Answea the question

American Society Week 2 Online Notes Chapters 3 & 4 Hi! This is our first full week, and we will get going on the News Discussion Board this week. Students in Group A should post an article for discussion by Tuesday @ midnight, and then responses are due by Saturday @ midnight. Everyone, make sure to review the DB Guide in the first module before choosing articles or writing your responses. A note about the film this week: The main film this week is “Saving Capitalism,” by Robert Reich. I am a big fan of this man and his political perspectives. If you are not familiar, here is the wiki about him and his website, he has been in govt for many years: https://en.wikipedia.org/wiki/Robert_Reich https://robertreich.org/ If you have not seen it, his first documentary, “Inequality for All” by Robert is also a great match for our materials, but I decided to ask you to watch his more recent film, “Saving Capitalism.” It is more about history and brings it all into context of now. As well, I saw the short film “Explained: Billionaires” and thought it also had a lot of interesting info about how the very rich are different than decades ago and the impact of the very wealthy on the overall economy. I hope you will find these interesting. In the next 2-3 weeks, my goal is to present information that grounds you in what our economics and politics are or “should” be, according to our own stated principles, laws, policies and history, as well as expose you to stories of how that has gone (or gone wrong) in very important ways. My Comments/Additions: The Market: How it Supposed to Work and Actually Works Just as a head’s up, there can be a lot to look at in my notes, use your interests to guide you in terms of what you take the time to further explore the links I provide. Up first this week is a chapter on how capitalism is supposed to work. This is essentially a review of how capitalism operates in our society and some of the reasons/arguments for the good and the bad of it. Read this chapter carefully, as it explains our unique system of capitalism well. It is important to me that you understand that whereas our economic system is dominated by capitalism, it isn’t purely capitalistic. As stated before, if it were, we’d have no social safety nets and no publicly funded resources (such as libraries). Some Basic Economic Concepts: I wanted to give you a bit more basic info on economic systems, as honestly I didn’t know some of these definitions and such as I am not an economist. Also, I feel as if we’ve been throwing around

capitalist and socialist in our media and politics to the point where we’ve lost sight of what these are, and also confused them with other economic concepts and realities. Now, if you are well versed in economics, this may not be interesting or new for you, but if not I think this will make you feel much more knowledgeable about markets and economies. As I said, I am no expert here, but I have found a couple of webpages and videos to help us learn: One thing I felt might need some clarifying from the text is Market Economy vs Capitalism (referring to the text discussion on p. 39). Interestingly, I found that Investopedia has very straight forward definitions of a lot of economic concepts. Since we are not delving too far in this and it’s not a debatable topic, just some definitions, simple is good I think…. Here are links to look at: Market Economy vs Capitalism: https://www.investopedia.com/ask/answers/042215/what-difference-between-capitalist-system-and- free-market- system.asp#:~:text=They%20both%20are%20involved%20in,wealth%2C%20or%20goods%20and %20services. I also feel as if Socialism/Communism is thrown around when we talk about having more planned parts of our economy. Again, not the same. There is a spectrum from market (again associated with capitalism) economy to a planned (associated with socialism) to a command (associated with communism) economy. I think seeing it as a spectrum of control (the spectrum being between control by the government/public resources to control by the market/privately owned resources), helps us look at the choices we have. And helps take away the stigmas of the terms and the black/white thinking about them. I found this quick video that goes over it quite clearly.. it’s a little cheesy at points, and they talk really fast but they go over a lot of good info: Video: https://www.youtube.com/watch?v=B43YEW2FvDs Investopedia page: https://www.investopedia.com/ask/answers/100314/whats-difference-between- market-economy-and-command-economy.asp ~~~~~~ Jumping a bit forward in the text, one issue that I think is very important to consider is how we provide public goods, important goods and services that would not necessarily be provided by a free market system. This was mentioned in the video as well, and comes up on p. 60 of the text. Some of those who believe we should have a more free, less regulated (or maybe less subsidized) capitalist society argue that private entities could offer some of these public goods through charity. The idea is that rather than the government or our taxes funding things like food banks and libraries, non-profits could provide all of those. That may be true, but in reality I am not sure what the incentive would be…what would motivate them? Non-profits are actually partially supported through the state in reality, through tax breaks. And as you know, many wealthy people who run large charities do so in part to get tax breaks- to off-set their wealth in order to pay less taxes. So, I guess I feel as if a system that relied on non-profits for public services would still have to offer things like tax breaks, and to me that means we are still paying for that publicly. It may cost the public less, but then we lose control of what is offered. Who would those non-profits choose to serve? Since

having a non-profit is and would be a means of marketing for firms (many corporations advertise their community service projects as a means to market their company and products), what projects and whom they helped would be largely dependent on what social issues and people were deemed “worthy.” I see this in advertising, how all of the sudden some company has makes ads with themes of human rights, environmental concern, or equality (lots of companies now show diverse folks in their ads purposefully). Whereas that isn’t a bad thing, it just comes and goes with whatever issue is being discussed at the time, it doesn’t mean that company is actually putting money or support into organizations that help those folks or causes. Also, again there is always a profit motive then. Why would a corporation make a non-profit to help the poor when they are unable to actually spend money on their products? Or would they start something such as a non-profit to help abused animals to appeal to animal rights, since that is a popular issue in the middle and upper classes? I want to touch upon other topics in chapter 4, though, where the authors discuss further the ways our market actually works out, with a focus on whether or not our system enables the values we have and allows for society to work as many of us wish it would. A couple of values/moral considerations are highlighted here. One is the amount and types of freedom we have and don’t have in our country, the other is how much does or should our system encourage a sense of the “commons”, or public pooling and sharing of resources. Many of us lament that it seems like people have lost a sense of community or of “doing for others.” This chapter, along with the more specific examples of the environment (and other examples as we move on in the course), explain how our system doesn’t much encourage community, or working toward long term solutions to problems that help everyone. Our system generally encourages individual (or corporate since they are legally considered individuals) choice and consequences, and a heightened sense of self-interest. Many people believe that the problem of not being bonded as a community, not helping each other, or not sharing is a strictly moral issue. That we’ve had a failing of cultural teaching, that our culture is to blame, such as the argument that it stems from the loosening and lesser participation in religion, for instance. In this unit, we can see that the way our system and economy works actually undermines those values in some cases. And this, my students, this is the core of Sociology. The environments, in this case our economy, influence our regard for one another, our sense of right and wrong, and how we then act in society. There is a lot to consider here. Below, I have picked out a few main topics with examples to help emphasize them. I know there is a lot covered this week, so use your own discretion in terms of visiting all of the pages I link or following my examples into the details. If you get the main point, that’s what important. Selected Important Topics from Chapter 3/4: Negative vs Positive Freedom: One very interesting and important thing to learn in this unit is the difference between negative and positive freedom. The difference between negative and positive freedom is a really important thing to ponder, and I hope you will, because this underlies many of the political arguments we hear between conservatives and liberals. In fact, I find it fascinating how many of the political debates

are really, at their core, arguments about these systemic –based contradictions and issues, rather than political perspectives. I want to further discuss the freedom concepts for a moment. To reiterate, negative freedom is the freedom from coercion, so you are not forced to make any certain choice. Positive freedom refers to your realistic or actual opportunities for choice. I’d like to link these concepts to actual American ideas/values. I think we can safely say that a real example of the positive freedom concept in our country is “equal opportunity.” This is a value that we often hear espoused as one of the wonderful things about living in the US. You can be born poor and through the power of equal opportunity, make yourself a huge success in your life. Your choices are unlimited. On the other hand, the concept of negative freedom is used in many arguments promoting an unregulated market. The stance taken by in this line of thinking is that “no one is forcing you” to buy certain products, or even to work at a certain place. In a purely unregulated market, no one would be forcing a minimum wage, nor forcing workers to work for that amount of money. That is the essence of negative freedom- no coercion. But, there are many kinds of “hidden coercion” that impede true freedom in an economic/political system. Let’s look at a few examples: One example can be seen in the issue of labeling products for safely and ingredients. Companies have been known to argue that anyone has the ability to research a product to find out its quality and safety, so they should not have to spend money on labeling of products for consumers. But, does everyone really have that ability? Yes, in theory we can all go do internet research at the library. But, do you have time if you work 2 jobs? Do you know how to do this if you didn’t finish your education? Did your school teach you how to use computers well (yes there are STILL very poor schools that lack in computer skills training, usually due to the fact that the school can’t afford the computers). Do you know what the ingredients even are when you see their names? How many of us know what maltodextrin or any of the other crazy ingredients in our food are? These issues show that in some cases having the freedom to do something does not mean you actually can. That being “free from coercion” does not equal having access to all of the choices.. Here is a good example- no one knows what flavors LaCroix! https://www.wired.com/2016/12/heres-lacroix-addictive/ Another idea that many of us have is that we are free to spend your money how we want and therefore control our quality of life that way. Again, are we really? The less money you have, the less freedom you have over how it is spent. For instance, imagine you need to feed your family and don’t have much money. Are you going to buy the top ramen or the chicken noodle soup? The ramen is probably about 25 cents, the soup a dollar or more. They are similar in taste and probably about equally filling, but the ingredients and nutritional info shows the reason for the difference in price. Ramen has way more saturated fat, sodium and carbs. The fact is, it costs more money to eat better in our grocery stores. And this isn’t just eating fancier, tastier foods. This is about access to natural foods, healthy foods like produce, and better options for eating out health-wise. There is a reason that obesity is way more predominant in poorer people, they often can’t afford the better foods. Now, there are some cultural and educational factors in the high obesity rate of poorer people, but mostly it comes down to access to good nutrition. Same goes for making the choice to

eat all organic foods. You have the right to eat chemical-free foods, but do you have the opportunity? I know I can’t afford all organic foods. Again, having choices that are roughly equal to others is the concept behind positive freedom. You are not only free from coercion, but have equal access to resources like your fellow citizens. Education: Funding = Positive Freedom One arena in which I totally believe we should and can make this true (without fundamentally altering our system) is in k-12 education. As it stands, we are guaranteed some form of education until we graduate high school, and there are some standards to graduate. But, the varied status of schools, especially elementary schools, makes the outcomes of education wildly different from place to place. Facts about K-12 spending and outcomes: Per pupil spending and other interesting numbers: http://www.k12.wa.us/AboutUs/KeyFacts.aspx (Washington kinda sucks at rank #39 nationally) It seems logical that a student in a state spending $17,000 per pupil is getting a better education (if nothing else than by access to better technology and resources), than one in which spending is $8000 per pupil. That’s huge difference, and if you look, those differences are not all accounted for by the relative differences in costs of living in each state.

One of my personal observations about this happened as I grew up here in Washington. I attended 2 different school districts that were less than 20 miles apart in South King County. At one school, fundraisers were needed just to buy mats for the gym (remember selling chocolate bars?). All of our equipment was old, the teams had hand me down uniforms, and the textbooks were ancient. Then, I moved into a nicer area. This school had all brand new sports equipment, with full pads and uniforms for sports teams, even an automatic ball pitcher for the baseball team in junior high! Even as an 8th grader, I was stunned by the difference in quality and amount of supplies. Here’s the reason: The amount of money per student that is spent in basic education costs varies in our state by district from $3,000 to 24,000 per year. Here a link to a bunch of Washington state education statistics for more details: http://data.k12.wa.us/PublicDWP/Web/WashingtonWeb/Home.aspx -there is a lot of interesting info there, you just have to look around a bit and figure out what they are listing-the titles of some of the reports are a bit unclear. In the case of education, if we were to even out the spending per pupil in our educational system, we’d be much closer to providing equal opportunity/positive freedom. Of course, that would not solve everything, but it sure would make it possible to have better and more consistent standards and resources in our schools. Back to Freedom and the Economy: Supply and Demand I’d like to consider a couple more examples about freedom. In the philosophy of the free market, commodities (anything that can be exchanged in the market for something else) are said to be

“regulated” by the market. This is the idea of the “invisible hand of the market.” Here’s more about that:

Invisible Hand: A term coined by economist Adam Smith in his 1776 book "An Inquiry into the Nature and Causes of the Wealth of Nations". In his book he states: "Every individual necessarily labours to render the annual revenue of the society as great as he can. He generally neither intends to promote the public interest, nor knows how much he is promoting it... He intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for society that it was no part of his intention. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good." Thus, the invisible hand is essentially a natural phenomenon that guides free markets and capitalism through competition for scarce resources. *From answers.com There are limits to this invisible hand, we need to think further about it: The basic idea is that people will pay what they are willing to pay for an item based on want, need, etc. That’s demand, and this philosophy says that demand will set prices and keep them from being over inflated because if the price becomes too dear, we won’t pay it. This does work in some cases. The newest computer gadget is most expensive when it comes out, and then as demand decreases its cost goes down. Some companies have figured out how to stabilize this. For instance, the Wii was the same price for years, because Nintendo made sure not to overproduce and therefore kept demand high.

But, what about necessities and labor? When it comes to things we need, like water, flour for baking, etc, what invisible hand controls these? We’d all pay as much as we possibly could if we needed water, right? In my assessment of the principle of the invisible hand, when something is needed the supply and demand model doesn’t fit. The issues of privatization of water and wages provide some examples to the possible limits of the invisible hand. Water: Aside from the issue of bottled water addressed in the film, there is the bigger issue of who should own or control the allocation of water, and the fact that water is being turned into a commodity very quickly. There is a very good documentary called, “Flow” that addresses this issue on a global scale if you are interested in knowing more. Should water be privatized or is it a public good? What would be the pros and cons of each?

I found a debate about this on a website I hadn’t known about before, Debateopedia. It has a ton of info as well as links to more info and is laid out in a very cool manner. Please take the time to read over the basic arguments on each side and think further about it in context of freedom and our ideas about rights. Here’s the link: http://idebate.org/debatabase/debates/environment-animal-welfare/house-would-privatize-supply- water Actually, if you want to see a really straightforward and quick look at the issue of water, watch episode 1 of the show “Explained” on Netflix, called “The World’s Water Crisis.”

Labor-Supply and Demand: Labor is another issue that I don’t think works with the supply and demand model. Sure, we generally pay people more who hold jobs that are in high demand, require a lot of training and schooling and take higher levels of intelligence and risk. But, this doesn’t always pan out. Teachers make less money than many comparable professions (in terms of education and skills needed). I just did a little comparative salary research, and actually found that a garbage collector has about the same salary range as a teacher. So, we cannot count on the idea that getting educated, etc will result in better market position. Minimum Wage arguments as example: Whereas there has been a lot of talk and social movements pushing for raising the minimum wage (and many have won, especially locally), conversely a lot of libertarian thinkers/politicians argue for the abolishment of the minimum wage. The argument here is that there will be an invisible hand keeping wages from falling too far. Here is a brief article that summarizes the main argument for this notion. http://kschang.hubpages.com/hub/How-to-Stimulate-the-Economy-Abolish-Minimum-Wage

This idea, in my analysis, denies the importance of one’s social class position in how much power he/she has over work. In reality, there is no low point of wages. If you cannot feed your family, there is no amount of money that will be too small for you to work for. Laborers only really have the power to demand better wages by group force (strikes, etc), unless they already have power of some kind individually. In other words, if you make good money and have enough saved up to live in case it backfires, you can threaten to quit if you do not get a raise. You can also spend unpaid time shopping for a better job/wage. But, if you make a low wage, have no savings and are supporting a family, you are pretty much stuck getting what you get.

Also, I truly do not understand what wages are for if not to live. One of the arguments laid out here is that the minimum wage hurts the creation of jobs, which I assume means that if wages were ½ as much, we could generate twice as many jobs. But, what I don’t understand is how people then live with those wages. What’s the good of solving unemployment by making jobs that cannot support us? -This is my personal reasoning, I know that some of you may disagree that all wages should be at a living rate. One thing I could go for, though, is making the minimum wage only applicable for those over 18. One of the points from the link above is that teens and interns have their opportunities limited because of the minimum wage. I do think it may be better if we took those who do not need to make a living wage out of the equation so that these entry level positions could be expanded. One possible negative result could be that then those young people are hired instead of adults needing to support themselves, but I don’t think that would be a huge problem, because many jobs require that you be 18, because of liability and legal obligation. For instance, a lot of restaurants can only hire those under 18 for certain positions because of safely laws-you are not allowed to run some of the machines and also you cannot serve alcohol. I also think there is a denial of the power of corporations/firms in these arguments for no minimum wage. For instance, the assertion is that small businesses lose out because they have to pay workers these big wages. But, if there is no minimum law, doesn’t it make sense that the large corporations would still have more money to pay bigger wages? So, they would still draw more workers in this way. Small businesses may be able to draw workers in other ways-through values. Small business

are often more rewarding psychologically-employees are closer and work time more flexible, etc. But, at the end of the day wages are why we work, so I am not sure how much that would help in the big picture. The Power of Large Corporations: In chapter 4, the section entitled, “Problems Internal to Markets,” the authors discuss the ways in which the market produces inefficiencies and problems for citizens.

There is one overarching question I would like to pose to you about this overall. Supporters of unregulated markets rely heavily on the arguments you read about (state incompetence and malevolence) as reasons for why a free market would be better. But, I ask you, how do these same problems NOT apply to large corporations? They are also huge bureaucracies with pervasive corruption. We have seen this at play several times in recent history with the fall of Enron and the housing market crash. In essence, stock brokers and other financial dealers at these huge firms made their own type of accounting that resulted in huge money for them at the expense of both citizens and the overall economy. Whereas both individual politicians and corporate executives can be corrupt and not care about the costs to other citizens, there is a difference in looking at harm to citizens in comparing large corporate and government systems/bureaucracies. Let me try to explain:

Now, this may be naïve and I know it doesn’t always pan out in reality, but the underlying morality and philosophy of our government (that we virtually all agree upon), is that the state exists to protect its citizens. How and to what extent it does this is what we debate upon. For instance, libertarians really just apply that to military and protecting us from foreign invasion/war. To the other extreme, some want to state to provide help to those in need or help for health and equal opportunity. This is the notion of democratic socialism, which is what many of the European nations have. Regardless of how you see it, protecting the citizens is a core value and stated moral imperative of the government. But, corporations have no such moral background or imperative. The market is about competition, not care. So, we could not expect, or as a citizenry, or demand that they treat workers or the economy we depend on with care.

I encourage you to think about, then: How would we prevent corporations from abusing the environment, workers, etc, if there was no government regulation? Do you really think we have the power, as individuals, to pressure these firms with our consumer spending? So much to think about, so many ‘what ifs”!!!!! To finish up the topic of the market, I have a couple pieces of information I want to share here. These just speak to the power of corporations in our society at this point, even with regulation.

1 ~ The following chart shows that as corporations have made larger profits, their expenditures on wages have decreased.

Here’s one article on this: https://www.nytimes.com/2018/07/13/business/economy/wages-workers-profits.html 2 ~ The following is a wikipedia page but the info does come from the government. It’s just a lot

easier to read and understand the charts as presented on the wiki page. This explains both where

the national budget comes from and what it is spent upon. Notice the burden placed on individuals

vs. corporations in the second pie chart, I think that is telling.

Budget Spending and where the money comes from:

http://en.wikipedia.org/wiki/United_States_federal_budget

*Note in these charts how what is really killing us is the national debt-where it says “net interest” as

a budget category, it represents how much we spend paying interest on that national debt.

In sum, the point in showing you these is not so much to vilify corporations, but to show that there

isn’t any evidence that the market is keeping things in check in terms of stabilizing our economy for

us as citizens. Nor are there strong governmental regulations to make the corporations maintain a

standard of wages and benefits for workers.

Next week, we will take a minute to digest and apply some of this by looking at the history of

transportation and the role of consumerism in our market and society….see where the issues turn up

and how.