Reality and Conservatives

Recent news reports have exposed a certain scandal surrounding the Payroll Protection Program that the government rolled out, now that capitalism has crashed here in the United States, at the same time that the failures to prepare for or to contain the coronavirus have engulfed our country. And the scandal concerns the fact that the very people who’ve been specializing over the last 30 years, if not much longer, in attacking the government as an economic burden. In attacking the government as being unnecessary, inadequate, inappropriate, and all the rest, have now been exposed as having rushed to the PPP, this Payroll Protection Program to get money.

Everyone, from the Press Secretary of President Trump on over to well-connected members of his family and of his political cronies. The one I liked most, which others have noticed as well, is the application by the Ain Rand Institute. An institute developed around the personality and work of one of the loudest conservative writers ever to have set foot here in the United States. Declaiming against the government as a burden the Ain Rand Institute got somewhere between one and two million dollars out of this governmental program. I even liked, especially, the president’s Press Secretary who was quoted a year or two ago as having celebrated removing welfare recipients from getting government money on the grounds of the importance of weaning them away from governmental dependence. That’s right! The way you wean them away is not to give them a job, not to give them a decent salary, not to put them in appropriate housing and so on. No no no no no. Take away their benefits.

The same Press Secretary, and she’s one of many conservatives who declaim against the government, rush and fall all over themselves to get the government’s money. But that’s not the scandal part that concerns me, even though there is a certain humor attached to their being exposed this way. It’s sort of like capitalism refuting the conservatives who are trying so desperately to support it and have gone so over the top that the system itself smacks them in the face to say hey, hey take it easy. What do I mean?

The government has been a central support for capitalism throughout its history. Capitalist reality, not the kind of capitalism that exists in the textbooks in economics courses in our colleges nor in the fantasy and minds of conservatives. That kind of capitalism, that doesn’t need the government, doesn’t want the government thinks the government should be minimal if not totally gone. That conservative community has been living in a world other than the one that capitalism, the real capitalism lives in. So I want to take the rest of the short time that I have just to go through a few of the ways in which government has always been central to crucially supporting capitalism.

Let’s start easily. Money. Money makes the world go round more in capitalism than in any other system. Capitalists early on a century two, three ago tried to let the money supply be controlled run as a private enterprise. That didn’t work out real well. Why? Because the people who got their hands on the control of money, mostly bankers, abused their control, as capitalists so often do, so badly, that in the end the society, and even the bankers understood: you couldn’t leave it in private hands. And you know who got the job of controlling the money supply? The government. And everywhere they set up a central bank run by, yup, the government, like here in this country, the Federal Reserve. The government in partnership with the privates – they didn’t want to lose all their influence of course – but they needed the government and so the government controls the money supply and the government has a big influence on shaping what the interest rates are. And we live in a society where everybody’s borrowing. The government, the corporations and individuals. If you control the money supply and you control the interest rates or at least have a major part of the control, then you, that is the government, have a major influence on how the capitalist system works and that has been true for a very long time.

Okay, here’s another example. Banks. They were not the only ones who abused their private capitalist positions to make money at everybody else’s expense. Three other groups of industries did it so badly, that the government came in and controls them, and has for decades. Insurance, the banks themselves and utilities, I’ve talked about the banks, let’s talk about insurance and utilities. Utilities, I mean, electricity, gas, telephone and all of that. The government regulates them. The government tells them how much they can charge, gives them a profit, but limits it. You know why? Because they took advantage of their situation to overcharge everybody. Other capitalists and us, the public, so grossly, that we moved in to demand control. Every one of the 50 states has a Utilities Commission to control. Ditto, ditto on the insurance business. Which ripped us all off until the government was called in. The government controls all of that to a limited extent because private capitalism can’t survive. It produces such contradictions, such anger, such bitterness, such struggle, that the government has to be brought in because the system left to itself blows itself up.

We’re not done. The federal government in this country purchases 750 billion dollars worth of military equipment. It gives those military producers huge contracts at prices virtually guaranteeing their profitability. What a wonderful thing for them! You can make lots of money in the military business. You got one customer and that customer takes good care of you. But to not look at the role of the government in supporting countless industries and countless communities with its purchases is naïve of course. The government is crucial to an economy if it spends 750 billion just on the military. I’m not talking about the hundreds of billions of other money.

Here’s another way the government supports capitalism. When people can’t get work, we have millions of those, the government comes in and gives them various kinds of supports. If you didn’t do that those people would become desperate and there are millions of them. The government does not hire them because that would be competitive with the private sector which is a no-no. The government simply gives them a unemployment check and you better because if they have nothing to lose then well who knows what might happen to capitalism. They’ve learned that lesson, but capitalism needs the support of those people otherwise it becomes unlivable.

Then a few others just, to round out the story. Public education. The government educates the vast majority of people not just the vast majority of k-12, but the vast majority, roughly 75 percent of college students are educated in ,you got it, public colleges and universities run by the government who pays a big portion of the bills necessary for those institutions to work to educate the people so they are much more productive employees of private capitalists than they would otherwise be. Saving the private capitalist employer, the cost of educating and training much of the labor force they employ to direct subsidy to capitalist employers. Isn’t it? Then there’s the roads and the minimum wages. It could go on and on.

One last point. Some conservatives like to say at this point well, well, well, yes, so, okay, but it would be better if it were done privately. No it wouldn’t and that’s why it isn’t. Sure private enterprises can pick at the edges. Let me give you an example. They can offer to run their own schools you know the Betsy Devos kind of craziness, but what they really mean is they want the government to pay. That’s what the charter school movement among religious fundamentalists is all about. They want the government to pay, but they want to teach their particular religion to their particular audiences. That’s what this is about. It’s not a general argument about what the state does or doesn’t do. Because when they set up their little private schools they look for and demand and fight all the way to the supreme court to get the government to pay.

The notion of capitalism without government is a utopian fantasy. It never existed, it has no prospect of existing and is peculiarly weird now, that everybody, including the Ain Rand Institute has their hand out for government to save them to enable them to survive. The next time you hear the conservative notion about small government turn it off, go for a walk, stop listening to nonsense. This is Richard Wolff from Democracy at Work.