Elizabeth Warren gets branded a radical for proclaiming “capitalism without rules is theft.” If anything, she’s too moderate, and those doing the name-calling are the thieves or their enablers. Uncontrolled capitalism is capable of almost anything. This is not an opinion. It’s a precis of the last few hundred years of history as well as the latest headlines any day of the week.
You don’t have to be a Marxist to have noticed that those who control the means of production, starting in the era of Blake’s satanic mills, have presided over and profited from child labor, the company store, bloody strikebreaking, a complete lack of safety regulations, a minimum wage, pensions, or healthcare for workers.
The products this regime produced were also likely to be deadly or defective. During the Civil War the great industrial engine of the North gave the Union an edge, but one regularly undermined by price-gouging, crony capitalist contracts, and the production of defective weapons, shoddy uniforms and inedible rations.
Greed trumps patriotism every time. Harry Truman presided over Congressional investigations into similar corruption in World War II, and the Iraq War was made more deadly by Humvees that were incapable of protecting troops from mines and IEDs and inadequate body armor.
On the home front, Warren’s brainchild – the Consumer Financial Protection Bureau – was designed to prevent the kind of exploitation of consumers by banks and other predators that led to corrupt real estate lending and four million foreclosures during the Great Recession. Republican friends of unfettered capitalism have done all they can to render the CFPB toothless.
Banks like Wells Fargo create accounts unbeknownst to their customers. Insurance companies offer policies that don’t provide the promised protection. Warranties cover parts that never fail, but not those most likely to conk out tomorrow. Payday lenders make usurers look benign. Student loans are a disgrace. You can make your own list, but every cognizant consumer knows trying to control bad behavior by the financial sector is a never-ending game of Whack-A-Mole.
As the Great Recession taught, malefactors are brilliant at inventing new ways to con customers and transfer wealth from investors to those who aim to exploit them. We all remember, but never understood, how credit default swaps, collateralized debt obligations, fairy dust, and poison apples plunged the planet into a lost decade.
Silicon Valley has brought the malign smarts of nerd boy gamers to the exploitation of unsuspecting Main Street. We now know that such useful “free” services as Google and Facebook come with a huge hidden cost. They are busy stealing your data and monetizing your existence. It is just that latest reminder that every child should learn a simple truth beginning at birth. “There is no such thing as a free lunch!” The cost is just hidden until too late.
The goal of capitalism in the digital age is no longer to sell customers a product, but to make them a product. There’s also been a shift from selling products to forcing consumers to become subscribers, mortgagees or indentured servants. Once you went to the Blockbuster and rented a DVD for the weekend, now Netflix, Hulu, Apple, Amazon want to make you an income stream.
Once Microsoft Office came with your machine, but why sell the ability to type or make a spreadsheet once when you can force the customer to keep paying over and over. You no longer own the tools you paid for, you rent them. Fail to pay and they stop working.
The nadir of this trend of requiring constant payment for the same service or product or adding surcharges if your want bells and whistles that turn out to be essential to get the job done has been reached, and 346 innocent bystanders are dead. I’m talking about the victims of the Boeing 737 Max 8 crashes in Indonesia and Ethiopia
We now know that to maximize profits, the company made two essential features optional at extra cost — redundant angle of attack sensors and a cockpit warning if the sensors disagreed. Airlines who regarded these add-ons as frills could unwittingly imperil hundreds of lives. Boeing also failed to make sure pilots were trained on new computerized features, though that may not have helped since a glitch in the software has now been detected too late to save the dead.
When we are all being told to look forward to a world of AI where the machines will control everything – cars and trucks, streetlights, the investments in our retirement account, air traffic networks, power plants, dams, surgical procedures – this is a timely reminder that one lapse by a coder can kill you. The Roman poet Juvenal said “Quis custodiet ipsos custodes?” That is, who will watch the watchmen? In our time, who will check the code of the code checkers?
All these issues might have been detected if the FAA had been on the job, but the Trump administration has one of his unqualified acting heads running the body, and in any case, FAA turns out to be guilty of a typical instance of regulatory capture. We learn the FAA now trusts Boeing to do its own safety verifications since they understand the product better than the regulators.
When capitalism turns into crony capitalism and regulation is regarded as Nanny State interference, the result is Killer Capitalism. It’s obviously time to change the motto on the money from E Pluribus Unum to Caveat Emptor.