Slavery and Capitalism

Slavery and capitalism. The twin pillars of American history. This pairing forces us to question exactly what we mean by capitalism.

Many argue that the South was originally pre-capitalist or at least had strong pre-capitalist traditions (see my post about the book The Mind of the Master Class). It is true that there were clear economic differences that led to regional conflicts. Also, it is true that pre-capitalist practices such as subsistence farming and bartering held out longer in many communities in the rural South. But all of this was contained in a larger capitalist system that dominated Anglo-American culture since the colonial era of the British Empire.

Here is something I wrote getting at some of this conflict within the US economy (Sin of the North, sin of the South):

The South had two agricultural traditions. They had the slave-based plantation model that came from Barbados and they had the yeoman subsistence model that came from the Scots-Irish. Both the plantation tobacco farming and the subsistence slash-and-burn ended up depleting the soil which wasn’t as rich to begin with.

This relates to an economic difference. Plantation farming and subsistence farming helped create an economy in the South that was less like modern capitalism. The plantation owners were so vastly wealthy that they didn’t build their own local industry, choosing instead to buy products shipped in from elsewhere. As an aside, the wealth of plantation owners wasn’t capitalist wealth (i.e., wasn’t fungible capital) because plantation owners tended to be heavily in debt as their wealth was invested in their land and their slaves. The subsistence farmers never harvested enough crops to make much in the way of profit, fungible or otherwise; and, as Joe Bageant points out, many of the small Southern farming communities were mostly cashless societies where people bartered and kept store tabs.

Modern industrialized capitalism was only strongly established in the South with Reconstruction following the Civil War. In being introduced, capitalism built upon the framework of the economic system already established in the South. This meant that capitalism incorporated the plantation mentality and the class-based rigidity. There were high rates of poverty and economic inequality in the Antebellum South and there are still high rates of poverty and economic inequality in the South today.

In one sense, you can blame the North for forcing modern industrialized capitalism onto the South. It’s possible that, if the South had successfully seceded, Southerners might have transitioned into a better kind of economic system… then again, maybe not. It’s not like capitalism wasn’t already beginning to gain footholds in the South prior to Reconstruction. It would be surprising if a Confederate South could have avoided capitalism’s ascent. Anyway, it wasn’t the North that forced onto the South a poverty-based, union-busting form of capitalism.

I just came across another book on this topic, The Half Has Never Been Told: Slavery and the Making of American Capitalism by Edward E. Baptist. This author is making a stronger argument for the connection between slavery and capitalism. I’ve barely begun to read it, but I thought I’d present a passage from it that summarizes the case being made.

The following passage is from the introduction (Kindle Locations 173-220). It puts slavery not just in the context of classical liberal economics but also in the context of liberal society in general. It implicates liberalism, in the broad sense. Maybe this view would fit into Domenico Losurdo’s harsh criticism, Liberalism: A Counter-History. Of course, this ‘liberalism’ is pretty much a category including all post-Enlightenment ideologies, including American conservatism. It is liberalism as a pervasive social order, not a mere partisan ideology limited to a particular group.

Baptist questions about the true nature of freedom in a society with a long history of unfreedom. When we speak of free markets, what kind of freedom are we speaking of and whose freedom is it?

* * * *

The way that Americans remember slavery has changed dramatically since then. In tandem with widespread desegregation of public spaces and the assertion of black cultural power in the years between World War II and the 1990s came a new understanding of the experience of slavery. No longer did academic historians describe slavery as a school in which patient masters and mistresses trained irresponsible savages for futures of perpetual servitude. Slavery’s denial of rights now prefigured Jim Crow, while enslaved people’s resistance predicted the collective self-assertion that developed into first the civil rights movement and later, Black Power.

But perhaps the changes were not so great as they seemed on the surface. The focus on showing African Americans as assertive rebels, for instance, implied an uncomfortable corollary. If one should be impressed by those who rebelled, because they resisted, one should not be proud of those who did not. And there were very few rebellions in the history of slavery in the United States. Some scholars tried to backfill against this quandary by arguing that all African Americans together created a culture of resistance, especially in slave quarters and other spaces outside of white observation. Yet the insistence that assertive resistance undermined enslavers’ power, and a focus on the development of an independent black culture, led some to believe that enslaved people actually managed to prevent whites from successfully exploiting their labor. This idea, in turn, created a quasi-symmetry with post– Civil War plantation memoirs that portrayed gentle masters, who maintained slavery as a nonprofit endeavor aimed at civilizing Africans.

Thus, even after historians of the civil rights, Black Power, and multicultural eras rewrote segregationists ’ stories about gentlemen and belles and grateful darkies, historians were still telling the half that has ever been told. For some fundamental assumptions about the history of slavery and the history of the United States remain strangely unchanged. The first major assumption is that, as an economic system— a way of producing and trading commodities— American slavery was fundamentally different from the rest of the modern economy and separate from it. Stories about industrialization emphasize white immigrants and clever inventors, but they leave out cotton fields and slave labor. This perspective implies not only that slavery didn’t change, but that slavery and enslaved African Americans had little long-term influence on the rise of the United States during the nineteenth century, a period in which the nation went from being a minor European trading partner to becoming the world’s largest economy— one of the central stories of American history.

The second major assumption is that slavery in the United States was fundamentally in contradiction with the political and economic systems of the liberal republic, and that inevitably that contradiction would be resolved in favor of the free-labor North. Sooner or later, slavery would have ended by the operation of historical forces; thus, slavery is a story without suspense. And a story with a predetermined outcome isn’t a story at all.

Third, the worst thing about slavery as an experience, one is told, was that it denied enslaved African Americans the liberal rights and liberal subjectivity of modern citizens. It did those things as a matter of course, and as injustice, that denial ranks with the greatest in modern history. But slavery also killed people, in large numbers. From those who survived , it stole everything. Yet the massive and cruel engineering required to rip a million people from their homes, brutally drive them to new, disease-ridden places, and make them live in terror and hunger as they continually built and rebuilt a commodity-generating empire— this vanished in the story of a slavery that was supposedly focused primarily not on producing profit but on maintaining its status as a quasi-feudal elite, or producing modern ideas about race in order to maintain white unity and elite power. And once the violence of slavery was minimized, another voice could whisper, saying that African Americans, both before and after emancipation, were denied the rights of citizens because they would not fight for them.

All these assumptions lead to still more implications, ones that shape attitudes, identities, and debates about policy. If slavery was outside of US history, for instance—if indeed it was a drag and not a rocket booster to American economic growth —then slavery was not implicated in US growth, success, power, and wealth. Therefore none of the massive quantities of wealth and treasure piled by that economic growth is owed to African Americans. Ideas about slavery’s history determine the ways in which Americans hope to resolve the long contradiction between the claims of the United States to be a nation of freedom and opportunity , on the one hand, and, on the other, the unfreedom, the unequal treatment, and the opportunity denied that for most of American history have been the reality faced by people of African descent. Surely, if the worst thing about slavery was that it denied African Americans the liberal rights of the citizen, one must merely offer them the title of citizen— even elect one of them president— to make amends. Then the issue will be put to rest forever.

Slavery’s story gets told in ways that reinforce all these assumptions. Textbooks segregate twenty-five decades of enslavement into one chapter, painting a static picture. Millions of people each year visit plantation homes where guides blather on about furniture and silverware. As sites, such homes hide the real purpose of these places, which was to make African Americans toil under the hot sun for the profit of the rest of the world. All this is the “symbolic annihilation” of enslaved people, as two scholars of those weird places put it. 2 Meanwhile, at other points we tell slavery’s story by heaping praise on those who escaped it through flight or death in rebellion, leaving the listener to wonder if those who didn’t flee or die somehow “accepted” slavery. And everyone who teaches about slavery knows a little dirty secret that reveals historians’ collective failure: many African-American students struggle with a sense of shame that most of their ancestors could not escape the suffering they experienced.

25 thoughts on “Slavery and Capitalism

    • I just finished listening to both of them. The second interview was nice. It got me thinking about indigenous forms of slavery in Europe, which was part of the discussion.

      I know the Vikings enslaved people wherever they went. They enslaved their fellow “Europeans” and didn’t think of it as enslaving their own kind. So, all the way up in the far European North the primitive tribal people were enslaving their conquered enemies just like in other places. Even feudalism was essentially a form of slavery where the peasants were enslaved to the land and to those who owned the land, a package deal.

      How did native European slavery and other systems of subjugation/oppression set the groundwork for the later racialized Atlantic slave trade? What were the direct influences that allowed Europeans to imagine a racialized slavery?

      In the interview, the first sign of racialized slavery came from a British company that had “African” in their name. That was one of the earliest examples of all of Africa being referred to as a singular place.

      At that time, the internal slave trade in Africa was considered something between different people, not between Africans. As the author noted, the Senegalese (?) and the Portuguese had more in common because of the Arab and Islamic influence.

      There was no Europe and no Africa. The various Mediterranean and Atlantic people had more common culture with one another than they had with the respective people living in the distant interior of their respective continents (or on the opposite shores of their continents). Most long-distance travel happened by water. It was water trade routes that connected early civilizations, empires, and trading societies.

      This is what made the Mediterranean such a powerful focus in the rise of civilization. Greeks and Romans were Mediterranean, not European. They were Mediterranean in the way North Africans and and Near Easterners in the Levant were Mediterranean.

      But what was the change that happened in the Atlantic? Maybe the Atlantic allowed for trade routes of even greater people. The Mediterranean people had been in contact for millennia and so they had developed together. The Atlantic people hadn’t developed together and their relationships were less well established and with less common culture holding them together.

      This is the roots of capitalism where trade itself trumps all else. There is an othering process that evolved in tandem with capitalism. I’m not sure if that is exactly correct, but there is some important difference there.

  1. At it’s heart, the problem is that the White Conservative movement has never truly accepted the idea that Blacks should be treated as equals. Similar thoughts about Hispanics.

    Superiority to them has always been about being WASP and being American. To that end, others are looked down upon. Vote suppression, the lynchings in the early 20th century, the War on Drugs, and similar actions are all extensions of this.

    You know, I have a friend of mine who used to work in the UK tourist office and he noted that a lot of the US tourists tended to be very unpleasant. A lot would say things along the lines of, “you owe us for WWII and we beat the Germans alone”. That is certainly not true – such people often have to be told that ~80% of the Wehrmacht was destroyed by the Soviet Union (and they often don’t believe that the USSR was in the war in the first place), but you get the idea. There were many very pleasant people he says too. In his view, the reason why Americans get a bad reputation as tourists is because the percentage of pleasant to distasteful tourists is probably the least favorable for the US.

    But going back to the idea of White superiority – that is the fundamental problem, they have never really accepted the idea that Blacks should vote, should be given equal rights, etc.

    • Yeah, that is fairly standard. I’ve seen that before with some other country. The less Americans know about a place the more they support violent military intervention.

      Being a citizen of the most powerful country in the world does encourage a certain kind of ignorant belligerence among many people. Nationalism in general does that, even for countries that aren’t powerful.

      Part of the reason I care so much about knowledge is because of this, There is a connection between knowledge and empathy. Along with the connection between anti-intellectualism and cruelty.

  2. In many ways progressivism is a movement that developed in response to capitalism in the late 19th and early 20th centuries, one that experienced wage slavery, appalling safety conditions, etc.

    Up until relatively recently, I don’t think the South truly experienced capitalism, save in perhaps a few of the large cities. You do see stronger progressive support in the cities in the South for that reason compared to the rural areas.

    The South was largely shielded I think from the worst of capitalism, and that left a decidedly positive view of the realities. The bitterness of the American Civil War, the Reconstruction, combined with the anti-Communist movement of the 20th century made that a reality. I think the Left is demonized in the South for that reason – they never really came into contact with the realities of what industrialization had brought with it, nor why Progressivism came about.

    Things are changing now. The South is mostly used today for its cheap labor more than anything else. Many of those jobs are outsourced first to the South, then to the developing world. In short, it is being exploited against the rest of America.

    Remember this map:

    Mortality rates for women. There’s the results.

    The transition also has other consequences, like the average family losing the independence that owing their own farm, growing their own food may have once had. They’ve been exploited ruthlessly by the capitalist class.

    Same with the ones that stay. I mean farmers today – they cannot feed themselves at times. Monsanto and a few companies own the seeds, have patents, and will sue. It’s scary if you think about it.

    • “Up until relatively recently, I don’t think the South truly experienced capitalism, save in perhaps a few of the large cities. You do see stronger progressive support in the cities in the South for that reason compared to the rural areas.”

      I find myself reluctant to generalize about the Southern economy. Like the rest of the country, most Southerners were increasingly moving to the big cities. It wasn’t just just industrialization that was in the big cities, but also multiculturalism, especially certain big cities like Columbia SC.

      “The South was largely shielded I think from the worst of capitalism, and that left a decidedly positive view of the realities. The bitterness of the American Civil War, the Reconstruction, combined with the anti-Communist movement of the 20th century made that a reality. I think the Left is demonized in the South for that reason – they never really came into contact with the realities of what industrialization had brought with it, nor why Progressivism came about.”

      It depends on which parts of the South you are speaking of. There were, like in the Midwest, rural farming communities that were rleativley protected from the worst impacts of a changing economy, as Joe Bageant describes of the community he grew up in. However, besides the big cities, modern capitalism and industrialization did have a wide impact, although it came more slowly in some places. From Appalachia to the Ozarks coal mining brought a close and personal experience of modernity to large numbers of rural Southerners.

      Populism was in a response to the changes in society. Average Americans organized across the country, South and North, rural and urbanl, farmers and factory workers. That was what preceded Progressivism. So, it wasn’t like most Southerners, even rural Southerners, were clueless about and indifferent to the changes happening. It would be interesting to know how Bageant’s childhood ‘pre-capitalist’ community responded to Populism and Progressivism.

      “Things are changing now. The South is mostly used today for its cheap labor more than anything else.”

      Thar isn’t so much a change. The South has always been a place of cheap labor, not just slavery but also cheap white labor. Part of this is because most of the largest cities and most concentrated populations were in the North. It is harder to organize for politics and unions under low population conditions, especially when there is only one major source of employment in an area, such as a single mining company. That was a problem. This is why blacks were only able to make real strides of progress when they moved to the Northern big cities.

      Now, all of the rural areas are emptying of population. Even prosperous states like Iowa have severe poverty in the rural areas as big ag has taken over. Few people are left in the rural areas, but many of those remaining are extremely bad off. There is little incentive to fund the infrastructure and services in areas where the population is shrinking. This exacerbates the social problems there.

      Living in a farming state, I have some sense of the problems facing farmers and other rural residents. I live in a city myself, but farming is never far from the media’s attention in a state like Iowa. The economy is built on agriculture, even as fewer people are directly employed in it.

      • It’s hard not to make some generalizations as you’ve noted.

        You are right though that higher population densities are needed for organizing. Perhaps that is why Europe has generally done better in the struggle of labor vs capital than North America.

        In the Rust Belt and parts of the Midwest, over the past 40 years, the collapse of American manufacturing, whether due to superior foreign competition, poorly advised trade policies, or in some cases, self-inflicted outsourcing, has become a serious issue as well.

        I think that the decline in unions and the North has made things more aggressive than before in terms of exploiting the South for its cheap labor. As had outsourcing. Apparently, this recession led to a record of outsourcing.

        Regarding Iowa, since you know it best, look very closely at that map of mortality. Those 4 blue dots in the centre are probably Des Moines and the surrounding environs. The 2 blue dots to the east are probably Cedar Rapids and Iowa City. There’s 2 more blue dots, one probably near Fort Dodge, and the other in the Southeast is probably Mount Pleasant.

        The rest is mostly green – or worse, red. I bet for males, the map is probably not radically different.

        • I’m not against generalizations. I’ve often talked about North and South in general terms. But I want to be clear in my thinking, to not over-generalize.

          In my most recent discussion with skepoet, he suggested being more careful in distinguishing between description and explantion. I was debating him on this point. I thought he was being a bit too picky. Still, the point he was making should be kept in mind.

          We should be very aware of the potential assumptions and biases that might influence our comparisons and correlations, specificlly as we seek out causal relationships. Skepoet was concerned about my use of the term “white”. Thinking about this post, I was considering what we actually mean by “capitalism” and hence what we mean by “pre-capitalism”. It is just something that is on my mind.

          I was particularly thinking about what are the actual causes and the most fundamental causes. Is “capitalism” in itself actually a cause or an indicator of a confluence of factors or a way of labeling that confluence. What we think of as capitalism might be more of a result of particular condtions and influences. For example, capitalism in the form of industrialization partly didn’t develop as quickly in the South for the simple reason that there were fewer large bodies of water for cooling and fewer large rivers for transport; along with that, all the water probably made it easier to build canals as well.

          Initial environmental conditions set the stage for cumulative effects.

          Because of the water, factories were built. Because factories were built, infrastructure was built. Because of jobs available because of factories and infrastructure, large populations became concentrated in urban areas and big cities formed.

          Because of all that, traditions of multiculturalisn, social liberalism, and political progressivism developed in the urban North which made organized labor and organized activism easier. This further attracted certain kinds of people and created a very specific kind of demographics.

          All made possible, although not inevitable, by the necessary initial conditions. It helped that those conditions coincided with a particular multicultural tradition in the Middle Colonies. But if not for those other conditions, that multicultural tradition wouldn’t have spread across the Midwest and have become established in industrialized big cities like Chicago.

          It is a complicated set of factors. It is hard to know what is causing what.

        • I always like to see mapped data. It fits some patterns I’ve seen before, but there is much going on.

          About Iowa, most of the state’s population is in the East. It is unsurprising to see social problems in the shrinking and aging population of rural western Iowa where the GOP dominates, a region dependent on farm subsidy welfare. However, it appears there are plenty of social problems in eastern Iowa as well. Much of it is probably the same rural problems outside of the cities. Also, many of the old industrial towns aren’t doing as well as they once did.

          This should shock Americans. Farming states like Iowa are prosperous and have been the bedrock of the American economy for centuries. Iowa along with its nearby neighbors to the West and North weathered the storm of the recession better than any other states in the country. They maintained robust economies and housing markets. Even so, the rural problems have hit hard in these farm states.

          It is likely the same basic problem as the Rust Belt. The issue with the Rust Belt isn’t just or even mostly the disappearance of manufacturing or its movement elsewhere. There is still a massive amount of manufacturing in this country. At least by some measuresl, US manufacturing hasn’t shrunk.

          I doubt the disappearance of manufacturing jobs is caused primarily by closed factories and outsouring. Rather, it simply requires fewer workers to operate a factory now than it did in the past. Technology has made so many jobs obsolete. The same thing happened in agriculture. There are more Americans than there are Americans jobs. There are more people on the planet than are needed in modern hi-tec globalized capitalism. Small farms, small factories, and sall towns are increasingly rare.

          The states that look the best on that map are largely those being propped up by government money through the military industry.

  3. I suppose in that regard, you do have a point in terms of culture.

    So you think capitalism was the result of geography? It’s certainly a possibility. Europe does have favorable precipitation patterns in many ways I suppose.

    Others have suggested that fierce competition between the nation states led to the level of innovation that caused Europe to leap ahead during the late 18th and 19th centuries.

    I suspect it may be a combination of the reasons.

    Equally interesting, it does seem like societies with easy access to natural resources seem to do less well than those who have to struggle. It’s been called “Dutch Disease”. Norway seems to be the one best avoiding it.

    Canada I fear is doing a poor job by comparison. I hope that this is the start of a long-term trend:

    It does seem like excessive natural resources does cause a decline in technological advancements. Perhaps the Middle East is a good example; at one point it was one of the worlds centres of development. Today, much of the technology and high quality of life is imported, as is labour.

  4. Relating to the map, here are the articles:

    Anyways, let’s look more closely at the map.

    – The Rust Belt actually is not doing all that bad. Ohio does have some areas though that appear to be suffering and the red in Michigan is probably the worst, which is no surprise. I wonder if race has anything to do with the areas.

    – The Northwest is a pretty grim picture. Like Iowa, it’s a very agricultural-centric economy in some states (it depends on the state though). Montana seems to be particularly bad.

    – The Southwest is a mix of green and blue areas for the most part. Colorado appears to be a a very “unequal” state with some areas blue, some green, and some red. Similar thoughts about Texas. The metropolitan areas are generally pretty good, but northern Texas is pretty grim.

    – Along the West Coast, the large cities are all doing well. But parts of North California are suffering, as is Oregon, and Washington. It seems like it’s very unequal – those who can afford to live well, probably live very well. Those who do not are in trouble.

    – The Southern US … well the red says it all. West Virginia, Kentucky, Tennessee, Arkansas, Louisiana, are well … covered in red. The Deep South, northern Florida, Virginia, North Carolina … yeah they are not doing good either. Even in the South, the cities are generally faring pretty well, especially in Florida.

    – The Northeastern US is the only region (save maybe in the big cities along the West Coast), that does very, very well. There are parts of Upstate New York and Pennsylvania (especially in Appalachia, which is very conservative) not doing well though.

    I don’t know how much you know about New York (I’m along the border so I know enough) – New York is essentially like 2 states, New York City and to a lesser extent the smaller cities, which tend to be very left of centre, and the rest of the state, which by northeastern standards is very conservative.

    I wonder what a map of Canada would look like. Probably the Maritime provinces would not fare well?

    • A central factor is growing economic inequality. Even as the rich are getting richer, the poor are getting poorer. This is true in both prosperous and impoverished states.

      It’s not just wealth getting concentrated in fewer hands but also in fewer places. The wealthy themselves are getting concentrated in terms of where they are living. The poor are also getting concentrated, although there remains plenty of isolated poor rural populations.

      In general, most Americans especially the young generation are heading to big cities and other urban areas. It will be an interesting experiment. The younger generation is not only becoming more concentrated but this is happening while their being the most highly educated and most unemployed generation. Jobs are disappearing and they aren’t likely to return. A permanent underclass has formed of excess labor and useless eaters.

      That is a recipe for revolution, whether peaceful or violent. Or else those in power will try to redirect the outrage and desperation into something like another world war whch would help them to eliminate some of the unneeded population.

      • It is looking like parts of the South, particularly southern Florida, the large metropolises in Texas, and the Western cities are getting the most youth. Seattle does seem to be as well.

        I suppose of some concern is that the Western states are in danger of severe water shortages. There is some worry about megadroughts.

        The Northeast is stagnant. Perhaps that is a function of the high costs of living or some other factor.

        The rest of the nation is stagnant or losing youth.

        • It is a weird dynamic. A shift of an entire generation out of particular regions and into other regions. Along with all the other major shifts, demographic and otherwise, it doesn’t seem like an overly stable set of conditions.

          What do you think might be the long-term results of all this, politically and economically?

          Is capitalism viable if and when the majority of the American population becomes a permanent underclass as is already the case in most of the world? Are oppressive states like China the future of capitalism? Would Americans tolerate that as Americans used to tolerate slavery and Jim Crow?

          • In all fairness to China, their government whatever its other failings at least takes a long-term view. They’ve also worked hard to improve the living standards of the average Chinese in the long run. They’ve invested in massive infrastructure projects, R&D, and a lot of other areas.

            The same cannot be said about the American government. It’s owned by the plutocrats, who are very short-term and in it for themselves. The Chinese are not perfect, but at least they take the long-term collective view.

            Is capitalism viable? The consumer economy will probably collapse in on itself because most will not be able to afford such things any more. Eventually there will be no more wealth left to trickle to the top 1%. I do not know what will happen after that. They will probably try to run the nation like a banana republic though.

  5. Hmm … relating to Canada, life expectancy is 82.5 years in 2014, which is a bit on the average side for developed nations (no doubt due to high infant mortality though).

    Older data:

    In the US, life expectancy is 79.8 years for 2014 and well, from that map, appears to be falling for an alarming proportion of Americans.

    Source; WHO

    What I am fascinated by is Denmark, which has a low life expectancy 80 years, despite doing well at everything else.

    • With the exception of the northeast, it’s almost a mirror of some of the recent elections.

      The Northeast being the exception, as it is a solidly Democratic voting base.

  6. Relating to China, they’re not perfect either. I bet the overwhelming majority of the wealthiest did not by any measure “earn” their income in an honest way. It’s a huge source of resentment in China.

    The difference though, is that they recognize that their wealth and power reside in the fact that if China, the nation is powerful, then they are powerful, and able to wield their influence. In particular, they view it as their objective to become the wealthiest nation in the world again, a position which they were for most of history.

    Also, there is the matter of performance legitimacy – the government has said they can provide faster growth than a democracy (arguably true), owing to the suppression of consumption.

    Now, let’s look at this situation in the US.

    – 40% of all corporate profits are “earned” by the banks. That’s not money that by rights, we’d consider “earned” (ex: added legitimate value to society). It’s mostly a transfer payment, or economic rent.

    – The next largest sector would be the fossil fuel sector. I suppose they are closer to “earning” in a way that adds value, but then again, there’s some huge ethical lapses there. Also, they hardly pay taxes, due to their accounting tricks.

    – Then there’s the rest. Most are lower margin industry. There’s a few companies that make a ton of money, like Apple, but they are generally the exception.

    Wages as a percentage of GDP keeps falling. So what does this mean?

    – Well, at some point, as I indicated, there probably will not be much of a consumer mass economy. We may see an economy for the top 5-10% though still, selling niche high end products.

    – I suspect that most of the middle class if things keep going the way they are will also end up being poor.

    – Essentially the economy will revolve around serving the top. Like a banana republic. The top 0.1% will do everything to make sure that they stay on top.

    – Infrastructure will continue to decay and I suspect in the coming decades we’ll see more bridge collapses, utilities falling apart, etc, while lacking the money (increasingly because people are simply too poor) to pay for such things.

    It’s going to take either something like the New Deal or something more dramatic to make real changes.

    • The other thing is that the military industry is the single largest part of the US economy. Our position as the greatest global superpower is dependent on the military industry. We are the police of the world, the big brother military empire. All of that is tied up with the oil industry. The military, at least in the past, was probably the biggest user of oil and of course guaranteed our access to oil. It is power serving power.

      • With peak cheap oil happening, the ability for the US to sustain such expenditures is highly in question.

        There’s also the fact that the military is a huge drain on resources, not something that produces things of social value. From a price:jobs created standpoint, military spending does a lot worse than other areas of spending.

        As the tax income of the average person begin to decline, there probably won’t be enough money to sustain this apparatus at all. The very wealthy will be able to use tax planning to avoid paying their taxes as do corporations today.

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