Capitalists in America are in the forefront of the free market economy. The basic idea under this platform of philosophy is that the market is self-regulatory. Adam Smith’s famous “invisible hand” is considered as the most supporting philosophical tool for capitalism. Market economy believes the notion of demand and supply will even out at the end of the day. With the emergence of super-capitalism, we observe the dominance of corporate giants over government regulations. President Reagan induced the interest of multinational corporations (MNCs) in public policies successfully.
The privatization and contracting out policies in 1980s provided the upper hand to MNCs so much so that all the major industries took full advantage of the existing political trends. They became more and more greedy.
Under Reagan presidency, a “deregulation” movement swept America. As a result, major sectors of the economy (insurance, drugs, utility, energy, retail, health, media, banking, finance, etc) were consolidated into a few hands.
Reagan’s successors, willingly or unwillingly, blessed the deregulation fiasco. As a consequence, the MNCs monopolized business in their sectors in a deregulated environment.
Finding loopholes in deregulated policies and blessing from the so-called regulating agencies, the big corporations became bigger. In the last three decades, we saw lots of “merger and acquisition” (M&A).
As consequence, we arrived at the era of super-capitalism. Only a few MNCs in every sector of the economy are the major players; they are the defacto regulators of the respective industry.
In a super-capitalist economy, big corporations and government collaborate because one cannot live without other. Governments become so dependent in the age of super-capitalism, they cannot run on their own.
The war in Iraq is the best example. Our government can’t run the war without the help of big business. A large part of the war has been contracted out, which ensures big profits for big MNCs.
In the era of super-capitalism, lobbyists are the “eyes and ears” of the big corporations. The fabulously paid lobbyists make sure Congress does not regulate and oversee too tightly. In the meantime, MNCs can do whatever they need – to make profits and make fat CEO checks fatter.
The sub-prime crisis was supposed to happen.
The dot.com bust was supposed to happen.
The saving and loan crisis was supposed to happen.
The energy crisis was supposed to happen.
The health care crisis was supposed to happen. (I can rattle on and on – our educational crisis, our prison crisis, our foreign policy crisis, etc). Over-deregulation did what was supposed to happen.
Unscrupulous and self-righteous capitalists were allowed to mess up the economy due to lack of prudent regulations, which did not focus on the overall welfare of the people to begin with.
Nothing happens in one day. No problems occur in one day. It piles up if not attended to in time. The problem with the super-capitalists is that they are short-sighted. They look at their narrow vision and quarter-to-quarter profit sheet. By default they cannot gaze down the longer distance. Even if they do, they do it for their own narrow territory.
They want to be efficient, undermining equity and fairness. They cannot pursue policies for the overall improvement of society. It is built into their nature, like the evolved elephant trunk. Common people, common issues and common problems get marginalized. Social problems go unaddressed because the government is too busy making MNCs happy.
The emergence of super-capitalism has three consequences. First, governments are becoming too cozy with big corporations. Second, government regulations ensure the MNCs’ interest first and the people’s interests later. Third, the fundamental problems in America remain unaddressed (like education, health care, jobs, housing, retirement, etc.).
As a consequence, America will lose leadership in the affairs of the world – not that it hasn’t already. Haven’t you heard? The 21st century possibly belongs to Asia. That’s why we need a government of the people, by the people and for the people, not other way around. We need to bring America back on track.