Tag Archives: Capitalism

Class In America

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Nancy Isenberg, a history professor at Louisiana State, identifies five myths about class in America. Instead of listing the myths, I’ll turn them around and present the corresponding truths: 

  1. The working class isn’t mostly white and male
  2. Most Americans notice class differences
  3. America has less class mobility than other developed countries
  4. Talent and hard work make it easy to rise above your class
  5. Racial oppression is more serious than class oppression

My favorite paragraph:

Class power takes many forms. Its enduring force, its ability to project hatred toward the lower classes, was best summed up by two presidents 175 years apart. In 1790, then-Vice President John Adams argued that Americans not only scrambled to get ahead; they needed someone to disparage. “There must be one, indeed, who is the last and lowest of the human species,” he wrote. Lyndon Johnson came to the same conclusion in explaining the racism of poor whites: “If you can convince the lowest white man he’s better than the best colored man, he won’t notice you’re picking his pocket. Hell, give him somebody to look down on, and he’ll empty his pockets for you.”

Getting Rich with Government Assistance

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[From “The Amazing Career of a Pioneer Capitalist” by Martha Howell, a review of The Richest Man Who Ever Lived by Greg Steinmetz:]

If [16th century Dutch merchant Jacob Fugger] was not the “first capitalist,” the story of his life perfectly exemplifies sixteenth-century capitalism and suggests a fundamental truth about many more forms of capitalism, one that was so monstrously embodied by the Dutch East India Company: wealth is won and preserved with the support of a state that is, in turn, dependent on the riches accumulated by the few who excel in commerce.

In some periods, at some moments of technological history, the riches are typically extracted from ever more efficient production, invariably aided by ruthless exploitation of human labor and natural resources. In others the wealth comes principally from control of supplies, manipulation of demand, and management of distribution networks. But always the merchants grow rich because state power protects them or looks away when the time is right—and does so because in a world where commerce reigns, neither the state nor a powerful merchant class can exist without the other. We have Steinmetz’s book to thank not just for telling Fugger’s story so well but also for showing us how the partnership between state and commerce worked in the earliest days of European capitalism.

[And until this day. The rest is at New York Review of Books.]

How Lobbyists Win in Washington

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[From “How the Lobbyists Win in Washington” by Jeff Madrick, a review of Lee Drutman’s The Business of America Is Lobbying:]

…there are two crucial points that are disturbing. The first is that business spends $34 on lobbying for every dollar spent by likely opponents such as labor unions and other interest groups.

The second point is, I think, Drutman’s most important. It may once have been adequate for lobbyists to provide business clients access to the right people. Today, however, they also must develop expertise on major political issues, so that they can provide policymakers with research, draft legislation, and pass on up-to-the-minute information. Lobbyists, not [government] staffers … are now the major source of information for Congress and the executive branch on major legislative issues. In one survey, two thirds of congressional staffers said they depend on lobbyists for the information they need to make legislative decisions and pass bills. Thus lobbying grows because Congress, and often the executive branch, needs lobbyists.

[Of course, we know that information is power. The rest is behind a paywall at New York Review of Books.]

Pro-Market or Pro-Big Business?

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“Donald Trump, Crony Capitalist” is a nice little article by Luigi Zingales, a professor at the University of Chicago’s business school. He analyzes one aspect of Trump’s surprising presidential campaign: the fact that Trump presents himself as a critic of big business, even though he’s a long-standing member of “the pro-business establishment”.

One of the best parts of Zingales’s article is his explanation of the difference between big business and the free market. He says the Republican establishment has spent years obscuring that difference, claiming to be champions of the free market while serving as “big business’s mouthpiece”.

Supporting the market means being in favor of competition and against concentrated economic power. Zingales cites Theodore Roosevelt, a Republican President from a century ago. From Wikipedia:

One of Roosevelt’s first notable acts as president was to deliver a 20,000-word address to Congress asking it to curb the power of large corporations (called “trusts”). He also spoke in support of organized labor to further chagrin big business … For his aggressive use of United States antitrust law, he became known as the “trust-buster”. He brought 40 antitrust suits, and broke up major companies, such as the largest railroad and Standard Oil, the largest oil company.

Being pro-market means you’re against monopolies (in which one company controls a market) and oligopolies (in which a few companies do). It also means you’re in favor of government regulations and policies that help make markets competitive. A fair, properly functioning market requires that the playing field be level, not slanted to the advantage of insiders or the powerful.

Big business, however, is totally in favor of special advantages when it increases profits. As Zingales says, “business executives are only pro-market when they want to enter a new sector”. But:

[Once] they become established in a sector, they favor entry restrictions, excessive licensing, distortive regulation and corporate subsidies. Those policies are pro-business (in the sense that they favor existing businesses), but they are harmful and distort a competitive market economy.

Zingales points out, for example, how rare it is for Republican politicians to call for antitrust enforcement, the prosecution of white-collar criminals and pro-market policies like fostering competition in the market for prescription drugs. That’s because the men who run the Republican Party are in the business of protecting big business, not the market.

Many of his supporters think Trump is fervently pro-market, but:

As a businessman Mr. Trump has a longstanding habit of using his money and power aggressively to obtain special deals from the government… He is, in short, the essence of that commingling of big business and government that goes under the name of crony capitalism.

Anyway, it’s a good little article that’s worth reading even if you’re sick of hearing about the Republican freak show currently touring the country.

Parting thought:

The Bill of Rights would have been better if the Second Amendment, including its call for a properly-regulated militia, had never been written. In its place, we could have had an amendment like this:

A well-regulated Market, being necessary to the prosperity of a free State, the right of the people to enjoy the benefits of fair competition shall not be infringed except to benefit the Nation as a whole.

If You Have To Ask (World Travel Edition)

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If someone in your house subscribes to the National Geographic Society’s magazine and your zip code implies relative affluence, you probably received a very nice booklet in the mail entitled “National Geographic 2016/2017 Private Jet Expeditions”.

Ours came yesterday. It’s the kind of mail that has “recycling bin” all over it, but my curiosity was piqued. What the hell is a “private jet expedition”?

It turns out that National Geographic offers four such tours, each lasting about three weeks. One of them takes you around the world. You leave Orlando, Florida, and then visit places like Machu Picchu, Easter Island, Angkor Wat, the Serengeti and Marrakesh, before returning to Orlando. (They do let you off the plane to walk around and sleep in a nice bed – you’re not seeing everything from 20,000 feet.)

Another trip is advertised as “around the world”, but doesn’t quite make it. You board your private jet in Seattle, take a northern route, mostly across Asia, and are then deposited in Boston, 3,000 miles from where you started.

The other two trips are even more geographically limited. One begins and ends in London, with stops in places like Mongolia, Sri Lanka, Ethiopia and Israel. The other starts in Orlando and includes South America, the South Pacific, China and Japan, before inexplicably dropping you off in Seattle.

But how private is this jet anyway? I figured it must be one of those Gulfstream jobs that movie stars and titans of industry enjoy. They probably carry 10 or 20 people at most. 

Unfortunately, the National Geographic’s plane isn’t that private. You ride in “two-by-two VIP-style seats” that look really comfortable, but your “specially outfitted Boeing 757” has room for 75 other passengers.  

Thinking about this, I suppose I could handle the lack of exclusivity, but being on a tour with 75 other world travelers, plus the flight crew, plus the various guides and lecturers, plus the staff photographer, plus the on-call-24-hours-a-day physician, doesn’t seem exactly “private” to me.

Being familiar with that old expression “if you have to ask …”, I went ahead and asked (myself) anyway. The bad news is that the most expensive trip (the one that goes around the world and thoughtfully brings you back to where you started) costs $79,950. With sales tax, let’s call it $80,000. The cheapest trip goes for $67,950. But seriously, who would want to experience a bunch of exotic locations with a down-market group like that?

By the way, those prices are per person with double occupancy. If you don’t want company at night, it’s another $8,000 or so.

To sum up, if you and your significant other select one of these expeditions, your total bill will be around $150,000, maybe more, maybe less (hotel minibar and laundry, among other things, not included).

I don’t know why, but the booklet indicates that this is “sustainable travel”. Sadly, it doesn’t look like anything I’ll be sustaining any time soon. If you’re in the market, however, and you inadvertently recycled your booklet, you can get more information at National Geographic Expeditions. But if you’re as unimpressed by their definition of “travel by private jet” as I am, you might want to visit here instead.

So have a wonderful time, take lots of pictures, vaya con dios and don’t forget your yellow fever shot! Proof of inoculation is required.