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Vol. 15, No. 6, 2016
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Robert J. Lewis
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Nick Catalano
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Nick Catalano is a TV writer/producer and Professor of Literature and Music at Pace University. He reviews books and music for several journals and is the author of Clifford Brown: The Life and Art of the Legendary Jazz Trumpeter, New York Nights: Performing, Producing and Writing in Gotham and A New Yorker at Sea. His latest book, Tales of a Hamptons Sailor, is now available. For Nick's reviews, visit his website:

Behind every great fortune
stands the brooding presence
of a great crime.
Lewis Lapham

During the recent political turmoil the notion of deregulation of large corporations and banks became a hue and cry. In the past few decades, starting with the Reagan administration in 1980, significant stripping of regulations became de rigeur. As a result, well- publicized scandals (Enron, Volkswagen, FIFA, Toshiba, World.Com, and Wells Fargo) became examples of what can happen when corporate executives run wild and commit fraud. In the financial world -- Bear Stearns, Lehman Brothers -- who can deny that the greedy sub-prime mortgage policies of these bankers were instigators of the great recession?

If you wish to discover the early stirrings of ‘private enterprise’ abuse you can go back to 1494 when, due to insider profligate fraud, the famed Medici bank in Florence Italy became insolvent. But despite this early exploitation of power a similar engine for economic growth appeared and became conceptualized when Adam Smith wrote The Wealth of Nations in 1776. Initial phrases for the new engine varied but eventually morphed into the term ‘capitalism.’

The system was heralded as a spectacular advance in a nation's ability to harness the forces of mass production and thereby produce goods and services for what soon became a rising middle class. Tantalizingly, prosperity for all levels of society seemed to be within everyone's reach and rapidly the juggernaut of the Industrial Revolution began to roll. Indeed, nations such as Great Britain, Germany, Belgium, France and the fledgling United States saw economies soaring to heights unimagined just a few decades before.

But by the middle of the 19th century cracks in the system began to appear. Control of the new ‘corporations’ lay in the hands of only a few ‘capitalists’ and many of them amassed greedy fortunes which propelled unchecked power over society. In what was to become a harbinger of things to come, by 1900 the richest one percent of the population in Britain and France owned more than fifty percent of those nations’ wealth and the top ten percent owned ninety percent. In the United States today the top ten percent of the population owns seventy-two percent of the wealth, and the bottom fifty percent has two percent. And about ten percent of the national income goes to the top 247,000 adults which is one-thousandth of the adult population.

The greatest abuses of early capitalism were inflicted upon lowly workers and child labourers whose miserable fate was recorded in Dickensian novels. Intellectuals were aroused and in 1867 Karl Marx spoke out loudly against the capitalistic ruling class when he published Das Kapital.

MarxMarx got a Ph.D at the Friedrich-Wilhelms-Universitat where Hegel once taught and became associated with a group of intellectuals known as the Young Hegelians. Hegel taught that human society was entrapped by a world of illusions that it had itself created. Humans created God because God solved certain problems -- religion provided moral frameworks for living together i.e. the Ten Commandments. But religions began to control society in negative ways; they became powerful tools which abused people and halted human evolution toward greater self-mastery. Hegel argued that we must “transcend” our created illusions when they harm us. Hegel

Marx applied Hegelian transcendence to economics. Capitalism was also invented to solve certain problems by increasing economic output. But the system of capitalism had flaws. Its essence involves competition commandeered by employers who exploit workers because this increases profits and gives them a competitive edge. Even though some employers may want to humanize working conditions they must nevertheless compete because that is how the capitalistic system works. Thus we created an illusion of economic perfection but we are eventually controlled by our illusion -- we created a system for our own purposes that is now controlling us.

Even worse, the need to successfully compete aggrandized human greed and selfishness and increased fraudulent methods and malevolent manipulation.

Although Marx conceded that capitalism, for all its evils, did create abundance, he made dire predictions which we are now witnessing first-hand. He forecast that the income gap between workers and owners would increase. He predicted that small independent producers would be gobbled up by the large corporations. He also predicted that wages would remain at subsistence levels. This latter prediction has led to huge dissatisfaction among workers in the United States and is certainly one of the reasons that voters rebelled in the recent presidential election.

Athough Marx appropriately addressed the principal evil of capitalism -- the exploitation of workers -- he couldn’t solve the problem of how an economic system that succeeded in providing abundance could operate without employer-capitalists manning the controls. But he certainly provided the earliest insight into the evils of the system. Some societies like Holland have succeeded in addressing these evils and implementing measures to minimize the social damage.

Unfortunately, the idealistic urgings of Marxian thought were crushed when a group of power hungry revolutionaries waving a Marxian banner instituted a totalitarian communist government in Russia. By mid-20th century Marxism became an evil concept even though it was the only ideology that challenged capitalistic power. In the West, Marxism became inextricably tied to fears of Soviet expansionism and in many people’s minds Marxism and Communism became synonymous terms. Marx’s correct analysis of the evils of capitalism were virtually ignored. If you were a Marxist you were marked as a person who wanted to overthrow the government, not someone who questioned the inherent problems of capitalism. The term aroused suspicion and fear in the minds of most westerners. Opposition to Marxism fueled the strategies of national and military leaders in the west who used the term to support armament increases and cold war opposition to the Soviet Union.

A nation which tried to correct social injustice by applying Marxian principles instantly became a ‘communist’ political enemy. Thus China, who avoided the territorial imperialism of Soviet Russia nevertheless became a feared foe. As soon as Cuba was recognized as a Marxist-Communist state it instantly became an enemy of the U.S. which quickly isolated the island with an embargo (which still stands despite the enlightenment of the Obama administration) and certainly helped to insure economic doom.

After collapses of Marxian inspired governments in Cuba and Chile and the fall of Communist Russia the term Marxism sank into derisive obscurity. The ideology, together with some of its meritorious tenets, has all but disappeared.

But the evils of capitalism remain.

In an attempt to salvage some of the prescience of Marx’s predictions Mikhail Gorbachev, a remarkable statesman who has also been practically forgotten, stated that if world economies wanted to insure a measure of prosperity and also care for poorer citizens they would have to construct societies which somehow combined the features of socialism and capitalism. Even he chose to omit the Marx’s name in an effort to lend credibility to his enlightened thinking.

Where are we now, ideologically? There is no orthodoxy for those who suffer from the evils of capitalism. There is only the pragmatic effort to halt its excesses by some liberal” governments who hearken to the primal warnings initially uttered by Marx.

Every day in the business section of newspapers you can read about the latest instance of insider trading on Wall street. Every day you can read about top executives who have earned in excess of one billion dollars in just the past year. Every day you can read about corporations who are under investigation for outrageous fraud. During the past eight years the Obama administration has at least tried to stem the tide of these evils. The Justice department, the Attorney General’s agencies, the Security and Exchange Commission, the Banking Commission, and other organizations under the President’s executive branch have continually striven to prosecute fraud. They have had only limited success.

But the cry of “deregulation” has once again come to the fore and politicians who oppose corporate abuses have slunk into the shadows. The cries of the few i.e. Bernie Sanders, have been drowned out and newly elected captains of capitalism are salivating at the prospect of new legislation permitting them to acquire more wealth than ever before.



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Joseph M. Pastore, Jr.; Professor Emeritus, Pace University
Not only a beautifully articulated and historically reflective piece plotting the ever present and important societal balance between the need to do both "well" and "good", but one written by someone, Nick Catalano, who has offered his professional associates, his students,his colleagues, and his family an exemplary example of how both individuals and organizations can, and should, marry pragmatics with principles, professions with humanities.  A good society is one that has learned to balance economic performance, legal compliance, moral equilibrium, and philanthropy in that order and though a community of balanced contributions among for-profit and non-profit organizations.  It will happen only through credible and exemplary leadership at national and global levels, factors that history has shown will wax and wane given changing times and parties. The vital and yet to be answered question is whether, given changing national leadership and the reality of economic cycles,the U.S. is approaching a return to the moral and economic shortfalls we witnessed circa '90 with the Savings and Loan failure; circa 2000 with the accounting shortfalls (World-Com, Enron..); and circa 2008 with the sub-prime mortgage and financial sector debacle. The even greater concern at this point in history appears to be the extent to which yet to be tested and known moral leadership changes in the United States will help or compound the sad state of affairs emerging from Euro changes in Europe and serious conflict in the Middle East spilling into Europe. Add the continuing and rapidly changing "Information Age" evolution begun after WW II and we are likely poised to greet a world never seen before, but hopefully one for which we have sufficient human capital and moral to "do the right thing for all". 
A brilliant compilation of history!  I thoroughly enjoyed Dr. Catalano's analysis of deregulated capitalism.

By Nick Catalano:
Demagogues: The Rhetoric of Barbarism
The Guns of August
Miles Ahead and Born to Be Blue
Manon Lescaut @The Met
An American in Paris
What We Don't Know about Eastern Culture
Black Earth (book review)
Cuban Jazz
HD Opera - Game Changer
Film Treatment of Stolen Art
Stains and Blemishes in Democracy
Intersteller (film review)
Shakespeare, Shelley & Woody Allen
Mystery and Human Sacrifice at the Parthenon
Carol Fredette (Jazz)
Amsterdam (book review)
Vermeer Nation
The Case for Da Vinci's Demons


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