Post-Capitalistic Free Market Economy – How America Can Be Rescued (Part III)

By admin ~ June 4th, 2011 @ 6:18 pm

After presenting the character of an individual in American society, as its first basic component, we now proceed with consideration of the other two namely private organizations and public institutions. Economic organizations are the subject of our main consideration. This is where the heart of problem rests as far as it relates to democracy and equality of opportunity. Under the domain of monopoly and oligopoly capitalism, which is the main feature of American economy, as concluded by one reliable study, a few thousand super rich (a little over 7,000) control or at least highly influence not only the economy of the country but also its essential political and social institutions such as media, education, and health care.

Control of information system is vital to the economic elite in order to control or influence public attitude about justification of capitalism as well as major domestic and foreign policies. Freedom of thought and speech is essential to a democratic system. There must be a free expression and competition of ideas and symbols. This essential freedom is guaranteed to Americans by the First Amendment to the U.S. Constitution.

In modern society the interchange of information and expression of ideas is to be achieved through the mass media. The American mass media constitutes of about 19,000 radio and television stations, 1,700 daily newspapers, 7,000 other newspapers, 9,000 periodicals, over 4,300 film producers and distributors, and 1,300 publishing companies. But, the elite, through a few business and financial firms controls the three major television and radio networks – ABC, NBC, CBS – and 34 subsidiary stations, 201 cable television systems, 62 major radio stations, 59 magazines, including Newsweek and Times, 58 major newspapers, including The New York Times, The Washington Post, The Wall Street Journal, and The Los Angeles Times, and 41 publishing companies. 75% of the stocks of the three major television networks, where the American public receives most of its information, are owned by five major banks.[1] According to another study, in the long run, the mass media cater to elite individuals and elite institutions upholding their actions and policies. [2] Besides the information system, the elite group, consisting only of 0.4% of one percent of households, controls the economy and government. This control is effectuated through the top one-fifth of the population who are the supporters of the elite family and its beneficiaries.

Consequently, the richest one-fifth of the population owns about 77% of all personally held wealth and have control over 97% of privately owned corporate stocks. Thus, the richest one-fifth has three times as much wealth as the remaining 80% of the population and full control of all major business and economic institutions. Through the control of the governmental process the elite rips off the American taxpayers by the means of government subsidies. Gaylord Shaw of the Associated Press has pointed out that private enterprise in America collects roughly $30 billions a year in government subsidies and subsidy-like aid, much of it hidden or disguised. A government-wide study, undertaken by the Associated Press, disclosed evidence that the total is at least $28 billion a year, and may run as high as $38 billion. [3]

The government’s outstanding loans to private business- direct, guaranteed, and insured- came to about $250 billion in 1973, six times the outstanding credit advanced to business by all commercial banks. The figures may go much higher at the present. The big business gets the big bite mostly away from public attention. The exploitive benefits appropriated by the economic elite amounts to about $380 billion a year or an annual rip-off of $1,700 from every man, woman and child in the country.

The third component of a democratic society is its public institutions. The United States is praised and admired by the foreigners as well as most of its citizens for its political democracy. This perception is not the result of a true representative democracy but the effect of propaganda and conditioning of Americans through the mass media and educational systems influenced and controlled by the elite. A few who are expert in American political system and process and have impartially studied the system would find this claim of democracy far from the truth. They will attest that there is no democracy in the United States consciously supported by the majority of the voting population. The so called “democracy” is a facade, a pretentious process created by the elite to sustain its status as well as the stability for its capitalistic operation and maximization of profits.

To elaborate on this statement we may start, first, with the two major political parties which control all the national and state governments. Both parties are strong supporters of capitalism and are controlled by the capitalist elite. Apparent differences are only cosmetic. Through the control of state governments both parties together have been able to establish harsh conditions for development and success of any third party; and by establishment of single rather than proportional representation districts, they have been able to monopolize the electoral system excluding any hope of success for any minor third party. They can even act to outlaw a rising third party and officially destroy it. This is what exactly happened in the1920s when the Socialist Party developing strong, was able to capture the government of many cities and gain representation in state legislatures. The party was declared illegal, its leaders were arrested, its offices were destroyed and its funds in banks were frozen. It was not until the 1970s that under the Freedom of Information Act the party had access to government archives, sued the government and was granted damages.

Second, mainly because of the control of the two major parties by the elite and their commitment to the capitalistic economic system, people have moved away from these parties ever increasing the size of independent voters, doubling its size during the last 30 years. Presently, more than one-third of the eligible voters consider themselves as independent and the electoral success of any of the two major parties depends on each party’s ability to attract more independent voter. Neither of the two parties has a long range objective and philosophically both are strongly capitalistic oriented. For this reason there is no ideological loyalty to the party, only 5% of the membership take active part in party operation, and members of one party voting for the candidate of another during different elections in not unusual.

Third, whether a party member or not, masses of voters do not bother to participate in the elections- about 52% in presidential, 30-40% in congressional, and 10-30% in local elections. The result has become the takeover of the electoral system and ensuing governmental functions by the elite and major interest groups supporting it. In actual sense, in the United States we do not have majority representation either at the national or state level.

Candidates are selected by a small minority of the eligible voters. For example, if a presidential candidate received 54% of popular vote, when only 52% of the eligible voters actually voted, he becomes elected by only 28.6% of the total eligible voters. He represents a small minority and not the majority of the voting population. In 1980 Reagan received 51.6 % of the popular vote where only 54% of the eligible population voted. It was proper to assume that he received only 27% votes of the total eligible voters. For his second term, he received 59% of the popular vote amounting only to 29% of the total voting population. For the same token, in the 1988 election Bush received 54% or 27% of the total voting population. In 2000 and 2004 elections Bush received 25% and 26% of the total eligible voters respectively. The situation is more tragic in the case of congressional members and local officials.

Fourth, constitutionally, states have control over the electoral process including those pertaining to the national offices. Therefore, states are where nearly all antidemocratic activities rest. Financing the elections, particularly the campaign expenditures by the candidates is mainly controlled by the elite through direct or institutional contributions. In general this is handled by each party in a way that ordinarily over 95% of the House representatives and 86% of senators are continually reelected. Nearly all of them serve the elite family. At the time of any social unrest this Congress passes appropriate welfare legislation by which a few billion dollars is distributed among the poor and lower working class or small farm operators in order to quiet down the situation and maintain stability for the proper operation of the elite institutions. Another serious problem relates to the process of voter registration which is more or less, and at times highly corrupt, in favor of one party or the other. The money for such programs, presently amounting to hundreds of billions of dollars, does not come out from the elite pocket but mainly from those of the middle and working class in the form of additional taxation. Many rich people, thanks to laws passed to protect their income, either don’t pay any tax or pay a very nominal amount compared to the size of their annual income. To show just an example, according to an Internal Revenue Service report, of 529,460 couples and individuals who reported total annual income above $200,000 on their tax returns, 595 paid no taxes while their income averaged $600,000and two out of every three had capital gains averaging 490,000. Another 33,805 having incomes over $200,000 paid only 15% tax, typically less than a middle class family, and 3,000 paid less than 10%.[4]

Another serious electoral problem relates to the process of voter registration in each state which is regularly abused in some states and manipulated in favor of one party or another. During a presidential elections this abuse is estimated to be in excess of two million votes. For example, the studies show that in 2000 presidential elections in florida alone, tens of thousands of Afro-American voters, 90% of them expected to vote Democrat, were deprived from voting through registration abuses.[5]

With all these factual observations, one can easily conclude that there is no real democracy in the United States, at the national level in particular. The effect of such lack of democracy has placed the nation in over six trillion dollars in debt the major beneficiary of which has been as always the economic elite. Over $250 billion a year is paid in interest on this debt by taxpayers money. Realistically speaking, the U.S. President and Congress are both strong supporters and protectors of the economic elite and major interest groups which contribute to their electoral campaigns. The U.S. foreign policies are not based on international law or mutual respect to sovereignty of other nations, but to protect the U.S. capitalistic interests abroad. Any system not sympathetic to capitalistic values is not considered democratic. Such countries are considered not friendly to American policies, therefore, subject to pressure and regime change. For example, U.S. seceded Panama territory from Colombia in 1903 to build the Canal because of the Colombian government’s rejection of the project. It has controlled the politics and economy of the country since. When General Noriega disobeyed, Panama was invaded in December 1989 and an “appropriate” obedient government was installed. Noriega, the head of a foreign country was captured, brought to the United States, tried, convicted and jailed. Granada was invaded in October 1983 to oust a Marxist oriented socialist government. An acceptable government was established under the U.S. occupation. Dominican Republic was invaded in April 1965. It was also occupied from 1916 to 1924. Troops were sent to Mexico in April 1914 to block arms shipments to Mexican revolutionaries. They stayed in Mexico for eight months. Haiti was invaded in 1915 and it remained under occupation til 1934. U.S. Marines were sent to Nicaragua in 1912 to protect the friendly government. Some Marines stayed there for 13 years. They were sent again in 1927 and stayed til 1933 when Samosa was established as the ruler. The Samosa family ruled until the Sandinista revolution in1979. U.S. troops landed in Honduras in three separate occasions, between 1912 and 1926, to protect American business interests. Starting in 1980 U.S. troops were regularly stationed in Honduras in order to protect Contra rebellion forces and impose pressure on Nicaraguan Sandinista government. Between 1898 and 1921 Marines were landed in Cuba on four occasion and remained there for a total of 12 years. U.S. established its present naval base at Guantanamo Bay in 1903. In early 1970s Chile democratically elected a Marxist government and chose Dr. Allende as President. This tended to destroy the U.S. government’s theory of associating Marxism with dictatorship which was the basis of the Cold War policies. The Chilean government had to be overthrown. It was done by the CIA and millions of American taxpayers money in 1973.

These are just some regional examples. The U.S. has followed the same lawless and often utterly brutal and destructive foreign policy, causing thousands of death and distraction of properties, through overt and covert actions in other parts of the world particularly in the Far East and the Middle East, anytime the U.S. elite had substantial economic and ideological interest. For example, the U.S. government efforts, in 1960s, to change the Marxist oriented socialist government of Indonesia, ruled since 1945 by Sukarno, and establish a new friendly system under the rule of Suharto caused a genocide by the new government of over 800,000 mostly innocent lives of men women and children. In just a few months in 1965 more than 200,000 people allegedly associated with Communist Party were slaughtered.[6] Since 2001, tens of thousands have died in Afghanistan War and, according to new estimates, over one million have been killed in war in Iraq, over 95% innocent men, women and children, and 4.5 million have been displaced one half of them escaping to the neighboring countries and the rest becoming refugees in their own land.

Some decades ago the great American Philosopher John Dewey described the American system as follows: “the reactionaries are in possession of force, in not only the army and police, but in the press and the schools. The only reason they do not advocate the use of force is the fact that they are already in possession of it, so their policy is to cover up its insistence with idealistic phrases- of which their present use of individual initiative and liberty is a striking example…. It is absurd to conceive liberty as that of the business entrepreneur and ignore the imminent regimentation to which workers are subjugated, intellectual as well as manual workers.[7] The American political system is not democratic in a true sense. Democracy is used carefully and skillfully as a facade to cover the ills of capitalism and actual control of the system by a very small elite.


1. James Burns et al, Government by the Poeple, 14th ed. Englewood Cliffs, N.J.: Prentice-Hall, 1990, p. 279.

2. Ibid., p. 302

3. United Press International, “Tax breaks Cost Treasury $44 Billion,” Wisconsin state Journal, June 5, 1971, Sec. 1, p. 3.

4. Associated Press, Washington, D.C., “Tax Dodge. Some still Don’t pay U.S.,” Wisconsin State Journal, Sunday, October, 1989, p. 6A.

5. For a detailed documentation see Reza Rezazadeh Electronic Electoral System: Simple, Abuse Free, Voter Friendly, Xilibris, 2002, Chapter 2.

6. World Book, 2001, vol. 10, p. 238.

7. John Dewey, “The Future of Liberalism,” The Journal of Philosophy, vol.32, no. 9, April 25, 1935.

Dr. Reza Rezazadeh

1080 Eastman Street, Platteville, WI 53818

Phone: (608)348-7064

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