Feudal Lords, Capitalists and Corporations

Feudal Lords, Capitalists and Corporations

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Capitalism was built on the principle of free markets and open competition. Adam Smith proposed a hidden hand that regulates these markets and classically advised that absolutely no regulation and supervision is required, as this hidden hand takes care of everything. On the other hand, Karl Marx proposed that every society is a commune and everything must be owned by everyone. Historically speaking. in practical world, none of these extreme views survived in their purest form. World realized and it was practically proven that while on one hand, everything owned by everyone, in the absence of competition and reward, is a road to suffocation of economic and social growth, and on the other hand, the hidden hand of supply and demand, does not always take care of everything and some intervention and regulation is required, to make sure that power is not abused and everyone plays fair. Beside, it is universally accepted that certain things like, defense and national security, law and order, high school education, currency, transport and communication utilities like roads, air and virtual waves, cannot be entirely left on private ownership. Virtually, every country in the world, now has a some sort of hybrid of these two extremes, in place. Some of these hybrids lean towards left, some towards right and discussion continues that where is the correct balancing point and how much of which is too much? Probably, there is no one, right balancing point and it differs in different situations and at different times. One thing may be perfectly right in one situation, at one time, but may turn out to be wrong in other situation, at other time. Still we can and must be able to find some broader, universally acceptable and applicable principles that are always good, in every situation like national security is Federal government’s job or highways must be maintained by states or high school education must be governed by local governments.
Modern global markets can be justifiably compared with grounds and play fields and government with a referee, who’s job is to make sure that every player is provided with open and plain field and every one plays fair.
Fair play in economic and financial markets also depends on the conditions that everyone has equal access and open field to play with and no one is allowed foul play and must not be able to abuse power and resources. In economic terms, there shouldn’t be any monopolies, cartels and anti-trust, fraudulent and malpractices.
Whenever, any major wrong doing happens that has widespread, deep and obvious implications like market crashes and failures and when as a result of it there are proposals for more government intervention and regulation, there is always a loud and repeated outcry against too much government. In this post we will try to analyze on factual bases and not on propaganda or ideological bases, how correct and sound is the argument against too much government. Do we really have what is termed as too much government, or the fact is contrary to it, and we actually need more government intervention and regulation of economic and financial markets?
Remember, before Capitalism, there was feudalism and it is still the dominant economic system in many countries of the world. People all over the world, specially in West, revolted against feudalism because it had the monopoly of a certain class on entire economic, political and social system. There were elites, who had all the privileges, respect, power, wealth and money and then there were other people who had none of these. The feudal system was replaced by Capitalism, after several bloody revolutions, all over the world, particularly in West, on the promise of a sizable middle class and equal opportunities for all citizens, that were supposed to build the bridge between upper and lower class. Initially, Capitalism provided these results and gained unprecedented world-wide popularity as a successful economic system. But, recently, those trends are noted to be reversed and the gap between rich and poor is widening, again. This is generally defended as everyone’s right to make as much money as possible. Accepted. But if accepted unconditionally, current trends propose that a large proportion of world’s population has suddenly become stupid and cannot compete, anymore, which is ridiculous and illogical. It is an impossible proposition. What factual analysis shows, is that Capitalism has created a new privileged class, that is brutally abusing its resources and power. This is creating an unequal field between privileged ones and the others, a hazard that Capitalism was supposed to avoid, not accelerate. Lets analyze this claim in the light of facts.
Disney, Viacom, Time Warner, News Corporation and General Electric together own more than 90% of the media holdings in United States.
U.S. Political system has the monopoly of two political parties, Republican Party and Democratic Party.
Recent financial crisis provided a golden opportunity to break down the monopolies in automotive industry, but it was failed by corporate lobbies with the help of their pimps in Congress. U.S. automotive market has the oligopoly of General Motors, Ford, Chrysler, Honda and Toyota.
Breakfast cereals have the oligopoly of general Mills, Post and Kellogg.
50% of soft drinks market is dominated by Coca Cola, 21% by PepsiCo, 7% by Cadbury Schweppes and most of the remaining market is occupied by Cott Corporation and National Beverage Company.
Above are just a few of the examples, that spread over almost all the sectors of economy. So, where are the free markets? Where is the open competition? and where are the equal opportunities and open fields for everyone? Isn’t it that the feudal lords are replaced by even fewer feudal Capitalists, who have a influence that is far more strong, deep and widespread (global) compared to the feudal lords? Don’t they have far more money and influence than any feudal lord even imagined?
These companies spend hundreds of billions of dollars every year in extremely strong, powerful and influential lobbies around the world, that shape the policies at every level like, United Nations and other powerful and influential international bodies, institutions, organizations, funds and charities; federal governments; provincial and state governments; and local, city and county governments. They also dictate the policies to most commercial and even state-run media, because the survival of these media depends on advertising revenues from big, multinational corporations. They also run and finance most political parties, the election campaigns of most political parties and their candidates around the world. So, where is freedom of choice and speech? Where is the open access to information for everyone?
Carlos Slim Helu holds a fortune of 53.5 billions, Bill Gates worth 53 billions, Warren Buffet 47 billions, Mukesh Ambani of India 29 billions, and Lakshmi Mittal, an Indian British 28.7 billions. Average worth of 1011 billionaires worldwide, 40% of them U.S. nationals, is 3.5 billions, 0.5 billions higher than a year ago. 164 of them are comebacks and 97 new, in the middle of one of worst financial crisis in history of world, when most people lost their money and the incomes of most people dropped worldwide. Total worth of these billionaires is 3.4 trillion dollars, 38% of it belongs to U.S. nationals.
In 2004, BP had sales of 252.4 billions (same company that is found to have serious discrepancies and negligence in the maintenance of its wells, resulting in huge spill in gulf of Mexico, seriously endangering wild life, echo systems, economy, business and tourism. Company has been unable to stop this spill for over forty days now), Exxon Mobil had 237.1 billions in sales, Total energy company of France made 131.6 billions, Allainz of Germany made 112.3 billions and ConocoPhillips made 104.7 billions.
Compare these with median household income in United States in 2007 was $50,233.00, a rise of 1.3% compared to previous year. Average median income of full-time working men, in United States during year 2007, was raised to $45,113 from $43,460, (3.7 time the minimum wage compared to 3.6 times the minimum wage in previous year). Full time working women earned an average of $35,102 in 2007, compared to $33.437 in 2006 (raised to 2.9 times of minimum wage from 2.8 times of minimum wage in 2006). The median income per household member (including all working and non-working members above the age of 14), in United States, was $26,036 in 2006. 12.3% of all households in United States lived in poverty in 2007.
Every person has a right to make money, as much as possible. Accepted. Every person has a different capacity to make money. Accepted. But, can these mind-boggling differences like, many living in poverty, while some people are making tens of billions of dollars and some companies making hundreds of billions of dollars, can be created just by one’s ability to make or not make money? A careful analysis of data and reports proves that this is not the case! Power, influence, contacts, lobbying, anti-trust practices and money itself plays a huge role in these success stories. When jobs of these rich and wealthy are endangered, sky starts falling and everyone in congress and media, becomes extremely active to save them. But, what about 12.3 percent living in poverty in world’s richest country? It looks like nobody cares about them! Sky doesn’t fall with their hunger and poverty. They are a different type of human beings compared to ones who work at Wall Street. If you talk about raising minimum wage for them, business is immediately endangered. Helping them is welfare, a burden on economy. It is hard to extend unemployment payments for them, even in the toughest time, because “we cannot afford it”. Universal health care will bankrupt 2 trillion-dollar economy, while we keep providing multi billion dollar bailout packages to wall street and repeatedly failing automobile companies, from tax payers money. Don’t we send our representatives to congress to safeguard our (voters, citizens and tax payers) interests and rights? Or we send them to become our lords and distribute our money to people and companies that are already rich and that messed up the world’s economy?