Reclaiming the Marketplace
From Sickness to Health
excerpted from the book
Democracy vs. Capitalism
by William H. Boyer
Apex Press, 2003. paper
RECLAIMING THE MARKETPLACE
When people put their money into stock already circulating they
depend on the psychological effects on the public of reports of
growth for the company. Large amounts of capital are circulated
that are doing nothing-they are not productive and they serve
no real economic or social need. Jobs are created in the "securities"
business as people buy and sell stock and try to stimulate a bigger
speculative bubble. The more people who have stock, the more optimism
about growth must be created to keep the house of cards from collapsing.
CEOs want their stock to stay high when they bail out, so they
commonly release distorted figures to encourage public buying
of their stock. Ultimately, the value of the stock depends on
a shared illusion, that something with the label of a corporation
but disconnected from the corporation has value. It is really
When illusory wealth is created that has
not produced anything substantive, it becomes a zero-sum game,
providing nothing except a transfer of "wealth" from
one person to another. Stocks are only useful to the economy initially,
at the time they are issued by a corporation in the initial public
offering. The corporation uses the funds for whatever it produces.
Most stocks are traded after they are issued in secondary markets
and provide wealth to those who buy low and sell high, but to
do this others must buy high and sell low. No real national wealth
is created, it is only transferred between people. The net result
is to provide no wealth to the society, no aggregate wealth whatsoever.
The axiom that there is no such thing as a free lunch still applies
to economics. The stock market is largely a zero sum game. The
main wealth is in the "friction" of charges made by
brokers during transactions.
But why would people play this game? John
Cassidy details the stock market of the 1990s in Dot Con. The
Greatest Story Ever Sold. "To be willing to take a risk,
people needed to see others doing the same thing-and see them
making money doing this." Based on this psychology "a
rising stock market turns into a speculative bubble (2002, 4)."
Within this mob psychology people can lose all connection to reality.
"The peak of a speculative mania is a sight to behold. In
the scramble to cash in before it is too late, all prior reasoning,
sentiment, and knowledge count for naught. No one is satisfied
with even exorbitant gains, but everyone thirsts for more, and
all this is founded upon a machine of paper credit supported only
by imagination (191)."
John Kenneth Galbraith referred to the
same psychology in the September 1929 speculative bubble, saying
with his usual irony that if there must be madness, something
may be said for having it on a heroic scale.
In the 1990s a dream world of a "new
economy" was becoming fashionable. Many people believed that
companies that had nothing to sell but a faith based plan based
on an "information" economy created by computers, was
the best place to "invest." Billions went to Silicon
Valley internet companies that had nothing to sell except hope.
Their initial public offerings were bought up at inflated prices
and resold on the stock market at even higher prices. The standard
of "price/earnings ratios" disappeared because there
were no earnings in most dot corns. People followed others into
this wonderful world of rising dot corn stock prices. Reality
inevitably superseded faith and illusion, and the bubble broke,
leaving millions with losses.
People put real money into stocks and
therefore shifted their wealth into financial speculation in which
money moves around doing nothing useful but rather deprives society
of the real development that should have occurred-getting rid
of slums and decay in inner cities, replanting forests, building
schools, cleaning up toxic dumps, etc. Instead they get only a
symbolic piece of paper with the name of a corporation. This diversion
of public capital from socially useful purposes is an indication
of why our social legacy is so meager. The dot corn bubble at
the end of the 1990s produced a social shock, but not enough to
examine the assumptions on which the entire stock system is based.
Is the stock market necessary? New stock issues provided only
4 percent of the capital of U.S. corporations, according to the
1993 Federal Reserve figures, which indicate that U.S. non-financial
firms raised 82 percent of their financing internally, 12 percent
CONSERVATIVE REPUBLICANS AND CONSERVATIVE DEMOCRATS
The two major political parties in the
United States are largely instruments for keeping an oligarchy
of the rich and powerful intact and supporting the ubiquitous
propaganda required to obscure this fact. If the "bottom"
four-fifths of the population understood what was happening, they
would not likely continue to cooperate in supporting rules that
concentrate economic power in a power elite.
The American public does not really provide
intentional support for the rules that support the oligarchy.
The rules and institutions are reinforced primarily by a public
that has largely lost hope for a better government and sees no
other alternatives. Elections in the United States attract only
a minority of the electorate, and the common comment reflecting
political apathy is that both political parties are essentially
the same, so why vote?
This is a half-truth. Democrats use government
to provide more public services than Republicans, but both parties
are dedicated to keeping the power of the economic system under
the control of corporate capitalism, which means the primary power
is in the hands of large, increasingly global corporations. This
is oligarchy-government by the rich and the economically powerful.
With a look at how the economic pie is
divided, let us see what the results have been.
1. The total net worth of the top 1 percent
of the population is equal to the total net worth of the bottom
90 percent of the population, and the rich are getting even richer.
The wealth of the top 20 percent has increased while the wealth
of the bottom 80 percent has decreased. Under "Reaganomics"
from 1980 to 1987, the average net worth of the 400 wealthiest
Americans tripled! The Congressional Budget Office indicates that
the lowest fifth has declined in the last 20 years while the middle
2. The two political parties have supported
legislation that transfers public finds in various ways. 'When
"welfare" is mentioned, it is usually assumed ( that
welfare goes to the poor. The fact is, however, welfare to the
rich is / \ about three and a half times as large as the welfare
to the poor, much of it being corporate welfare. Even the mainstream
Time magazine ran a series on corporate welfare in early 1998.
Pointing out that "during one of the most robust economic
periods in our nation's history, the Federal Government shelled
out $125 billion in corporate welfare, equivalent to all the income
tax paid by 60 million individuals and families (Bartlett and
L Steele 1998, 36-37).
3. In 1950, corporations paid 26.5 percent
of the federal government's general revenues. Now they pay about
10.2 percent (Phillips 2002, 149). Payroll taxes in 1950 were
6.9 percent, now they are over 31 percent. If businesses paid
taxes at the same rate as 40 years ago, the federal deficit would
soon disappear. The more "conservative" the political
party; the more the argument is for lowering taxes on corporations
and on individuals with high incomes. Lowering the tax rate for
capital gains down to 20 percent has affected mainly the rich,
and this has been at the center of conservative platforms for
4. Conglomerates are forming at an accelerating
rate. Small corporations are bought up and become part of a giant
corporation that increases its economic power and its influence
over the political system. Even the press, which presumably is
essential for democracy under the first Amendment of the Constitution,
is now controlled by fewer and fewer corporations and wealthy
individuals, and is used to serve the politics of its owners.
Television is a key part of this oligarchy, shaping the ideas
and messages conveyed to the public. It too is under more and
more centralized control of a few giant corporation .
As PBS accepts more and more advertising from corporate sponsors,
it is highly unlikely to broadcast any program that offers a fundamental
critique of capitalism.
SOME LESSONS: AMERICAN CAPITALISM AND CUBAN SOCIALISM
The United States represents a model of
advanced capitalism, while Cuba is probably a good example of
(a particular) kind of socialism. By the end of the twentieth
century, the U.S. model dominated the world. Yet the United States
had shown such fear of the attractiveness of the Cuban model to
other countries that it tried invasion, assassination attempts
on Castro, an embargo, and then a blockade in an (unsuccessful)
attempt to destroy Cuban socialism.
People need to understand the difference
between these two political-economic systems to help identify
some alternatives for the twenty-first century. The core differences
are: (1) in the U.S., the economy is owned privately under a market
system, while in Cuba, the economy is controlled by the government;
(2) the U.S. system focuses on maximizing the gross national product
while the Cuban system focuses on human development; (3) the U.S.
system focuses on the growth of the national product to respond
to the wants of people as they make purchases through the market.
This is a "wants first" system. The Cuban system, on
the other hand, focuses on people's basic needs, such as food,
housing, medical care, and education. This is a "needs first"
system. While the U.S. is stronger on speech and political rights,
Cuba strongest on economic rights.
Cuba is the only country in the western hemisphere that the United
States has not controlled, conquered, or at least opened up for
American corporate investment. We invaded in the Spanish-American
war and kept the option to interfere if need be and we retained
the Guantanamo military base. The Monroe Doctrine of 1823 was
a declaration that no foreign country should have control in the
western hemisphere. It turned into an excuse to put the United
States in control of the western hemisphere, driving out governments
(often democratic) that were independent of American power.
A long line of countries in Latin America-Mexico,
Chile, Panama, Honduras, Grenada, Nicaragua, Puerto Rico, Haiti,
and the Dominican Republic-fell to combinations of CIA manipulation
of internal politics, Marine invasions, economic support of dictatorships,
control of the press, embargoes, and assassinations of heads of
state. Cuba is the hold-out.
To understand the United States it is
useful to understand Cuba. American claims of exporting "freedom"
and "democracy" can then be seen as a deception to cover
up the meaning of capitalist "freedom." The United States
has wanted Latin American countries to be safe (free) for American
corporate investment. Because she won't cooperate, Cuba is the
pariah-a haven for the poor, out of bounds for rich investors.
Cuba is one of the poorest countries in
the world and it has approximately the same quality of life index,
in terms of health and so on, that the United States has. That's
really scary and that's an enemy. That's what they mean when they
say. "We can't tolerate another Cuba. It is bad enough that
there is one country that can serve as model for this kind of
development. Suppose there were two, suppose there were three"
(Chomsky 1999, 42).
FROM SICKNESS TO HEALTH
Every year, half a million Americans die
of heart disease. Every year mo than a million undergo coronary
bypass surgery or angioplasty to enlarge the openings in closed
or partially closed arteries. The cost: $15.6 billion for the
two procedures alone. The cost in pain and suffering: incalculable.
Most people are told "You have to have a bypass or you're
going to die" says Dr. Dean Ornish, a physician and clinical
professor of medicine at the University of California, San Francisco.
"That's not usually true. For most people, diet and lifestyle
changes can be a safe alternative at a fraction of the cost and
without the risks of trauma of going through surgery. In other
words, they can halt or even reverse heart disease (June 1999,
Dr. Dean Ornish, in a 1998 study published
in the Journal of the American Medical Association and the British
journal Lancet, reported that "77% of people who were eligible
for by-pass surgery or angioplasty were able to avoid it safely
by changing diet and life styles, saving almost $30,000 per patient."
Dr. John McDougall, a physician who helped
pioneer diet as prevention, has told people for years that, based
on the evidence, people should simply say NO to by-pass. He shows
that the evidence indicates that those who say no usually live
as long as those who say yes, since by-pass, except in unusual
cases, merely reduces pain which can be reduced by non-surgical
THE HEART BYPASS SCAM
In the early part of the twentieth century
doctors routinely took out people's appendixes. It was virtually
a fad to do so. Later (during my era) they took out tonsils and
adenoids. Presumably, nature had no reason to put an appendix,
tonsils, or adenoids in people. Organs could be removed like ornamental
parts on a car. Next came hysterectomies. They were popular in
the 1960s. If a woman's menstrual period was too irregular or
she had problems around menopause, the doctor removed half of
her sexual organs.
Fees for these medical procedures were
increasing according to the demand, but the big jump came with
by-pass heart surgery. Such surgery became possible and therefore
it became desired by both the patient and the doctor. As Dr. McDougall
used to tell surgeons-There is only one reason to do a bypass:
you want $20,000 (1983, 68-9). This infuriated many until he revealed
the evidence that, except in rare cases, those who had bypass
did not live any longer than those who refused. The operation
can also diminish a person mentally. According to Dr. McDougall,
the blood-circulating machine congealed platelets which could
hamper some areas of the brain.
Over the years the $20,000 fee for bypass
surgery has gone up and also, therefore, the incentive to recommend
that people have this operation. The procedure consists of having
one's chest cut open and then a vein taken out of one's leg and
then attached to the heart. There can be double, triple, or even
Bypass relieves angina-the pain of a heart
trying to get enough oxygen. Relief of the pain is the main reason
for doing the procedure. Yet with the proper diet and certain
medication, the pain can be rapidly diminished. Within a few weeks
of a low fat, high starch diet, there is often some reversal of
the clogged arteries and the symptoms that caused the angina.
Unless there is structural damage, continued correct diet can
produce basic reversal of the entire problem.
DIET AND THE AMERICAN WAY OF DEATH
The aristocracy of the Middle Ages demonstrated
behavior that continues to be the world pattern-wealth then as
now encourages people to eat high on the food chain. Roast lamb
was preferred over potatoes. Meat costs more, and so it was associated
with higher social class. The wealthy aristocracy saw no connection
between their eating habits and their high levels of gout, heart
failure, diabetes, and cancer. But the connection was there.
This connection came to light after World
War II, when the German people were discovered to have very low
levels of heart problems while the liberating Americans had very
high levels. If stress was the main cause of heart problems, how
could this be? The German people had been under very high levels
of stress for years throughout the war, during which they survived
on meager meals based largely on potatoes, grain, and black bread.
The liberating Americans, on the other hand, ate high on the food
chain-beef, eggs, and dairy food.
Groups such as the Seventh Day Adventists
became prime study group because they are composed of two groups
who each follow a strict diet-one eats everything except meat,
and the other excludes meat and all other animal products such
as eggs and dairy foods. This provided three large, measurable
groups: 1) the average American group that eats all animal products
plus some fruits and vegetables, 2) the minimal vegetarian Seventh
Day Adventists who refrain from meat but eat other animal products,
and 3) the Adventists who consume no animal products (also known
as a vegan diet). Research findings were distinct. For heart failure,
cancer, and diabetes, the average American sample had the highest
rate. Seventh Day Adventists who consumed dairy products and eggs
but ate no meat had a much lower rate. And the "vegans"
who ate no animal products had the lowest rates of these diseases
... The research showed what happened
when these groups moved from their home area to another part of
the world where eating habits were different. Results have been
dramatic. Each group took on the diseases (or lack of them) associated
with the eating habits of its new home. For example, women from
rural Japan had exceedingly low levels of heart disease, but when
they moved to urban Japan and had higher incomes, their levels
of heart disease increased. 'When they moved to the United States,
they had even higher levels, and their children had virtually
the same pattern of high "degenerative" disease exhibited
by other Americans-for they had usually abandoned their parents'
eating habits. Genetics was, therefore, not the cause. The irony
is that the poor of the world generally eat a more healthy diet
than the rich, when they have access to sufficient food. They
are forced to eat low on the food chain. Their high death rates
are usually connected to infectious disease caused by the pollution
and contamination of their food and environment, or by actual
... The most definitive research, the
Framingham study conducted by the American Heart Association,
began in 1948 and is still continuing. It has provided strong
research evidence for a virtually direct relationship between
cholesterol levels and heart attacks. Industries that produce
cholesterol, such as beef and dairy companies, saw the need for
public deception and spent many millions of dollars on public
misinformation which ranged from individual testimonials to "bought"
MDs who tried to confuse the public by suggesting that "more
research is needed."
The first deception was that vegetarianism
created health risks because of certain nutritional deficiencies.
But the evidence shows the reverse. Vegetarians, especially those
that avoid all animal products, have the highest health levels.
Starches like pasta, rice, and potatoes have become the favorites
of long-distance runners and many other athletes who require a
lot of strength and stamina, though lots of starch is not necessary
for people who exercise less. And people do not suffer calcium
loss from vegetarianism, for vegetables, especially leafy greens
such as collards, mustard cabbage and turnip tops provide plenty
of calcium. The calcium in milk after all comes from cows that
graze on green vegetation. The loss occurs when lots of meats
and dairy products and other high proteins are consumed, which
causes calcium leaching. Protein excess is a major cause of osteoporosis.
A Harvard School of Public Health study
of 70,000 American nurses found that women with the highest calcium
consumption from dairy products have more fractures than those
who drank less milk!
The American Cancer Society has provided extensive PR that gives
people "a sense of unwarranted optimism about cancer cures.
This strategy has been exceedingly profitable. What is almost
never mentioned is that most cancer is caused by environmental
factors. The American Cancer Society will tell J people not to
smoke but will not take aggressive action for control of nicotine
as a narcotic. In a real sense, much cancer is caused by bad politics.
Placing emphasis on personal responsibility rather than public
policy is often a way to keep power in the hands of corporations,
such as the tobacco, dairy and beef industries, that profit from
a product that can increase one's chances of ending up with cancer
and/or heart attacks (Zepernick 2001, 181-182).
Dr. Samuel Epstein has been in a 30-year
fight against the cancer establishment, especially the American
Cancer Society. In the International Journal of Health Services
(Vol. 29, No. 3) he has an article titled "The American Cancer
Society: The World's Wealthiest 'Non-profit' Institution."
He says the American Cancer Society and the National Cancer Institute
have "incestuous conflicts of interest" with chemical
and pharmaceutical companies and, therefore, spend huge sums of
money on the treatment of cancer instead of on prevention.
He blames our cancer epidemic on the poisoning
of the planet. He says the overwhelming emphasis is on damage
control- on diagnosis and treatment rather than on prevention.
"You don't just expose people to carcinogens and then repair
the damage by giving them a pill." Epstein's The Politics
of Cancer describes the prioritizing of economics and politics
over health and shows how cancer has now become profitable. But
he also shows how cancer can be prevented (1978, 1998).
THE SAD STATE OF AMERICAN HEALTH VS. OUR MYTH OF SUPERIORITY
When American capitalism dominates public
health, as it does, and when treatment and diagnosis dominates
rather than prevention, the effects are that we have one of the
world's worse health records, compared to other industrial nations.
The Journal of the American Medical Association
documented the sad state of American health in July 2000 by ranking
the health of countries. Of the 13 countries in the comparison,
the United States ranks an average of 12th. The best in order
of ranking are Japan, Sweden, Canada, France, Australia, Spain,
Finland, the Netherlands, the United Kingdom, Denmark, Belgium,
and then the United States followed by Germany.
* United States is 13th for low birth-weight,
13th for neonatal mortality and infant overall mortality, 13th
for years of potential life lost.
* The U.S. is 11th for post-neonatal mortality,
and 11th for life expectancy for females.
* Life expectancy moves to third for people
65 years of age. Medicare may be the significant factor.
The dismal comparison is probably connected
to the kind of American politics that treats medical care as mainly
a market commodity while other nations presume that medical care
is a right which is supported by national systems. Of the more
advanced nations only the United States and South Africa do not
have a universal system of medical care.
Propaganda is to democracy what violence
is to totalitarianism.