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Obama’s Campaign Promises and the Laws of Capitalism

Throughout his campaign, Obama made repeated overtures to working people. He talked about job creation, a tax cut for the middle class, health care, education, the rescinding of the lavish tax cuts for the rich, clean energy, facilitating unionization, and the elimination of the "Don't Ask, Don't Tell" policy for gays in the military. One got the distinct impression when he was campaigning that Obama was oriented to helping ordinary working people, who are now struggling to pay their bills, not the rich.
But Obama is also an enthusiastic supporter of capitalism. And so the question arises, will his dedication to capitalism allow him to keep his promises to working people, or will they be tossed by the wayside like so many other campaign promises made by politicians, particularly Democratic Party politicians? In order to answer this question, one must have a clear conception of how exactly capitalism operates.

The Nature of Capitalism

One of the most basic and defining features of capitalism is that the number one priority of every business is to make a profit. But in order to make profits, businesses must compete against one another every step of the way so that it is a world of the survival of the fittest. For example, and perhaps most importantly, each business strives to lure customers in its direction and away from the competition. Of course, the most effective way of attracting customers is to sell products at a lower price without sacrificing quality. Consequently, businesses are engaged in a relentless impulse to lower production costs because, to the degree they can be cost effective, they can pass the savings on to the customers and win their patronage. Wal Mart became the largest company in the world by implementing this philosophy: they consistently undersell their rivals and win a lot of customers in the process.

But one of the key costs of production in most businesses is the cost of labor. Consequently, in order to survive this life and death competition, businesses struggle to reduce their labor costs to the minimum, and management has devised a whole array of tactics to accomplish this goal. For example, they convert full-time workers into part-time workers with less pay and no benefits. They lay off some workers while requiring the remaining workers to perform additional work. They slash the pay and reduce the benefits of the workforce. Or they pack up and move to China where the cost of labor is incomparably cheaper. Or they replace workers by machines or computers. Or they terminate the traditional pension program in favor of 401(k)s. And the list goes on.

This dynamic then constitutes Problem #1 of capitalism: Working people, who constitute the vast majority of the population, are placed in a sustained state of stress as we live in perpetual fear of losing our jobs or suffering a cut in wages, or losing our health benefits or retirement. In other words, the economy, in a fundamental way, does not operate in the interests of the majority. It operates in the interests of making profits, not in the interests of working people.

But there are additional problems. Because capitalism operates in such a way as to minimize wages and maximize profits, it introduces a tendency to increase inequalities in wealth. That is, the owners of the businesses get the profits and become richer. Workers, on the other hand, seem to come home with less and less each year. Of course, workers have at times offset this tendency by organizing themselves, for example, into unions, rising up, waging a strike, and disrupting the system by demanding more. But under normal operating conditions, the decline in workers' standard of living persists. There are many statistics that testify to this tendency, which has been at work since the 1970s when global competition began to take off, but here is one example: in 1970 the top CEOs made 40 times as much as the average worker. Now it is more than 500 times as much.

But when inequalities become immense, as they are becoming in this country, an antisocial, immoral dynamic begins to take effect. People are so far apart in their income and respective experiences that they no longer see themselves as having any common interests. It is as though people no longer consider themselves as members of the same species.

The results can be horrifying. In Brazil, where the inequalities in wealth have outpaced all others in the world, business owners have hired thugs to kill children who panhandle outside their businesses because their business suffers. More recently children who are orphans have been kidnapped and their organs are harvested to sell for fabulous sums on the black market.

All this is to say that as income inequalities grow, the moral fabric of society is increasingly torn and tattered. And the progressive decline in morality, which we are witnessing on a daily basis in terms of corruption among politicians and in the business world, is Problem #2 of capitalism.

There are still more problems. The wealthy are extremely wealthy and powerful. And they are dedicated to keeping this wealth; it constitutes the meaning of their lives. Consequently they are intent on getting legislation passed that will defend and promote their privileges and profits.

To accomplish this goal, the rich routinely engage lobbyists to press for their interests by meeting with influential politicians and, of course, giving them huge sums of money. Last year, for example, the rich gave $1.42 billion to politicians to insure their interests were protected.

Here are some recent particular examples:

A New York Times (June 7, 2008) article reported that in preparation for its August convention in Denver, "Elected Democratic officials have been calling corporations -- meeting with Wall Street executives and flying to San Diego, Philadelphia and Las Vegas -- to raise $40 million the party has budgeted for the convention.... Brochures being sent to potential corporate donors ... say that 'as a sponsor' of the convention, corporate executives will have access to as many as 232 members of Congress, 51 Senators and 28 governors in what is being marketed as a 'once in a lifetime' opportunity.

"Whereas $1 million will buy the top sponsorship at the Democratic convention, the top sponsorship at the Republican convention ... has a $5 million price tag."

In connection with the fund-raising for Obama's recent inauguration, The New York Times (Jan. 6, 2009) reported: "President-elect Barack Obama has raised more than $24 million for his inauguration so far, much of it with single checks of $25,000 or $50,000 from executives from Silicon Valley, Wall Street and Hollywood as well as from former supporters of Senator Hillary Rodham Clinton."

Later the article added: "'It's the same well-connected big-money people who are now funding the inaugural,' said Craig Holman, a lobbyist with Public Citizen. 'What they get is a chance to influence policy or get government contracts or ear-marks.'"

So Problem #3 is this: Democracy within the framework of capitalist society is fundamentally subverted. Legislation is passed largely on the basis of whoever gives the greatest sum of money, not according to what is best for society as a whole.

Consequently, policies that are supported by a majority of the population, are left to perish by the wayside simply because we do not have vast amounts of money to deliver to politicians. Public education is in a state of decline even though a majority of the population supports high quality public education. The environment is being destroyed even though a majority would like to see it cleaned up and protected. Most people want a higher minimum wage, but there is no impulse among legislators to raise it even though workers who are paid the minimum wage and work full-time are left struggling below the poverty line. And so on.

And this leads to yet another problem generated by capitalism. It is a system based on the assumption that people are incorrigibly selfish and greedy. We know from anthropologists who have studied a wide variety of cultures that this assumption is false. There have been countless societies in which members were not only dedicated to their own welfare, but equally dedicated, and sometimes more so, to the welfare of their neighbors and the community as a whole.

Capitalism does not arise from selfishness and greed; it gives rise to selfishness and greed by requiring that people compete with one another simply in order to exist. The process of inculcating competition begins when children are sent off to school where they must compete for grades, which then deprives them of experiencing the joys of learning that are inherent to the acquisition of knowledge. It continues when they join the workforce so that they are often deprived of the pleasures of camaraderie with their coworkers. Everyone is judged according to the depressing and entirely superficial standard of being winners and losers of one competition or another.

Given such a climate, people lose a sense of belonging to a community where they can be appreciated as participants in a common endeavor and in a common struggle. Under capitalism, the meaning of life is not a shared meaning but is reduced purely to the acquisition of money. And whoever has the most money wins; this is the ultimate lesson of capitalism.

So this is Problem #4 of capitalism: the higher spiritual pleasures of life — those derived from beauty, wisdom, justice and truth — pleasures which can only exist in communities — are ranked as unimportant while, with capitalism's cult of the individual, money becomes the one true value. In other words, capitalist society invites us down a path of meaningless egoism where money, as a stalking horse, poses as companionship, love, truth and beauty.

There are still more problems. Capitalism is destroying the environment. If these destructive tendencies are allowed to persist, their devastating effects will be irreversible. The major source of global warming is our reliance on fossil fuels. But instead of spearheading a campaign to reduce the amount of gasoline cars consume, the auto industries have vigorously lobbied against higher fuel standards because they think solely in terms of protecting their own profit margins, not in terms of protecting the environment. The coal industries have been trying to convince us to believe in the fantasy of clean coal, while they continue to pollute the environment and contribute heavily to global warming. Meanwhile forests, which counteract the effects of fossil fuels, are being clear-cut more each year in order to make way for cattle grazing and the production of beef.

These practices amount to Problem #5 of capitalism: A handful of corporations are destroying the environment for generations to come, causing a precipitous decline in both animal species and plant life, simply so they can maximize their profits. This means that capitalism encourages individuals to pursue their own private interests although harming everyone else in the process. But this behavior is simply business as usual. One would be hard-pressed to devise a sicker moral creed.

And finally there is Problem #6: On its most basic level, the economic crisis we are now confronting emanates from a deep-seated contradiction embedded in the foundation of capitalism. On the one hand, businesses require low labor costs to survive the competition. On the other hand, they need to sell their products, which requires that there are people who have the money to pay for them. Since workers constitute the majority of the population, it is crucial that they have a high enough income to be able to purchase the products of these businesses. But because of the first tendency, this is often not the case. (See, for example: www.nytimes.com/2009/01/31/business/economy/31econ.html?_r=1)

This contradiction is endemic to capitalism. Sometimes it is expressed in a recession where merchandise sits on shelves because people do not have enough money to buy them. But at other times, such as the present or during the 1930's, this contradiction erupts in a catastrophic economic crisis where workers lose their jobs, run out of credit, cut back on purchases, and the economy comes to a dead halt.

Obama's Promises Re-examined

As for Obama and his campaign promises directed to working people, there are two possibilities: (1) He was playing the standard game of politicians, telling people what they wanted to hear in order to get elected and then doing what those who are giving you large sums of money want you to do because their money will get you elected. (2) He was incredibly naïve about the nature of capitalism and sincerely believed that he could offer working people real hope and real change. If this was the case, capitalism, which always aims at lowering wages and raising profits and making life hard on workers in general, will prove him wrong. And this brings us to the subject of socialism.


When people in this country raise the idea of socialism as a superior alternative to capitalism, they immediately find themselves confronting a knee-jerk reaction: "But just look at Russia," we are told, as if this single comment ended the debate. However, for us socialists there is good news: Russia is now capitalist — it's a very unpleasant from of capitalism with plenty of corruption — but capitalist nevertheless. So now those of us who are socialists can turn to the capitalist enthusiasts and respond: "You are for capitalism? Just look at Russia."

But the point is this: capitalism can take many forms and so can socialism. And just as those who are pro-capitalist do not have to embrace Russia's version of capitalism, so we who are socialists refuse to embrace Russia's version of socialism.

Here are some principles that for us define socialism and we think make a lot of sense:

1. We believe that people are much better off when the satisfaction of everyone's basic needs is guaranteed. We should not allow some people to go hungry or become homeless because hard times have fallen on them as long as we have the ability to provide them with food and shelter. People's contribution to society is crippled when they are hungry or homeless. Similarly everyone should be provided with high quality education. To the degree that people are educated, they become more productive members of society and are far less likely to turn to crime. Everyone should be guaranteed health care because if they are sick they are unable to go to work. We are all better off when everyone is well educated, healthy and has their basic physical needs met. With the adoption of this principle, people will be able to live without the debilitating stress that so many people are suffering now.

2. Capitalism operates in the interests of a small minority — those who are extremely wealthy and powerful. We believe that society should operate in the interests of the majority of its members. But for this to occur, everyone must have a voice in how society is run. And this in turn means that people must have easy access to all the relevant information that is available, and everyone must have the opportunity to discuss and debate and then vote on the most important questions that determine the direction society will take.

The idea that everyone participates in the governing of society is crucial. It eliminates the emergence of a government bureaucracy that is separate from the general population. Bureaucracies always govern in their own interests, not in the interests of the majority. We believe that a healthy society must be run in the interests of the majority.

3. We believe that everyone who wants to work should be guaranteed a job. Capitalism never runs on full employment, but requires that workers compete against one another for scarce jobs. By bringing everyone into the workforce, we can then reduce the workweek so that people can enjoy more leisure time and actually begin to enjoy life more.

4. People should be paid according to how much they work. If someone is able-bodied but does not want to work but prefers to stay home and watch TV, then they would not be paid. If someone shows up to work, but talks on the phone all day without doing any work, they would not be paid. The idea of paying everyone exactly the same regardless of what they contribute has never been embraced by any form of socialism.

5. When we say that everyone must have a voice in determining the fundamental direction of society, that means the economy must be publicly owned and run democratically. For example, we could take up the question whether organic farming should be pursued or whether we should continue using pesticides and chemical fertilizers. We could debate and then vote on whether nuclear energy is a wise alternative. We could take up the question of investing in research aimed at producing solar-powered cars. And so on. Not only would we decide what to produce, but how much of each thing should be produced. This can be carefully calculated to insure that everyone's needs are met without producing a surplus that would simply go to waste. In this way crises will be avoided where too much of some things and not enough of other things are produced.

What To Do Now

These are the goals that we think are worth struggling for. But a fully developed socialist society, at this point in history, is a distant goal. The question that needs addressing right now is what to do in the face of this growing economic crisis that some say might be worse than the Great Depression. We, as working people, are confronting on an accelerating basis the loss of our jobs, our health care coverage, our retirement investments, and our homes. Meanwhile the government has handed over as a gift - with no strings attached - billions of dollars of our taxpayer money to the people who run the financial institutions whose reckless greed triggered this crisis. And these people are already extremely rich.

We working people, as isolated individuals, are powerless. We do not have the vast sums of money to donate to politicians to convince them to implement policies that benefit us. However, when we organize ourselves and stand together, we become a powerful force. Society cannot function unless we agree to go to work. The rich cannot make a single penny in profits if we do not perform our jobs.

This means that we need to stop seeing ourselves in competition with one another but come together in order to link up in a common cause. Our guiding principle must be: An injury to one is an injury to all. This means that even though we personally might not be threatened with foreclosure, we demand that the government stop foreclosures on houses people bought to live in. Even though we might have health insurance, we demand that the government institute a single-payer system so that everyone can be guaranteed full health care coverage. And this principle can be applied in all types of situations, whether large or small. Workers, for example, can demand that there be no overtime while some are being laid off and advocate a shorter workweek with no cut in pay so that layoffs can be avoided altogether.

This approach, where we refuse to compete with one another but instead stand up for one another, is an attack on the basic principles of capitalism and actually represents an injection of socialist relations into the current capitalist context. When people adopt this approach, their consciousness is changed. People begin to experience the power they can wield by acting collectively, and they experience a deep sense of camaraderie that standing in solidarity provides. Whenever people stand together, defend one another, and democratically pursue their common interests, the spirit of socialism is at work.

There is a movement currently underway that is aiming at exactly this, and it has the potential to attract many people. The movement is called the Workers Emergency Recovery Campaign (see www.wercampaign.org). It has been organized by some members in the labor movement to bring workers together to fight for our collective interests. The government has been supplying those who run the financial institutions with hundreds of billions of dollars and more is on the way. Many of us think it is crucial that we come together to fight for a bailout for working people. Already this campaign has attracted enthusiastic support from workers and labor officials across the country as well as from some nationally recognized individuals such as Cindy Sheehan and Cynthia McKinney. The campaign is based on a 10-point program which includes demanding a stop to the layoffs, instituting a job creation program, putting a stop to the foreclosures, creating a single-payer health care system for all, taxing the rich, and so on.

Simply struggling to defend our individual interests is business as usual. Mounting a campaign to demand that everyone have a secure and comfortable life is launching the good fight.

Ann Robertson is a teacher at San Francisco State University and a writer for Workers Action (www.workerscompass.org). She can be reached at  aroberts45@aol.com

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