Every election cycle, we get bombarded by the media about candidates who proclaim that they have our interest front and center and will fight for the middle class. The media fills its 24/7 news cycle with, “Breaking News” about the candidates’ promises, which supposedly will usher in their version of the “New, Improved Democracy”; the Republicans promising a smaller government and no new taxes, while Democrats promising to raise the quality of life by introducing programs to bring equality. It is in the election cycles that we become acutely aware of our wealth disparity, social inequities and discrimination in jobs, education, wages, and human rights than at any other time.
Eventually, we vote and elect the men and women representing the choice of the majority. We count on our representatives in Congress and Senate to take up our causes and move the needle on legislations that will put us in the front and center; but not much happens. Very little changes as the opposition digs heels in and before long it is time for congressional recess and the agenda gets pushed back. We wait, and wait and wait for things to improve but nothing changes.
Is Democracy a Shell Game?
Why do we go through this charade every four years? We do so because we hope that our beliefs in Democracy, as an ideal system and in the free market as the economic system, is sustainable. We expect that our elected leaders will move our agenda for a better future. We hope that our voices will be heard and our causes will be discussed and finally we will bridge the ideological divide that is currently teetering our Democracy on a precipice.
The reality is that at present, all the precepts of American Democracy; our equality, our freedom of speech, our privacy and the rights of ownership are being eroded on a daily basis due to public policy decisions that do not favor us, the average citizens of America. Our public policies are skewed in favor of powerful industrialists, their associations and the owners of powerful technologies who have disrupted our markets by their undue influence on our rule makers and our state representatives. Their money and market power is used as tools to manipulate our marketplace in their favor. The idea of “Free Markets” seems more like a shell game rather than reality.
Just look around:
- A core idea of capitalism was individual property ownership for average American. At least for now, home ownership has become a distant dream for many. Home ownership is in a decline because prices are now in stratosphere, while salary and wages for most Americans grew at very slow pace even as the American productivity is at all-time high. According to an article in Bloomberg.com, the rate of American home ownership has been the lowest since 1965, currently at 62.9%, based on the Government’s housing survey published in the 1Q 2016. (Bloomberg.com/news/article/2016-07-28/home ownership-rate-in-the-u-s-tumbles-to-the-lowest-since-1965). The home prices are presently so high that ownership has become unaffordable for average Americans, especially for those who are starting out in life. Our students already shoulder crushing burden of loans that would take half a lifetime to repay, because advanced education to stay competitive is prohibitively expensive in relation to the resources of average American family. Many millennials are living with parents or partners or renting.
- New family formations are also declining. Young Americans are delaying marriage and postponing starting families due to the heavy load of student loans, pitted against availability of fewer jobs in the U.S.A. Robotics, Artificial Intelligence and outsourcing are resulting in jobs being taken away. Changes in the bankruptcy for individuals is making declaration of bankruptcy more difficult, even as debts pile up due to removal of cap on how much the lending institutions can charge.
- Our safety nets are being yanked away too. A large number of U.S. employers no longer offer pensions or retirement benefits. Add to this, the fact that pension fund have been allowed to invest in risky investments that have washed away the rainy day nest eggs. For many middle class Americans retirees, their pension and social security are all they can count on as Income.
Our sick citizens, elderly and poor people are dying because the cost of medicine has become unaffordable. It is ironic that American research and development in Pharmaceutical yields new and effective drugs but average Americans cannot afford them because of the pricing policies allowed by our Federal Trade Commission. We have been priced out of our own market because the protectionist policies in place are making it impossible to import drugs from other countries. Extensions of copyright, to even with marginal tweaks to the original drugs, are resulting in preventing introduction of generic drugs. This is making it impossible to cure average Americans faced with catastrophic illness because they simply cannot afford even co-pays for drugs to cover the cost on insurer’s formulary. - Our medical bankruptcies are pulling safety net from under many senior citizens when they are no longer employable. Any catastrophic illness or serious accident can wipe out a lifetime of earnings and the recent amendments to bankruptcy laws have made it difficult for individuals to file for bankruptcy.
- Now we are facing a point in future, where even our employer can invade our privacy by requiring us to take genetic testing and mandating participating in the program or face heavy penalty.
- Under a recently proposed Healthcare law, every citizen will be required to have health insurance and they would have to pay heavy surcharge for 12 months, if they lapse for more than a certain number of days.
So, if you are like me, you are wondering, whatever happened to the ‘free market’, which was supposed to offer us choice and affordability and protect us from the unethical, greedy snake-oil sellers that remind us of the wild-West era? And why is this being allowed to happen?
After all, we do have the rules and laws, which in principle say that we have a right to own property, we have a right to fair and affordable transactions and protection from price gauging. We have the agencies that are supposed to ensure that we have enough choices in goods and services to allow us to pursue “happiness”. Our constitution says so! We have embraced the capitalist system, because it promises economic stability through proper enforcement and judicious pronouncement to ensure that no one business dominates the market, so as to use coercion in the market place through high prices or hoarding supplies.
Redefined Democracy in 2016
It seems that our Democracy is no longer the “Government of the people, for the people, by the people” in the common sense that define “people” as humans. It is now serving “people” as reinterpreted by the Supreme Court in 1868. It treated inanimate corporations as people and bestowed all the same rights as living, breathing humans! Initially, offering it protection for equal treatment under the state tax laws but since then, has expanded the protection to include freedom of speech, protection from unlawful search without warrant, right to spend money on state ballot initiatives, and now, as recently 2010, removed caps on contribution to spend as much as they wish, in supporting candidates in elections at the Federal, State and local level. This has created an imbalance of power between the legal entity personhood of corporations and the natural living breathing humans- the citizens of America, in influencing and shaping the public policies in their favor.
In addition, corporations could exercise religious freedoms, pertaining to healthcare benefit (such as not paying for contraceptives or abortions etc. and allowed businesses to refuse serving customers if they violated their religious belief, like marriages between people of the same sex.
Just as the Supreme Court has redefined the concept of who the “people” are, it appears that our judicial system is also redefining what a free market is and will be in the future. The recent decisions by FTC, in approving of merger between CVS and Aetna, large hospitals buying other reginal and local hospitals, and the large bank buying out local and regional banks, indicates that FTC is no longer averse to the idea of bigness or its anti-competition potential. In many important sectors that affect the quality of life and living standards, there is a real possibility that oligopoly will be ushered in. So, while technically adhering to an anti-monopoly stance, FTC is still overlooking the threat of price-fixing or market manipulation through supply control (as evidenced by the recent pharmaceutical supply shortages).
Even as Internet is decentralizing function across the geographic boundaries, it is centralizing power in the hands of the few. Partly because converting to digital technology requires huge investments upfront, which can necessitate mergers and acquisitions to benefit from the size that offers cost-saving and efficiencies through synergies and consolidations. However, it is doubtful that those would result in affordability and choice for consumers.
And from my lens, we the people, as defined in the original constitution, are no longer at the center of the market, rather, it is the redefined identity “people”, i.e. corporations, who will be the main beneficiaries of the capitalism. Unless, something miraculous happens, we appear to be heading toward plutocracy.
Future of the Free Market
However, there is a counter movement afoot in the form of shared economy, which is challenging the precepts of ownership, and other sacred cows like centralization of manufacturing or services, trade secrecy and patents. This is being driven by cyber technologies and gaining a momentum all its own. Essentially, it is a rebellion against the establishment by disrupting the status quo.
Digital economy is redefining the concepts inherent in the capitalist system with concepts of shared economy, transparency, Internet based distribution in place of retail brick and mortar, Internet based education, Internet based banking and other essential services. It is offering a lot more convenience and choice to consumers, but at a steep societal price! We are paying it in terms of agreeing to surveillance, and
a lack of security that is inherent in Privacy, which is an important component of the traditional Democracy.
However, do not expect the established old idea of Capitalism to be discarded easily in favor of the new ‘shared’ economy. Oligarchs have the money to squash initiatives and maintain the status quo by legislating rules that will favor them by funding campaigns directly and indirectly to the lawmakers.
So what can we do as consumers and citizens?
We have only two choices;
- Remain apathetic and succumb to whatever form the government takes, whether plutocracy or dictatorship and give up the five freedoms we take for granted.
- Become active in understanding how our Democracy works and let our voices be heard loud and clear, through our well-educated votes at the local, state and federal election events.