Image via Wikipedia
My thesis is that the current American Business Model (ABM) is fundamentally flawed and needs to be re-thought.
We like to think of it as the very manifestation of American freedom – as American as apple pie – but the truth is that our current version isn’t just stale. It’s rotten. It has has become corrupted. To call it crony capitalism, while accurate enough, is to be charitable. It has become sleazy into the bargain, and where the financial sector is concerned – which produced a staggering 40 percent of corporate profits up until the Great Recession – “rampantly greedy and crooked into the bargain” might describe it better.
Good grief! The damage to this country has been incalculable; and it continues. As for bank profits, if one made the banks fully accountable, and subtracted the real costs of supporting them – which has not been done – I suspect we would find that that these profits were illusory.
Yes, I know that is fighting talk, but bear with me. I’m not saying that that there are not great strengths in the ABM (though one has to look, and pause, and think). However, I am saying that it contains systemic weaknesses which we need to do something about.
Think in terms of a well built boat which is sinking because it has holes in it. Given that it is full of people, the first thing you do is patch the holes. Later, you may decide to buy a new boat, but it will still be broadly similar but may be significantly different in detail; and, as always, the devil is in the detail.
In short, I’m not suggesting we give up capitalism and switch to sun worshipping or outright theft (A form of capitalism we made much use of where Native Americans are concerned). I am arguing that we should introduce some intelligence (and decency) into the system of capitalism we have now.
Others have, and it works for them. Why shouldn’t it work for us? Enter Intelligent Capitalism. What a novel concept! Let me list its requirements:
NOTE: ABM = American Business Model
1. The purpose of an economic system, such as the ABM, is to deliver an acceptable quality of life to the vast majority (and preferably all) of the population. At its core, a sound economic system is essentially a way of cooperating (believe it or not) to maximize resources; with rewards and competition providing the incentives, and regulations constituting the rules of the game. Here, we need a balance.
The ABM fails.
2. A viable economic system needs to be fair, and to be seen as fair. This is fundamental to human nature (flawed though it is). Lack of fairness invariable results in social unrest; or worse. Short of total oppression, there are really no exceptions to this principle. Massive income inequality is neither seen as fair, nor is it fair; and it has a disastrous effect on our well being in general.
The ABM fails.
3. A viable economic system needs to provide full employment at pay that allows for a reasonable lifestyle; and provided the economy with purchasing power. Lack of demand leads to unemployment.
The ABM fails.
4. A viable economic system should encourage, and achieve, productivity gains and steady growth.
The ABM fails.
5. A viable economic system should strike a healthy balance between work and one’s private life; and must include paid sick leave and several weeks of vacation. In short, people should be treated decently. They work better that way.
The ABM fails.
6. A viable economic system should provide both stability, and economic security. This requires a robust social safety net.
The ABM fails
7. A viable economic system should encourage both savings and investment.
The ABM fails
8. A viable economic system should fundamentally focus on the real economy, and not be overly focused on making money with money. It should add real value.
The ABM fails.
9. A viable economic system should not be overly centralized, but should function at local level as much as possible. This has numerous advantages ranging from the fact that most people prefer it, because it promotes personal relationships, to the fact that it foster small business, and thus unemployment. In addition, it promotes resilience.
The ABM fails.
10. A viable economic system should, more or less, be able to balance its budget and its trade. That means it must be internationally competitive, and be capable of producing goods people want.
The ABM fails.
11. A viable economic system should constantly be investing in the future, whether it be in infrastructure or capital equipment, or housing, or the public good in general. Lack of investment may go unnoticed in the short term, but has serious consequences.
The ABM fails.
12. A viable economic system be able to guarantee savers an adequate financial return, and, at the same time, be able to supply capital – particularly at local level – when needed.
The ABM fails.
13. A viable economic system needs to be able to cope with change in such a way that employees are paid until they find another job. and are retrained if necessary.
The ABM fails.
14. A viable economic system needs to encourage a well educated, well trained, healthy work force.
The ABM fails.
15. A viable economic system must be be environmentally aware, and not pollute, or otherwise degrade the environment.
The ABM fails.
16. A viable economic system should be based on the free market, and open competition, with monopolies and oligopolies being opposed.
The ABM fails.
17. A viable economic system should have a simple, fair, transparent tax system.
The ABM fails.
18. A viable economic system should encourage a wide variety of different enterprise structures and should not be overly dominated by corporations.
The ABM fails.
19. A viable economic system requires that capital and labor co-exist in reasonable harmony; and that there be a balance of power.
The ABM fails.
20. A viable economic system require a government which is responsive to the electorate as a whole, and not controlled near entirely by the Rich and Special Interests.
The ABM fails.
I don’t wish to cause you indigestion, but I would like to point out that the current 
Worse still, the ABM isn’t proving to very effective. It is just not delivering what Americans need.
I submit the need for change is self evident, and have to wonder why President Obama has not articulated that fact.
I (temporarily) rest my case.
No comments:
Post a Comment