To understand why the economy in America is not doing well, we must first understand how the economy works, as in the mechanics of capitalism and what this entails. There are many factors, which show without a doubt that capitalism is beginning to reach a point of saturation, of markets abroad and at home. There also happen to be a rash of corporate and governmental decision that would lead one to believe that capitalism in America no longer has the advantage of labor, or capital. Simply put, America is beginning to drown in a tactic of over-saturation that it used to gain control of commercial markets in the first place.
Capitalism is a system in which competition is complete, where the fittest organization (the one with either the capital or labor advantage) will gain a controlling stake of the market. In this system, efficiency is essential, as it keeps down the labor costs, and capital is essential in that the more of a product that is produced, the cheaper the cost. And so, capitalism lends itself to large assembly line operations. This gradually makes labor more and more specialized, and in many cases, less and less valuable.
Capitalism must be ever expanding in order to be equitable, since the profit it garners comes from an advantage over the competition. For years America had the advantage because it would cost more to produce a good in a foreign location than it would to produce it at home, and sell it either at home, or abroad. Eventually, the technological gap is closed, and the cost of transportation is continuing to drop. In other words, America is the ripe new market for capitalists to profit from. Just not for Americans.
The signs of this are not tremendously hard to see if you can look past propagandist smokescreens. The reason why corporations keep on outsourcing labor is because American markets have become incredibly saturated. To even hope to compete in a mainstream American market a company must have hundreds of millions of dollars in capital. There is very little room for expansion, and quick growth is not possible except in niche markets. This creates a situation where corporations must find new markets, or try to more efficiently resaturate current markets by getting cheaper labor. Government is thus forced to lower environmental restrictions, give out lucrative contracts, and make many policies that favor the holders of capital.
The next ten years is going to be a terrible economic disappointment for Americans. China, India, and South America can all produce the same goods for less money. Capital will seek the most profitable path, and the American worker will see his influence in the global economy evaporate. In time, labor wages will equal out, probably with Americans earning less, and other laborers around the world making much more. It is the mistaken impression of economists and the Bush Administration that the economy will just get better, or that by lowering our labor standards the situation will go away. It won’t.
It is my impression that within 50 years, all world markets will be saturated. And what then? What do we do, when in the farthest corners of the globe one can drink a coke, eat a big mac, and shop at wal mart? We basically have no way to avoid this situation. If we stop outsourcing and buying from places like China, our corporations will lose massive amounts of money. Capital does not go against the grain. And what will happen at this point? Well, if not a complete economic crash, than certainly a retooling, and shrinking of all major markets.
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