More Like Crapitalism!

I’ve been gone a bit!! After the last posts I started a huge push to craft holiday gifts for my family (a ton of awesome leather items!!) and then went into winter depression/hibernation mode. Back at it!

So, let’s shit on capitalism, because we haven’t done that enough already. Capitalism’s evolution from a system with some semblance of general welfare for employees to one obsessed with short-term gains and stock prices is a revealing tale of priorities, power, and systemic shifts. Let’s dive into this transformation and dissect the factors behind it.

The Golden Age of Capitalism: Post-War Prosperity

After World War II, capitalism in many Western countries, particularly the United States, entered what is often referred to as the “Golden Age.” This era, roughly spanning from the late 1940s to the early 1970s, was characterized by:

1. Strong Labor Unions: Unions were powerful and played a crucial role in securing better wages, benefits, and working conditions for employees. This period saw significant advancements in workers’ rights and living standards.
2. Corporate Responsibility: Many companies adopted a paternalistic approach, offering stable jobs, pensions, healthcare, and other benefits. The notion of the “social contract” between employers and employees was prevalent.
3. Government Regulation: There was substantial government intervention in the economy. Policies such as the New Deal in the U.S. had established regulations that protected workers and curtailed corporate excesses.
4. Economic Growth: The period saw unprecedented economic growth and a relatively equitable distribution of wealth, with rising living standards for a broad segment of the population.

The Shift: Neoliberalism Takes Hold

The mid-1970s marked the beginning of a seismic shift in economic policy and corporate behavior, primarily driven by the rise of neoliberalism. Key features of this shift include:

1. Deregulation: Governments began to roll back regulations that had been put in place to control corporate behavior, arguing that free markets were the most efficient way to allocate resources.
2. Weakening of Unions: There was a concerted effort to undermine labor unions, reducing their power to negotiate for better wages and conditions. This was evident in policies such as the Taft-Hartley Act in the U.S. and similar measures in other countries.
3. Globalization: Corporations increasingly moved production overseas to take advantage of cheaper labor and lax regulations, eroding domestic job security and working conditions.
4. Financialization: The financial sector grew in influence, with corporations prioritizing shareholder value above all else. This meant focusing on stock prices and short-term gains rather than long-term stability and employee welfare.

The Modern Era: Profit over People

In recent decades, the obsession with short-term gains has only intensified. This is evident in several ways:

1. Quarterly Reports and Stock Prices: Companies are under immense pressure to meet quarterly earnings expectations. This has led to a focus on cost-cutting measures, often at the expense of employees, such as layoffs, wage stagnation, and reduced benefits.
2. Executive Compensation: CEO and executive compensation have skyrocketed, often tied to stock performance. This creates a perverse incentive to prioritize stock prices over the welfare of the workforce.
3. Gig Economy: The rise of the gig economy has further eroded job security. Companies like Uber and Amazon rely on precarious, often underpaid labor, eschewing traditional employee benefits and protections.
4. Hostile Work Environments: The push for productivity and profit has led to increasingly hostile work environments where employees are treated as expendable resources rather than valued contributors.

The Ideological Underpinnings

The ideological shift towards prioritizing shareholders can be traced back to influential thinkers like Milton Friedman, who argued in the 1970s that the sole responsibility of a business is to increase its profits. This view has been widely adopted and entrenched in corporate governance and business schools, reinforcing the focus on short-term gains and stock prices.

Consequences and Critique

The consequences of this shift have been stark:

1. Income Inequality: The wealth divide has widened dramatically, with a tiny elite accumulating vast wealth while the majority of workers face stagnating wages and precarious employment.
2. Social Unrest: The erosion of job security and benefits has led to increasing social unrest and dissatisfaction with the capitalist system.
3. Economic Instability: The focus on short-term gains has contributed to economic bubbles and crashes, most notably the 2008 financial crisis. Speaking of bubbles, go watch The Big Short and Margot Robbie will explain some things in a bubble bath!

Towards a New Paradigm?

Addressing these issues requires a fundamental rethink of our economic system. Some potential steps include:

1. Strengthening Labor Rights: Reinforcing unions and workers’ rights to ensure fair wages and conditions.
2. Regulating Corporations: Implementing stricter regulations to curb corporate excesses and ensure long-term stability.
3. Promoting Alternative Models: Exploring alternative economic models such as cooperatives, where workers have a stake and a say in the business.

Please consider these as just jumping off points and not some be all, end all – the idea is that there are options and likely some historical revivals and revisions of ideas as well as some currently budding or not yet considered. What we do know is this isn’t working and we need a fast transition before things get uglier.

Conclusion

The shift from a welfare-oriented capitalism to one fixated on short-term profits and stock prices reflects broader ideological and policy changes. Reclaiming a more equitable and sustainable system will require concerted effort and a willingness to challenge the entrenched interests that benefit from the status quo. To me, the wildest thing is how solvable this is. By learning from the past and advocating for systemic change, we can strive for a future where capitalism serves the many, not just the few. Oh, and fuck Ronald Reagan.