Going Places: Capitalism cartoon from 1948
(Douglas Rushkoff, the author of Life Inc., is a guest blogger.) One of the best things about spending the bulk of a decade researching a single topic is how much cool stuff you find. While working on the film version of Life Inc., we became addicted to Internet Archive's film libraries.
This one, a cartoon produced by John Sutherland, defends the principles of capitalism against the anti-competitive ideas of Lefties. The most honest aspect of the film is that it readily admits that for capitalism to work, industry must continue to grow.
For more about this movie, read the background at archive.org
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i rather like the fact that the cop stole the apple
This video is a terrific example of how our current corporate-welfare state is anything BUT fair capitalism.
This is, of course, because over time, manufacturing processes become more efficient, requiring fewer workers for the same output. Short of guaranteeing every citizen a minimum income regardless of whether he or she can find work, we should expect that unemployment will continue to rise unless new products are continually being added to the economy.
An example of this is the dotcom boom of the 1990s. For a large chunk of the Clinton years, we were at full employment. Why? Because the inception of the Internet created a massive demand for labor that otherwise would not have existed. Without this, the economic sluggishness inherited from the previous Bush administration would have persisted for much longer than it did.
Does that mean we never get to just lie in the sun and play video games while the machines do all the work?
@Steaming
Your first paragraph seems to say that more efficient businesses cause unemployment, but your second paragraph says that the efficiencies gained from the internet caused massive demand for labor.
@STEAMING PILE
That's definitely food for thought, and helps explain why, when I look around my average desk-job corporate environment, I see that about 80% of the employees serve absolutely no purpose whatsoever. Process Improvement Managers, Marketing Specialists, and/or other redundant positions that the company can easily afford, despite the bloat that comes with it. Thanks for that perspective.
Hmm, for the era in particular, this is pretty neutral stuff. Pro-market-economy but not really "anti-left". Not to a social democrat like me, anyway.
It does in fact readily admit some of Capitalisms pitfalls (monopolies, syndicates) and readily admits that government needs to 'step in' sometimes. That's one lesson that was forgotten.
And then there's the fact that, for everyone to reap the benefits of capitalism, they have to pay their taxes. Something big businesses in the USA haven't been doing for quite some time now..
The goal of course is to continually add new products to the economy to make capitalism work (which in turn makes industry work, and so on). As Douglas Rushkoff noted above, "for capitalism to work, industry must continue to grow". And the reverse is true too.
It would be nice, however, if instead of employing most workers 35-40 hours a week and some workers not at all, we could employ all workers, say, 28-32 hours a week. Four-day work week, anyone?
Better still, the attendant cut in pay would not result in a cut in buying power relative to the guy nest door if he works a four day week too.
There, I've just solved unemployment AND inflation. Next?
Rushkoff @ 4:
Depends what you mean by "we" - the guy who invented the machines and the guy who owns all the machines will be having a hell of a time... the rest of us? Not so much...
And as an aside - I hope you're not trying to play video games while laying in the sun... the glare is going to give you a headache...
@BROENADAMS
That's exactly what he is saying--it takes innovation and exponential expansion of the current available labor positions. Which is the lifeblood of capitalism. The Internet did this, but now it has run its course, it is "saturated," so to speak, and we have just weathered another attempt to expand the labor-position-pool, via Real Estate and creative mortgage investment. I would wager that this latest "expansion" did not create near the number of jobs as the dot-com boom, but it did create soaring, if temporary, wealth for those working in real estate and/or finance.
@RUSHKOFF
Yes, yes it does.
So the soap maker never got to go fishing?
Some items to note in the video:
A. Property taxes immediately went up. So, even if you didn’t benefit financially from the new soap business, you were punished through increased taxation just because the business came to your town.
B. The cop, who was paid through taxes to protect the store owner simply oppressed a weaker individual under the color of law, while stealing from the business owner himself. Of course, this is not new. The Mafia had similar “protection” plans to benefit business people.
C. Note the guy becoming a successful husband and father is said to be “incidental” to his business success.
D. The entire social/corporate/governmental system appears to be backwards, just as it is today.
AND, worst of all ... the guy who started all this never did get to go fishing.
Alex - M -
I keep forgetting that part. If corporations actually paid their taxes, the system would work a lot better.
You know, when the two businesses are trying to fix prices, haven't they thought of simply buying off the smaller competitor? Not that this kind of stuff ever happens...
What about the part where the super-rich people starts making friends with the government, thus lowering taxes and making sure they don't intervene in their oligopoly?
What about the part where the employees had to strike to get the salary increases and the good benefits, and stop the company owners from pocketing all the increases in their productivity?
What about the invasive patent system that put locks on new innovations, making it harder and harder for new entrepreneurs to use existing technology to cook up a better product?
Just wondering.
And yeah, I like the irony of the cop eating the apple. ;)
If corporations actually paid their taxes
... they would pass that cost on to the consumer, like they do all of their costs.
Lets say he did go fishing, and he caught so much fish he could sell them and over time he could buy a fleet of fishing trawlers and catch every fish in the ocean leaving none left- oh wait-
Unions and communism developed in response to the excesses of capitalism. It wasn't the cure, it was the cause. It is just a system like any other and if it isn't kept under control it will consume you as thoroughly as any tyrant. Remember, the market is there to serve the people, the people must never think they are there to serve market.
Great comments guys, keep 'em coming.
http://www.nytimes.com/2009/05/05/business/05tax.html
Sounds like he is doing exactly what he said he was going to do about closing corporate tax loopholes. I hope he can do it.
Public pressure on the lawmakers wouldn't be a bad idea. The lobbyists are going to be busy putting their own pressures on them, you can be sure.
yeah... depressing. The soap maker(who hates soap)never gets to go fishing and ends up a miserable old man with ulcers.
And an agrarian utopia is converted into a ramshackle boomtown with corrupt cops.
Then little kid at the end finally invents a potent hallucinogen to escape the hell of modern life, and the film ends, Brazil-like, with him happily trapped inside his own mind.
In this imaginary world, the United States is an island continent, so no need to worry about losing jobs to mexico.
When I worked for the paisans, every morning around 6AM I'd drive past every single gas station within ten miles and note their prices. Then we'd set our price exactly one cent under the lowest one. No collusion was ever on paper or on the phone, that's just how we did it.
We got into price wars several times, but since our gasoline was delivered after midnight from a truck that had no state or federal tax stickers on the tank and none of the legal paperwork from the refinery we could handily undercut most competitors. The one time we had trouble and got down to taking a loss, it was from another gas station that was actually a money laundry, and the boss sent a few guys over to have a private talk with their owner and the problems went away.
We used to pay off the local inspector for the "cleanest bathrooms award", too - won it six years running. To be fair we did have very clean bathrooms, I used to pressure-wash them floor to ceiling every day... which was extremely necessary. Oh, bad flashbacks, I better stop now. Anyway, that's how capitalism works in the USA, caveat emptor.
@12 DeWriter
You beat me to the punch... dude never does get to goof off, and what is all this socialist mumbo jumbo about property taxes improving the local govn't... know good capitalists hoard all the profits for themselves.
It's definitely implied that in order to get the beautiful wife, the guy has to get back in that workplace until he MAKES IT and until then he is UNWORTHY OF LOVE.
This is one of the carrots of the current system, and the apple-stealing copper is holding one of the sticks (see London G20 protests for recent examples of this).
See the violence inherent in the system! Help! Help! I'm being repressed!
Anyone remember the cartoon "By Word of Mouse" (http://www.bcdb.com/cartoon_information/3756-By_Word_Of_Mouse.html)? It was paid for by the Sloan Foundation (same fellow as the MIT business school I assume). It is basically a lecture on the importance of reinvesting profits in the business instead of cashing in the profits. It points out that doing so helps everyone including the workers and the company. Sylvester chases them around briefly for some cheap laughs.
I find it ironic that business executives today feel it is acceptable to loot the company's profits for bonuses, perks, and options instead of reinvesting them. Sadly we need to relearn some basic values that appear to have been lost.
Dewriter, the tax RATE did not necessarily go up - the cartoon clearly meant that property tax RECEIPTS go up due to the local population boom.
This is because all the farm-girls and farm-boys are coming to the big city to make their fortunes. The family farm meanwhile falls to ruins, and many of the girls wind up as prostitutes after their married-man bosses get tired of the girls' inability to type or they become pregnant with his child.
This cartoon inspires me to make my son go learn how to fish. Damn kid never gets up from the computer.
One other fact they mention in the piece:
"When investors receive fair dividends they are eager to supply industry with a steady flow of capital..."
What seems to have been lost since then is the idea that if you bought a stock in the 50's, you made your money over time on the dividends (because stocks are supposed to be a long term investment), and when you sold it, the difference in value was merely an unintended bonus. At some point, traders realized that the true value was the Homer Simpson corollary ("Everyone is stupid except me"). Sell the stock when you think it's at a max, and find someone dumb to take it off your hands. Easier to do today by pawning it off on some poor 401k schmuck who wouldn't know what stocks were in their portfolio, anyway.
If I had to finger one moment when capitalism went off the rails, it was when more value was created in a trade vs. value created building a business and sharing profits with investors and workers (which, nowadays, sounds quite Commie Pinko anyway).
Too soon after our economic collapse for me to stomach something like this.
Wow. So much "real world" missing from that.
That showed a corporation a) happily paying its taxes for the betterment of society instead of constantly demanding that their burden be cut, and b) increasing jobs and salaries while providing more and better benefits instead of demanding worker concessions on wages and cutting benefits while paying themselves bonuses equal to many multiples of the average worker's wage.
Let's continue the story. Eventually, the soap industry grows to point where a handful of companies are manufacturing all the soap the country needs. Now what? Now begin the ad campaigns that get people to believe they need more soap than they actually need and sales grow some more.
Next the powerful soap industry lobbies the government to require the use of their product in government buildings and military bases both at home and abroad. Handwashing laws are proposed to "keep the country safe." After that they use lobbyists and campaign contributions to convince lawmakers that the effluents from their manufacturing process aren't carcinogenic enough to require regulation. This reduces expenses and increases profits further. The biggest companies also propose stringent, expensive soap testing laws, providing a huge financial hurdle for any new competitors in their market
Next the two biggest soap companies merge. The top execs end up with hundred million dollar paydays. The new company takes on 17 billion in new debt to pay for the merger, 20% of the staff are laid off, 6 factories are closed, concessions are demanded from labor, wages and hours are cut, but production targets are raised. Productivity must be increased in order to service all that debt.
With so much job loss and disruption people's consumption declines. People realize that they're buying twice as much soap as they really need and start cutting back. Sales plummet, losses mount and the giant soap company declares bankruptcy. Shareholders are wiped out. Retirement plans are devastated (employees were encourages to buy, buy, buy the company stock for their 401ks). Because Soap City relied so heavily on one industry, the economic base is shattered. Families lose their jobs and their homes, entire neighborhoods are abandoned, crime is rampant, and the local government is unable to provide even basic services.
It would have been better if, somewhere along the line, the guy had gone fishing.
When the town expanded into a city it looked an awful lot like Sim City...
@FLYNN
I could tell something was very wrong with Capitalism when the sold the idea of "trade" to the common 401K investor as a money-making device. People in the cubicles around me were playing day-trader cames with $500 on e-trade like it was some kind of lottery. A lottery where the odds of winning were greater than 50%--so long as you got out before the big October crash(es).
The poor Fudsy reminds me of a story Utah Phillips used to tell.
There I am in Spookaloo, city of magic, city of light, ensconced upon my front porch in broad daylight — long about noon, my rising time — drinking something of a potable beverage, playing my guitar, long after everybody else in the neighborhood has packed up their lunchbox and gone off down to Kaiser Aluminum to put in their shift. This enrages my neighbors. One in particular across the road, little retired banker fella, has been known to cannonball his rotundity across the road, and stand there and publicly berate me for my sloth and indolence.
"Why don’t you get a job?" he says. Lot of you heard that, I’ll bet.
Now, me being hip to the Socratic method, fires back a question. "Why?"
"Why?" he says, taken aback. "If you had a job you could make three, four, five dollars an hour."
I said "Why?" I asked, pursuing the same tack.
He said, "Hell, you make three, four, five dollars an hour, you could open a savings account, save up some of that money." I said, "Why?"
He said, "Well, you save up enough of that money, young fella, pretty soon you’ll never have to work another day in your life."
I said, "Hell, that’s what I’m doing right now!"
—Utah Phillips (1984), in the middle of his performance of Hallelujah, I’m a Bum! on We Have Fed You All A Thousand Years
@BISHOPHICKS
Then the government steps in. Convinced that the entire economy is teetering on disaster, they do the only thing they have been told by Soap City that will work--they issue massive cash infusion to Soap City in hopes of propping them up with new investment capital. But Soap City can see that investing in new jobs will only lead to a surplus of soap and more of the same problem. All of the market research indicates that Soap City should fail. So instead, they use the billions of dollars to pay back-bonuses and salaries to executives.
@BRETTSPIEL
That is a version of the Mexican Fisherman Parable, but a bit shorter and hastier. See here:
http://mrmaloney.com/mr_maloney/SHSdocs/fish_tale.html
Makes me wonder if the "profit motive" is an innate human trait...
Capitalism doesn't of course work like the fairytale there.
Bosses will pay the least amount they can get away with as we have seen in the real world. It is Unions that have gotten higher wages, the weekend, health insurance etc etc. Now that they have out sourced all the labour weakening union movements we have seen wages stagnate and even go down, poorer conditions, etc etc...
Competition doesn't also work 9 times out of 10 either, as we say. Markets are usually filled by a few big guys and that's it. All effectively offering a similar product at a similar price.
A fraction of people ever 'live the dream' make it rich or whatever. Millions suffer for a few to proposer, is that ethically right? I feel not...
Rushkoff: "Does that mean we never get to just lie in the sun and play video games while the machines do all the work?"
I just read Rebecca Solnit's wonderful 'River of Shadows,' in which there is a terrific quote from (iirc) Leland Stanford, the gist of which is: technological progress could give us ever-increasing leisure time. But given human greed, it instead gives us ever-increasing profits.
I would check the actual quote (and source), but I already took the book back to the library. Darn!
Eripitur persona, manetres; we take pains to heap up things useful to our life and get our deaths in the purchase; and the person is snatched away, and the goods remain. And all this is the law and constitution of nature.
-Jeremy Taylor (1613-1667)
Capitalism would be a perfect system, if it wasn't for all the stupid humans that screw it up.
Heinlein gave the perfect solution to the "running out of things to do" (and thus having to lay off people through increasing efficiency) problem. Simply make up harder and more esoteric challanges, and accept that not everything beneficial to society needs to be around food and shelter, or physical work.
In other words, if we need to commit to massive projects that tie up lots of manpower (both intellectually and physically) like a flight to Mars or replanting whole forests - that's perfectly fine, as long as we keep making sure there's actual benefits to society ("gainful employment" in a different sense).
Kapitalist fantasy land. Why don't they "Galt" themselves to the bottom of the sea? Make their own "BioShock" society? Despite their fantasy, we can live without them.
No "Big Ag" business means that Judd the Farmer gets to grow and sell tomatoes from his garden at the local supermarket, as does the homeowner with a surplus. No more "Sell to big ag at the prices we dictate" no more Tomatoes grown in the "Repulico Del Worthlessia" that despite being flown 1000 miles to the store cost 1/2 of what the local farmer could grow them for.
No "Music Industry" means that any artist can get on the radio, get his music in the stores and if he's good get very popular and even some of the obscure or moderate ones can still find a 'niche' if there's no executive to decide who'll be the next big thing (till they throw them away) and who will never be heard.
No manufacturer to move jobs overseas and then because that costs more get our tax dollars to pay for "Tax breaks and subsidies" to make a profit. Without that the demand for said products will be filled by smaller companies who'll buy the abandoned factories to re-start.
We need wealth caps. I'd trade the 'right' to be a billionaire to have a healthy middle ground of being a multi-millionaire or better much much more likely I can easily (with years of hard work and reasonably frugal living) have $100,000 in the bank.
23 Skidoo!! I still don't have a good answer for what it is, but in this video it's a pickup line?
It was a cute video, but I still don't like that the core of basically the way of life the majority the worlds population is based around greed and selfishness. As that seemed to be the driving purpose of everything in the video.
Tyler Durden makes soap...
Here's another one: http://www.archive.org/detail/make_mine_freedom_ipod
Incidentally, this and the one above were made by Harding College (now University), a Church of Christ affiliated college in Arkansas.
http://en.wikipedia.org/wiki/Harding_University
In all the ways mentioned above and more, this cartoon subtly undermines the arguments it appears to proffer for free market capitalism--either out of incompetence or an impressively intelligent and biting satirical wit.
To those who think they can establish a beachhead here in the war against capitalism, may I remind you that it is a cartoon. I believe things called books are currently the accepted mode of thought transfer.