On June 4, 2013, Salvatore Babones writes on OpEdNews:
A new report from the International Labour Organization shows that across G20 countries corporate profits are up, up, up. Since the year 2000 corporate profits as a proportion of total national incomes have risen by 2.2% in major high-income countries and by 3.4% in major middle income countries.
Along with corporate profits, executive pay has hit record levels as well.
All around the world the plutonomy — the economy of big corporations and their CEOs — is doing quite well, thank you. But the realonomy — the real economy in which ordinary people live and work — remains stagnant.
And what are all those big corporations and wealthy individuals doing with their ever-increasing wealth? They are sitting on it, mostly by hiding it in offshore tax havens.
“The cash holdings of publicly-listed enterprises in advanced, emerging and developing economies combined, increased from 2.3 trillion USD in 2000 to 5.2 trillion in 2008 and continued to rise further during the crisis, reaching 6.5 trillion USD in 2011,” according to the ILO.
It’s not just ordinary people who are losing. Small businesses are losing, too. The ILO reports that large firms are roughly three times as profitable as small firms. No wonder the large firms are taking over.
Big profits, tax avoidance, cash hoarding, and the decimation of small businesses are not separate trends. They are all part of one big trend. Our small firms are disappearing because big firms don’t play fair.
They don’t have to.
Up until the close of the nineteenth century, the United States remained a working democracy, with the production of products and services dependent on labor worker input. When the American Industrial Revolution began and subsequent technological advance amplified the productive power of non-human capital, plutocratic finance channeled its ownership into fewer and fewer hands, as we continue to witness today with government by the wealthy evidenced at all levels.
The resulting impact of our current approaches has been plutocratic government and concentration of capital ownership, which denies every citizen his or her pursuit of economic happiness (property). Market-sourced income (through concentrated capital ownership) has concentrated in individuals and families who will not recycle it back through the market as payment for consumer products and services. They already have most of what they want and need so they invest their excess in new productive power, making them richer and richer through greater capital ownership. This is the source of the distributional bottleneck that makes the private property, market economy ever more dysfunctional. The symptoms of dysfunction are capital ownership concentration and inadequate consumer demand, the effects of which translate into poverty and economic insecurity for the 99 percent majority of people who depend entirely on wages from their labor or welfare and cannot survive more than a week or two without a paycheck. The production side of the economy is under-nourished and hobbled as a result.
While Americans believe in political democracy, political democracy will not work without a property-based free market system of economic democracy. The system is the problem, but it can and must be overhauled. The two prerequisites are political power, which is the power to make, interpret, administer, and enforce laws, and economic power, the power to produce products and services, whether through labor power or productive capital.
At present, there is a brewing power struggle going on in the United States between individual human beings (citizens) and the plutocratic powers who manipulate our government and the would-be plutocratic powers (top corporate executive managers and financial barons). What the 99 percent movement should be really all about is returning America to economic democracy. If we do not achieve economic democracy, then plutocracy will lead to fascism—the ownership of productive capital by the rich and by their institutions.
Once the national economic policy bases policy decisions on two-factor binary economics, productive capital acquisition would take place through commercially insured capital credit, resulting in a quiet revolution in which economic plutocracy will transform to economic democracy.
The solutions can be found in the Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797, Monetary Justice reform at http://capitalhomestead.org/page/monetary-justice and the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm
http://www.opednews.com/articles/When-It-Comes-to-Business-by-Salvatore-Babones-130604-622.html
