America: The Best Country in the World at Being Last -- How Can We Change That?
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The American political system is in deep trouble for another reason—it is moving from democracy to plutocracy and corporatocracy, supported by the ascendancy of market fundamentalism and a strident antiregulation, antigovernment, antitax ideology. The hard truth is that our political system today is simply incapable of meeting the great challenges described here. What we have is third-rate governance at a time when the challenges we face require first-rate governance.
America thus confronts a daunting array of challenges in the maintenance of our people’s well-being, in the conduct of our international affairs, in the management of our planet’s natural assets, and in the workings of our politics. Taken together, these challenges place in grave peril much that we hold dear.
The America we must seek for our children and grandchildren is not the America we have today. If we are going to change things for the better, we must first understand the forces that led us to this sea of troubles. When big problems emerge across the entire spectrum of national life, it cannot be due to small reasons. We have encompassing problems because of fundamental flaws in our economic and political system. By understanding these flaws, we can end them and move forward in a very different direction.
I THINK AMERICA GOT OFF COURSE for two primary reasons. In recent decades we failed to build consistently on the foundations laid by the New Deal, by Franklin Roosevelt’s Four Freedoms and his Second Bill of Rights, and Eleanor Roosevelt’s Universal Declaration of Human Rights. Instead, we unleashed a virulent, fast-growing strain of corporate-consumerist capitalism. “Ours is the Ruthless Economy,” say Paul Samuelson and William Nordhaus in their influential textbook, Macroeconomics. And indeed it is. In its ruthlessness at home and abroad, it creates a world of wounds. As it strengthens and grows, those wounds deepen and multiply.
Such an economy begs for restraint and guidance in the public interest—control that can only be provided by government. Yet, at this point, the captains of our economic life and those who have benefited disproportionately from it have largely taken over our political life. Corporations, long identified as our principal economic actors, are now also our principal political actors. The result is a combined economic and political system—the operating system upon which our society runs—of great power and voraciousness, pursuing its own economic interests without serious concern for the values of fairness, justice, or sustainability that democratic government might have provided.
Our political economy has evolved and gathered force in parallel with the course of the Cold War and the growth of the American Security State. The Cold War and the rise of the American Empire have powerfully affected the nature of the political-economic system—strengthening the already existing prioritization of economic growth, giving rise to the military-industrial complex, and draining time, attention, and money away from domestic needs and emerging international challenges. This diversion of attention and resources continues with our response to international terrorism.
So what are this operating system’s key features, which have been given such free rein by these developments? First, ours is an economy that prioritizes economic growth above all else. We think of growth as an unalloyed good, but this growth fetish is a big source of our problems. We’ve had plenty of growth in recent decades—growth while wages stagnated, jobs fled our borders, life satisfaction flat-lined, social capital eroded, poverty and inequality mounted, and the environment declined. Today, U.S. GDP has regained its prerecession level, but 15 percent of American workers still can’t find full-time jobs.
Another key feature of today’s dysfunctional operating system is how powerfully the profit motive affects corporate behavior. Today’s corporations have been called “externalizing machines,” so committed are they to keeping the real costs of their activities off their books. Profit can be increased by keeping wages low and real social, environmental, and economic costs externalized—borne by society at large and not by the firm. One can get some measure of these external costs from a recent analysis of three thousand of the world’s biggest companies. It concluded that paying for their external environmental costs would erase at least a third of their profits. Profits can also be increased through subsidies, tax breaks, regulatory loopholes, and other gifts from government. Together, these external costs and subsidies lead to dishonest prices, which in turn lead consumers to spur on businesses that do serious damage to people and planet.