18 Inch Rims

18 Inch Rims

Bling, 20-inch rims, label-whores, fat cribs, fast cars, and faster women- it seems that all these things are associated with wealth in America's consumer culture. It's the high life, the capitalist road that takes you all the way up to first class, laden with luxury. What isn't abundant in our culture are the images of children scuffling at Prada shoes for nickels, and citizens coerced into working a nine to five under poor and harmful conditions. And nowhere on MTV can you find clips of the hundreds of humans living with major health problems because of toxins released in the air by large power plants. The disparity between those who suffer and those who produce the suffering is a direct result of a free-market system erected alongside industrialism and monopoly capitalism. Therefore, a heated debate develops around the free market and the duty of government to regulate the disparities and the injustices that it yields. Essentially, free-market defenders advocate a limited or virtually nonexistent government role in the U.S. capitalist economy, calling for freedom for individuals to seek their self-interests; which in turn, according to free-marketers, will accumulate wealth for the entire nation. Critics of the unregulated, free-market highlight its failures and this in turn justifies their call for government's need to intervene to help stimulate the capitalist economy and revive it back to a functioning market. But the debate over government intervention is an intricate one, for even the father of the free-market system, Adam Smith himself, condones some government action on part of society's organization. It is the different forms of government intervention that is of significance and becomes hot plates for the political economic discussion.

Government intervention in the economy can come in the form of regulation, planning, distribution, production, or mere influence. Regulatory policies like trust-busting and monopoly control are forms of government intervention that promote the capitalist system and simply help sustain the free-market by creating its major mechanism: competition. So while some forms of government intervention support capitalist ideals by stimulating its mechanisms and helping to protect it from failure, other forms of intervention can disrupt the capitalist system by going against its core beliefs and establishing policies of reform that creates a less free, more socialist economy. Government intervening to cut down on the effects of negative market externalities, such as pollution, is seen as disrupting the market's self-regulation; but these types of interventions are crucial to the well-being of the citizens of the U.S. and our society in general. Because the discussion is essentially one surrounding the amount of power given to the government through intervention, a debate on elitist power and corruption in both sectors unfolds. Therefore, a system of checks and balances must be appropriated in order to sustain a liberal society where neither government nor market has too much concentrated power and authority.

No clearer sign of the importance of government intervention in the economy has presented itself than the Great Depression and no such intervention has been so widely accepted as John Maynard Keynes' fiscal policy under what he calls a "'mixed economy' in which the government plays a crucial role" (Heilbroner and Thurow, 40). Through Keynesian approaches and Franklin Roosevelt's New Deal programs, the Great Depression of the 1930s ended, revived by the government's implementation of solutions that created employment, and in turn demand, and stimulated investment for businesses. These solutions, however, were not anti-capitalist, but emphasized Keynes' view that favored the "sustaining and improving [of] the capitalist system" (Heilbroner and Thurow, 39). The faults that Keynes saw in the unregulated market that Adam Smith advocated were the lack of self-regulatory mechanisms and the market's tendency to undermine growth, rather than accumulate on its own. This meant that an economy, if depressed, could stay stagnant without the help of outside intervention (Lecture, 9/29). This is where the government could step in, by stimulating investment and consumption and making sure that savings and investment were linked at a stable level, ensuring that the problematic relationship of too much savings and too little investment never occurred. Government could ensure this through such policies as control of interest rates, which mandates the amount of savings and investment by making it cheaper for businesses to borrow money as savings build up (Lecture, 9/29).

Similarly, the New Deal programs instituted many new pieces of legislation which called for a variety of agencies to help stimulate demand and then ensure stability in different sectors of the economy. The New Deal programs created employment and therefore created consumer power which lead to an increased overall demand, which helped to lift up the depressed economy. Under this legislation also came the Social Security Act of 1935 which created unemployment assistance to those who were considered "unemployable", such as elderly and single mothers, and is a crucial step towards our modern welfare state (Lecture, 10/18). Keynes justifies the welfare programs and income taxation that a mixed economy employs: "The outstanding fault of the economic society in which we live are its failures to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes" (Heilbroner, 287). Keynesian fiscal policy and FDR's New Deal programs of relief, recovery, and reform, helped smooth the booms and busts of the unregulated market, creating a much more stable and less crisis-prone market; thus proving government intervention as essential to the market.

Other historical examples that justify government intervention are the agrarian revolt against the monopolistic railroads at the turn of the 20th century and the Progressivism which spread shortly after. In 1885, the battle for the control of the railroads was at its peak and Senator Shelby Cullom of Illinois formed a committee which administered a detailed report of "the abuses of the railroads, including pooling, price discrimination, rebates, prohibitively expensive rates, and significant long-and-short haul differentials that placed certain shippers and regions at a disadvantage" (Eisner, 49). This committee-run investigation led to the Interstate Commerce Act of 1887 which was a legislation that regulated the railroad monopoly and created more competition by proclaiming "All charges made for any service rendered...shall be reasonable and just" (Eisner, 51). The farmers who were discriminated against through railroad prices collected for transporting their crops were alleviated of this injustice. This government regulation on the railroads could be seen as essential to creating the market mechanism of competition; even Milton Friedman and Adam Smith, amongst the strongest of free-market advocates, support the regulation of monopolies by the government. The debate around this issue is clearly in favor of a justified government regulation. But, again, this form of intervention, which paved the way for the ambiguous Sherman Anti-Trust Act of 1890, merely helped create the market mechanisms needed for the economy to function when the market failed to do so, clearly demonstrating that no such self-regulation was inherent in the free-market.

Senator Cullom cited "the need for specialized expertise and flexibility" on the part of the ICC, the commission overlooking the Interstate Commerce Act, revealing the move toward Progressivism by American society (Eisner, 50). The Progressive Era in American history reveals the dire need of government intervention and the failures of the market system through the exposing of atrocities such as poor, unsanitary conditions in the meat factories. Such revelations and scandals were brought to the public's attention through muckrakers, writers who exposed such injustices of the capitalist system. Eisner writes, "Muckraking exposes revealed the dark side of industrialism and urban corruption to a large middle-class population that expected a policy response" (33). The public, when industrialism's faults were revealed, turned to the government and expected intervention through policy implementation, showing a clearly justified response on the government's part. This justification is known as the "public interest theory" and reveals the government's stricter interventions on behalf of the people, a much more sociable approach of impeding business which monitors production rather than stimulating mechanisms the market already needs (Lecture, 10/13). During the Progressive Era, there was a widespread faith in the government to implement such regulations and commissions that could monitor the abuse that corporations were prone to employ. And this newfound faith in the government to limit huge corporations' abuses lead to a new capacity and role for the state. Ever since the Progressive Era at the turn of the 20th century, regulation has been a staple form of government intervention- implemented through agencies and commissions established to oversee different specified failures of the market system.

Government intervention is justified not only when picking up the market's slack, but also in addressing the injustices inherent in the market system, especially those carried out on the workers that are the backbone of the system itself. It is hard to believe that the market would be left to its own devices in a society where the government has always intervened to monitor many aspects of the private sector: marriage- outlawing the marriage of two people of the same sex; sexual relations-with legislation concerning forced intercourse and statutory rape; and domestic relations- intervening when instances of domestic abuse arise. It is no surprise, then, that labor laws would be so harshly implemented by the government, for the abuse and exploitation of its citizens is nothing to stand by and watch. Adam Smith draws out the role of the government: "the government role is to protect every member of society from the injustice and oppression of every other member of it" (Caporaso and Levine, 44). Karl Marx's theory of "surplus value" clearly demonstrates the injustice inherent in the capitalist ideal of profit and accumulation: "profit lies in the ability of capitalists to pay less for labor power...than the actual value workers will impart to the commodities they help to produce. Thus, profit... essentially resides in underpaid labor" (Heilbroner and Thurow, 35-36). One of the strongest tendencies of capitalist firms is to grow and accumulate more capital, which means more exploitation of citizens of the U.S. Marx even brands capitalists as having "vampire thirsts for the living blood of labour"(Heilbroner, 155). The government, then, must intervene to help stop this maximization of labor for profit by the capitalist; which means that the government intervention would directly conflict with one of the free market's most significant characteristics: that of expansion and accumulation. Like in England, under the Factory Act of 1850 where factory inspectors were appointed by Parliament to inspect and uphold labor laws, the U.S. government gave workers rights that alleviated some of the abuses suffered because of the lack of regulation (Heilbroner, 177). Today, similar interventions are enacted through minimum wage, child labor laws, workday duration and break mandates, and any civil suits brought to courts addressing sexual harassment or discrimination in the workplace. All of these are political issues, which a market does not concern itself with and is not capable of managing.

Another obvious justification for government intervention in the market that also hinders production and slows the economic growth of business is that of negative externalities like pollution. To take a specific example, the PG&E power plant in San Francisco's Bayview-Hunter's Point district supplies over 200,000 customers with power and is the source of the most amount of air pollution in the area, emitting over 600 tons of pollutants annually, including 164 tons carbon monoxide, 13 tons ammonia, and 12 tons sulfur dioxide (US EPA Office of Air and Radiation, 2004). In addition to the PG&E power plant's emissions, the area contains over 100 Brownfield sites- industrial or commercial sites that are no longer used, abandoned because of the contamination left by those industries. The act is one of environmental racism, for out of the 12,000 residents in the neighborhood, 90% are minorities (Greenaction, 5). The effects on the health of the citizens is drastic, the cervical and breast cancer rates in the region are more than double than others in the Bay Area and the rate of children with asthma is 15.5% compared to the national average of 5.6% (Greenaction, 5). This vicious social cost is what Milton Friedman may have had in mind when he calls for no regulation on "neighborhood effects" because "Every act of government intervention limits the area of individual freedom directly" (32). The freedom of an individual who puts fatal social costs on an entire neighborhood should not be protected. In this case, the government did intervene by mandating the clean up of the areas and coverage of some healthcare costs for the residents, as well as utilizing the Environmental Protection Agency to prescribe standards on air and water pollution. These standards create a backlash against capitalist accumulation and profit by increasing costs for the polluters. The City of San Francisco adopted a Precautionary Principle county policy in 2003; under this, the Board of Supervisors stated: "Every San Franciscan has an equal right to a healthy and safe environment...
The Progressive Era, New Deal, labor laws, and environmental laws all paved the way for a much more centralized government intervention in the market, yielding more authority to the government over the market system. Heilbroner and Milberg, in their book addressing The Making of Economic Society, writes, "authority is the most powerful instrument society has for enforcing economic change" (10). It is the transformation of the State which yielded it more authority that brings us to a new debate of political economy; that of political and market elites and the power that corrupts them. While the power of the State has been declining in the last decade or so, the role of the State in today's society has come a long way because of the calls for intervention, justified by the injustices carried out by and inherent in capitalism. In any social organization, an anarchic system will yield corruption, so it is dangerous to leave it to its own devices. A system of checks and balances must be erected in the organization of society. FDR once spoke of this threat of elitist corruption in the market: "The liberty of a democracy is not safe if the people tolerate the growth of private power to the point where it becomes stronger than the democratic state itself. That in its essence is fascism- ownership of government by an individual, by a group or any controlling private power." The debate mends into one of whether fairness and equality outweigh freedom granted to individuals. One who condones a more equal society may be labeled a socialist, vying for an emphasis on society rather than the individual. Milton Friedman speaks on behalf of the other side of the debate: "a society which is socialist cannot also be democratic, in the sense of guaranteeing individual freedom" (8). Individual economic freedom, however, should not be granted at the expense of injustice. Those without basic freedoms and rights to a healthy and safe life cannot even begin to take advantage of economic freedoms. I condone government intervention to help regulate market failures as well as protect citizens from capitalist abuses and injustice, but I do recognize the dangers of giving the State this centralized authority over the market. But, if the government can intervene to regulate the market, which it must do so, it is up to society to regulate the government's power- a system of checks and balances where the citizens must make sure that the concentration of power does not yield corruption of government. Of course, this is easier said then done, but one may find inspiration in Margaret Mead's words: "Never underestimate the power of a few committed people to change the world. Indeed, it is the only thing that ever has."

Capitalism has destroyed America's moral fiber as well as created divisions that render countless social, racial, and class struggles. Heilbroner and Milberg write on the dehumanizing effect of capitalism: "for a market society to exist, nearly every task must have a monetary reward" (32). Heilbroner highlights the unsociable, greedy values that a market society promotes. The free-market advocates like Smith and Friedman, according to their rationale and values, would promote prostitution; there is no limit to what one can commodify under capitalism. Prostitution has been legalized in some states, but psychologists and humans alike would not contest the belief that having sex for money- solely a monetary reward- is dehumanizing, commodifying one's body into capital. Without government intervention to implement society-based policies to restrict the problems exacerbated and created by a free market, society would not be able to redeem some of its morality. The rise of industrialism has only shown more injustice and demoralizing in American society, justifying stronger government intervention. The inequitable injustice is apparent in the data on the percentage of people living in poverty in major industrial nations: of all the major industrial nations, including Finland, Japan, and France amongst others, the U.S. ranked number one with 19.4% of its population living in poverty, followed by the UK with 14.6% (Heiner, 40). The most capitalist nation, that with the most unregulated market, then allows for poverty rates worse than that of any other industrialized society in the world. Ask yourself this: Do we want to be remembered as selfish, unscrupulous people who advocate an expansive and imperialistic market regime, acting only for a moment's glory; or would we like to gain some sort of respectable, sociable redemption?

Works Cited
Caporaso, James A., and David P. Levine. "Theories of political economy."
Cambridge: Cambridge University Press, 1992. [Reader]

Greenaction for Health & Environmental Justice. "A Toxic Inventory of Bayview HuntersPoint, San Francisco." www.greenaction.org. September 2003.

Heilbroner, Robert L. The Worldly Philosophers. Simon & Schuster, 1999. [Reader]

Heilbroner, Robert, and William Milberg. The Making of Economic Society.
New Jersey: Prentice Hall, 1998.

Heilbroner, Robert, and Lester Thurow. Economics Explained.
Simon and Schuster, 1998. [Reader]

Heiner, Robert. Social Problems: An Introduction to Critical Constructionism.
Oxford: Oxford University Press, 2002.