The Endgame of Capitalism
The board game Monopoly was originally invented in the early 20th century to warn players of the dangers of free market capitalism. The original title was The Landlord Game, made to show how property owners exploit their tenants with exorbitant rent. The game eventually evolved to include rules that let players charge higher rent if they owned all the railroads or the utility companies.
But the endgame scenario of Monopoly is a lot like the endgame of capitalism that we’re witnessing today—no matter how the game starts, the wealth will eventually accumulate into the hands of one player while the other players have to sell off their property to pay their debt to the owner and eventually lose everything they have.
The Dow recently closed above 14,000, the highest its ever been since October 2007. While the financial pundits on CNBC would use this figure to have us believe the economy is bouncing back better than ever, the only ones sharing in the benefit of a healthy market are the wealthy investor class and corporations that have been insulated from the effects of the recession that still continues for the rest of us. The influx of high-frequency trading that now makes up half of all trading signifies the change of using the market as a vehicle for making long-term investments to manipulating it for short-term profit.
The market’s latest high numbers are due to corporations turning out record profits quarter after quarter, having grown profits by 171 percent under Obama's watch. Most of those profits have come about by companies cutting costs by shifting jobs overseas, where they can pay a Chinese worker a fraction of what they would pay an American worker to do the same job. News has also broken about Fortune 500 companies like Chevron, Bank of America, AT&T and IBM using inmate labor at private prisons, meaning they can slap a “Made in the USA” sticker on a product made by someone working for slave wages.
The influx of immigrants looking for work thanks to free trade agreements like NAFTA has led to the inevitable exploitation of immigrant labor, which will continue as long as U.S. immigration policy punishes the exploited rather than the companies exploiting them. And, these record corporate profits also have right-wing governors and state legislatures to thank for union-busting right-to-work laws—that really only exist as a vehicle for businesses to pay workers less money for the same work and for Republicans to erode a major fundraising base for their opposition.
The rest of the uptick in corporate profits can be attributed to a lax tax code that allows for companies to book profits made in the U.S. in overseas tax havens. There’s an estimated $2.3 trillion in U.S. corporate profits booked in overseas accounts. Apple alone stashes $1 billion a week in overseas accounts to dodge corporate taxes. That’s equivalent to over 4 million full-time minimum-wage jobs, every week. The share of US tax revenue from corporations has gone from 6 percent of GDP in the 1950s to just 1 percent today.
The executives of these companies make out like bandits, as they use their increased profits to buy their own company’s stock, which makes the stock price go up, making the stock options owned by the executives more valuable. And with dividends taxed at a much lower rate than actual work (20 percent vs. 35 percent), the tax revenue needed to keep society functioning continues to dwindle as the investor class accumulates greater wealth than ever before. The 6 Waltons who own WalMart own as much wealth 40 percent of Americans.
Some financial analysts say this market surge is just a rally, destined to drop as Congress expects to wrangle with the deficit in May, including a possible downgrade of our credit rating. But the fact is, our deficit would disappear if we had a small sales tax on all Wall Street financial transactions, taxed capital gains at the same rate as by-God hard work and overhauled our tax code in favor of one that would do away with the loopholes that allow big corporations to offshore their billions in American profits. However, even that could get worse, as Obama has shown willingness to talk about a territorial tax code that would effectively allow corporations to pay a zero-percent tax rate on their profits all over the world, including the U.S.
In a recent Daily Show appearance, Al Gore made a half-hearted attempt at explaining the idea of “sustainable capitalism” to Jon Stewart. But, even Gore’s description of capitalism as the only economic system that works, sounded incredibly outdated to those of us who weren’t millionaire media moguls or TV personalities. We’re witnessing the endgame of capitalism, where a few wealthy individuals and corporations have accumulated most of the wealth while the rest of us are left to fight for the scraps.
And it looks a lot like the endgame of Monopoly, where every player is selling off their house and foreclosing their property to pay the one player who already has everything. And when the Monopoly game has gone that far, the only thing left to do is flip the board over, scatter all of the winner’s winnings and try playing something else that everyone can enjoy.