The understanding of capitalism dates to the writings of Karl Marx in the mid-nineteenth century. His insights were spot on, even as his solution was totally wrong. Capitalism works just exactly the way he said it does, and it has exactly the faults he said it does. For present purposes, we are most interested in the primary imperative of capitalism: maximizing profit.
All profit goes to the owner or owners of an industry. None of it goes to the salaried or wage workers (unless they are able to invest cash in the company). Maximizing profit is the whole purpose of business. There are two ways to do this: by selling the product at high price, and by minimizing cost. Since the wages paid to workers are either the highest or one of the highest costs, owners do everything they can to pay as little as they can. That’s why they don’t like labor unions: unions protect the earnings of the worker from a position of power. It’s also why they like high unemployment: workers have fewer options.
The owner cannot minimize wages if there is full employment, because the underpaid worker will go elsewhere. If there is high unemployment, the owner can more safely offer low wages, because workers have no other choice. That’s why wages are slipping today.
Personal responsibility is one of the high principles of conservatives, and as we all know, capitalist owners are almost all conservatives. Personal responsibility is of course not the exclusive property of conservatives; by definition, no responsible person can be against responsibility.
But look at what else conservatives say they want. They want every government program to be dismantled that possibly can be dismantled. They do not mean the enormously inflationary and bloated military budget, which stands at 42% of the budget for the entire world. They mean exclusively the social programs that protect the safety and wellbeing of citizens, particularly Social Security and Medicare. They believe that these things—savings for retirement years, and provision for health care—are things that individuals must be responsible for.
This is where the ideal of personal responsibility crashes head-on with the realities of capitalism. Conservatives want individuals to take care of these things themselves, but the capitalist system does everything possible to keep workers from earning enough money to do so.
Let’s look at some figures:
Health insurance this year averages $19,000 for a family of four. Paying for health care will require ten dollars per hour of full-time work.
How about retirement? You are a 30-year-old worker making $50,000 a year, which is average, and you want to retire at 65 with 100% of your current income. (Remember, we are talking about personal responsibility here, so there will be no Social Security, and there will be no annual pension.) If you save the same amount as your health care costs, $10 per hour, you will have $728,000 at retirement, and it will all be gone by the time you are 80. Oops! OK, let’s boost it to $15 per hour. Ah, much better. You will have over a million dollars, and it will run out when you are 89. Better, but a bit scary. What if you live to 100?
But remember, just this minimal level of health care plus retirement savings will cost you $25 every full time hour you work. The only problem is, that includes no money for living. You will need two such incomes, but how can you do this and also honor the conservative goal of only the father supporting the family?
Suddenly the clash between capitalism and personal responsibility becomes crystal clear. There is no way in hell you will be able to pay for these things and still have enough money to actually live on. Do you imagine that your employer will pay you $50 an hour, even though they would not have the expense of health care and other bennies to pay for? The owners of the company where you work will do their best to pay you as little as possible because it’s a capitalist imperative.
So conservatives have determined that the ideal is for you personally to take responsibility for all of your financial undertakings, including all your living expenses, plus health insurance and retirement savings. You see statements to that effect every day. But you cannot if you earn an average income, because health care and savings alone will cost more than your total income. Not only does your employer not want to pay you what you will need, but they will do everything in their power to avoid paying you even an average wage.
I would very much appreciate thoughtful comments on this or any other piece. However, I will reject any comment that is not signed. JP