the latter is preempted. The damage to the property value of the house whose view has been blocked is immense. Would the developer build such a tall structure if the disadvantaged existing property had to be compensated for the decline in its value? When a house is built that can sleep 20 or 30 people next to a family’s vacation home or residence, the noise and congestion destroys the family’s ability to enjoy their own property. If they had to be compensated for their loss, would the hotel, disquised as a “single family dwelling” have been built?
When a taller house is constructed in front of one of less height, the Gulf view of the latter is preempted. The damage to the property value of the house whose view has been blocked is immense. Would the developer build such a tall structure if the disadvantaged existing property had to be compensated for the decline in its value? When a house is built that can sleep 20 or 30 people next to a family’s vacation home or residence, the noise and congestion destroys the family’s ability to enjoy their own property. If they had to be compensated for their loss, would the hotel, disquised as a “single family dwelling” have been built?
Walton County,
Florida, is so unconcerned about these vital issues that it has permitted
construction of structures that can accommodate 30 people, but provide only three
parking spaces. Where do the rental guests park? How many residents will find
themselves blocked in their own driveways or with cars parked on their lawns? As real estate
developers build up congestion, travel times are extended. What formerly was a 5
minute drive from Inlet Beach to Seaside along 30-A can now take 45 minutes
during summer and holidays, possibly longer. Residents and visitors pay the
price of the developers’ profits in lost time. The road is a two-lane road that
cannot be widened. Yet Walton County’s planning department took no account of
the gridlock that would emerge.
As the state and
federal highways serving the area were two lanes, over-development made
hurricane evacuation impossible. Florida and US taxpayers had to pay for turning
two lane highways into four lane highways in order to provide some semblance of
hurricane evacuation. After a decade, the widening of highway 79, which runs
North-South is still not completed to its connection to Interstate 10. Luckily,
there have been no hurricanes. If developers had to
pay these costs instead of passing them on to taxpayers, would their projects
still be profitable?
Now consider the
external costs of offshoring the production of goods and services that US
corporations, such as Apple and Nike, market to Americans. When production
facilities in the US are closed and the jobs are moved to China, for example,
the American workers lose their jobs, medical coverage, careers, pension
provision, and often their self-respect when they are unable to find comparable
employment or any employment. Some fall behind in their mortgage and car
payments and lose their homes and cars. The cities, states, and federal
governments lose the tax base as personal income and sales taxes decline and as
depressed housing and commercial real estate prices in the abandoned
communities depress property taxes.
Social security and Medicare funding is
harmed as payroll tax deposits fall. State and local infrastructure declines.
Possibly crime rises. Safety net needs rise, but expenditures are cut as tax
revenues decline. Municipal and state workers find their pensions at risk.
Education suffers. All of these costs greatly exceed Apple’s and Nike’s profits
from substituting cheaper foreign labor for American labor. Contradicting the
neoliberal claims, Apple’s and Nike’s prices do not drop despite the collapse
in labor costs that the corporations experience.
A country that was
intelligently governed would not permit this... read more:
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