wannabe PJ O’Rourke blog
Let me try and explain the ideas of free markets and capitalism as best I can given my breathtaking lack of knowledge about both free markets and capitalism. From what I gathered from the economic courses I took online people decided on using currency as a way to move from bartering to a more efficient way of determining value. Plus, carrying chickens around to buy things got a little old. The free market is nothing more than whatever government happens to be in power at the time stepping aside and letting people figure out for themselves what things are worth.
With me so far? Of course you are, this is pretty simple stuff.
As groups turned into towns and towns turned into cities society seemed pretty happy with people who worked hard flourishing and lazy people not so much. This was all controlled by an invisible hand that guided people to buy things that they felt they wanted at a price that they thought was fair. If you were unhappy with any part of the transaction, from the quality of the muffins to the attitude of the girl who sold them to you, you would simply find another muffin shop. It motivated the owner of said muffin shop to work hard to provide both quality muffins and courteous service.
While this was not a perfect system it allowed the flow of goods and services to turn chickens into muffins and thereby ownership of a successful muffin shop into a 2-story hut and a new horse.
Capitalism kicked ass and people as a whole were better off.
Then something terrible happened.
Things got big.
Here’s the part that is frustrating to a fan of capitalism and free markets. Corporations came along and suddenly because things were so big the people who ran these corporations stopped caring if the muffins were delicious and cared even less if the people who served those muffins were polite and efficient at their jobs. What they cared about was their salary and their stock options and their severance packages.
See the problem now?
The model works when owners of businesses are attached to the success or failure of the venture. Once that concern is removed you have the beginning of the end. Eventually even the low expectations of the weary consumer are not met and they look at the million dollar bonus of the CEO at Muffinco and they start to get angry and then they start to sit out front of Muffinco and beat bongos and stop showering and nobody ends up happy. Least of all the poor bastards who not only have to eat a shitty overpriced muffin served by a disgruntled teen but they also have to walk by a bunch of smelly protestors holding up rude signs while they do it.
It’s like government. Being a senator or congressman was never supposed to be a career, it was supposed to be public service. Like jury duty. But then it got big and suddenly nobody was passing any laws about what can and can’t be included in the muffins.
Which in turn left people fuzzy about muffins in general and thus was born the economic equivalent of cancer: lawyers.
When you look at the effect of lawyers on society you can’t help but feel that I’ve injured the reputation of cancers everywhere by making the comparison.
So, to review. I want a muffin. I raise chickens. Division of labor and whatnot. Through a process of trial and error we hammer out a currency that allows me to get a fair price for my chickens, with the understanding that they are quality chickens, so I might in turn purchase a muffin. If I don’t like that muffin I choose another muffin vendor in the future and if the old muffin vendor has the same issues with all of their other clients they must stop making muffins and either starve to death or find another trade.
That’s the way it is supposed to work. But that’s not how it is anymore so it makes it hard to defend capitalism these days. The people who run companies, be it chickens or muffins, don’t give a crap about either chicken or muffins. Or the consumers. Or their employees. They are no longer involved in the actual process. They sit in a leather chair and play golf and then get fired after 2 years of slow sales of the new ‘chicken-flavored muffin’ they dreamt up while on a mescaline binge in the Philippines and then receive a $10 million golden parachute.
How can we fix it?
Here’s a start. First we have to track how the inventor of the chicken-muffin got paid relative to the last CEO. You’ll find that back when corporations first reared their ugly head the man at the top typically made about 10 times what the average worker was paid. Every decade since that number has climbed.
And climbed. Upwards of 200 these days.
If you look at only the last 20 years you’ll see the crazy rise in CEO pay relative to the average worker at the company. If you look at these numbers long enough you’ll realize that sitting out front of their building wearing sandals and yelling things into a bullhorn is completely inappropriate and you’ll instead grab something sharp and start stabbing these people to death.
Am I encouraging violence towards what we now affectionately call the 1%ers? No. But I’m saying I’d understand it.
You see it’s no longer capitalism. It’s smart people getting what they can from the masses before they catch on.
Here’s the fix (other than implementing the aforementioned grabbing sharp things strategy which I am rapidly warming up to); change the rules in response to the new realities. Put a cap on the amount any CEO of a publicly traded company makes. This cap would be 20 times what the average employee makes. It’s simple. If they want to earn more money than they have to pay their employees more… and to do that they need to be successful. They will be invested.
Just like the old muffin makers use to be. Don’t sell enough muffins for whatever reason you lose the big house and the car. Or in this case, they lose the 2nd ocean-going yacht and the trips to the Philippines.
Not only would you see the rebirth of the middle class but you’d also see the end of impotent yet somehow smug protesters cluttering up the streets chanting and smelling up the place.
While we’re dreaming here, why not pass term limits for elected officials and strict limits on the amount of cash they earn? And while we’re at it let’s disbar any lawyer that knowingly says something that is later proven untrue.
Ok, I have to calm down. Saying these types of things out loud just depresses me.
Capitalism was never supposed to become this and yet you could make the case it was inevitable given what greedy soulless fucks humans are. I really have zero hope for politicians and lawyers but I still have some faith in the businessman. Call me naive but I believe that some of them remember the old days of bartering chickens for muffins. Somewhere in their DNA they know it works and there is something powerful about striving towards the greater good. Even salesmen have consciences.