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,
Nights: Performing, Producing and Writing in Gotham
New Yorker at Sea. His latest book, Tales
of a Hamptons Sailor, is now available. For Nick's
reviews, visit his website: www.nickcatalano.net
Behind every great fortune
stands the brooding presence
of a great crime.
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?
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.’
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
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
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.
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.
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.
worse, the need to successfully compete aggrandized human greed
and selfishness and increased fraudulent methods and malevolent
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.
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.
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.
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
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.
the evils of capitalism remain.
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.
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.
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.
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.