Free Enterprise Myth?

US Business/Economy –Why is it so strong? Can it survive? An Italian born in London in 1908 arriving in USA in 1938, having taught in the University of Rome here writes for us a good wide ranging article on the economic strength of USA ‘An Economy Born of Democracy’- writing in 1964 when the engine of the US economy is roaring along at race speed- Massimo Saladori telling us that from 1961 to 1964 both GNP Gross National Product and total personal incomes increased about 20 percent. In three years USA was one fifth bigger, more productive, more wealthy- Wow! 6-7% growth rates happen rarely in human history! So it is in this special context that he writes; ‘The high level of production, the continued expansion and the constant change have for a long time been features of the American economy. As a result the entire economic system has undergone deep transformations. The present variety of American free enterprise differs from previous ones and from those existing in other countries. It is sometimes called neo-capitalism, social capitalism or people’s capitalism, but names matter little: what counts are the systems distinctive elements. Considering the numbers of people having a voice in the economic process through their ability to decide such things as what to produce, what to consume or how much to work, the American economic system is the most democratic of any in a major country. Authoritarian tendencies are inherent in all economies in which the public or private capital plays a dominant role. But in the American free enterprise economy these tendencies have been curbed by forces operating within the system and working towards improving it. The improvement has been effected through the diffusion of ownership by means of production and exchange, by wide participation in what economists call the policy making process by emphasizing consumer spending and by the gradual reduction in the range of average incomes of the various sectors of the population’ p70,71 TimeLife I end there with those words before your eyes glaze over- because while the next paragraph adds to understanding But the key point is there in those last words. Currently when I go to work and do an hours work I receive about one hundred times less for my productive hour than does the man in charge of the company- yet in experience wisdom, my input into policy direction, work morale and so on I am perhaps putting in only a tenth of what overall the CEO can contribute in the same hour worked. I am receiving so little from the enterprise that if it goes out of business I will be not sad- but as a loyal servant of God I must work to ensure that our part of the international company is the safest and most productive to be found anywhere in our entire industry. But my father doing much the same job as me in when this was written -1964; He was receiving not less than a tenth of the salary that Jack Newman- organizer of Transport Nelson was getting and the potential for relationship between the two- the working together- both equal aspect of democracy was then fifty years ago much closer. What I am saying here is I entirely agree with everything our economic professor is telling us and –Yes it was a magic time for USA and for all those succeeding in the Free Enterprise System seen both in USA and in my New Zealand at that time. And why was it magic? Well the 1930s depression had smashed the previous economic system undermining the power of the Real American Aristocracy such that anyone could, and they did participate in and have an opportunity to succeed in being part of the economy. My father was developing a photography business as well as being a wage worker doing the same sorts of thing I do and his grandsons has done in the same industry… But the wage inequality! Super wealthy and people working for wages less than those needed to maintain slaves in a proper slave labor system- That couldn’t be seen in USA- But it can be seen now!- Such that vexed articles about the vast inequalities regularly turn up in the newspapers…. What has killed the American system/economy in the past 50 years firstly is a lack of laws and regulation dismantled after they were put there by the 1930s New Dealers. Secondly tax avoidance so that the workers pay for the government but those with the largest amounts of wealth and power do not support the government or manipulate it to their own ends. Thirdly the shifting of manufacturing –in 1964 USA produced 33% of the world’s goods- out of USA and loss of control in that process so that small backyard startup manufacturers cannot succeed and grow. Fourthly the ‘Tithing Debate’ Americans making a religion out of ways to do very little but effectively tax the world to become super powerful and wealthy- Facebook. Google – both take large amounts of money from New Zealand but pay no tax for that! We hate em. And Finally the unwillingness seeing these and other situations develop destructive of USA to take action! Gone!