Americas Capitalistic Government

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“We hold these Truths to be self-evident, that all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the Pursuit of Happiness — That to secure these Rights, Governments are instituted among Men, deriving their just Powers from the Consent of the Governed, that whenever any Form of Government becomes destructive of these Ends, it is the Right of the People to alter or to abolish it, and to institute new

Government, laying its Foundation on such Principles, and organizing its Powers in such Form, as to them shall seem most likely to effect their Safety and Happiness.”

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(Thomas Jefferson, Declaration of Independence)

When Thomas Jefferson wrote these words, he wrote them with the intent of establishing a new government that would not give anyone favoritism over others. After 224 years, this idea is still believed in by the citizens of America, but not practiced by their government. As the years passed, the values of America have slowly altered to materialism. The people trusted our government to make the best decisions for the entire country, but some decisions seem to favor the wealthiest citizens rather than all of the citizens. Not to say that the government is completely corrupt, but their priorities seem to have a monetary value, and they must pay for it some how. As a country with a capitalist government, one that has the main focus of making profit through free markets, money has an unfortunately big influence on policies that are made by the government. According to the public, which was based on middle-class adults in the US, business editors and college students, the general consensus came out to be that they believed that “capitalism must be altered before any significant improvements in human welfare can be realized.” This can be seen throughout history in the positions taken by the government about free markets, unionization, and .

The United States of America’s government is hyper-capitalistic, because the markets are freer than in any other country. We consume more and are more dependent on working. The markets in the US have not always been so free. In the beginning we had small markets that people did not depend so much on because of the fact that they were all farmers and sharecroppers. The existence of slavery was in very recent in history back then. America was not considered a capitalistic country, but instead a feudal one because everyone traded and didn’t expect monetary compensation for their products. When the goal of production (around the end of the 19th century) changed from being used for exchange to profit, the US began to become capitalistic. To establish a definition of capitalism, I shall establish it as when goods are produced to be sold; the revenues made are then used to be what you need with intent to make a profit in the end. Our capitalistic ways are effective in the US government because it small enough to allow the businesses to make their own decisions. As the US became industrialized, the need to mass-produce came into effect, and the boom in the labor market began. The problem with this is that the freedom of the markets allowed the businesses to move around as they liked; only when they were knowingly signing a contract were they forced to make a commitment. Markets dispersed power that kept the government from being able to say anything to the businesses that were making the most money in the market. The government decided to not involve itself when it came to the market, even though they knew that the bigger companies were overtaking the smaller ones. The wealthiest owners had the power in the markets and this allowed them to have more say as to what goes on in the free market. The government could intervene in this situation, but they do not because it would be too risky for them to put restrictions on the companies that right now have the power in the business world.

The free market of America is one that claims that everyone is free to gain power, but what happens when business owners decide to be a monopoly? Competition is good, but there are competitors that are so powerful that they are willing to crush any smaller competition. The government’s role in this situation can be seen as unfavorable for the smaller businesses and favorable to the wealthier businesses. The government chose to minimally involve itself in this situation under the pretext that the citizens of this great country did not wish to have the government to get involved. They knew that monopolies were being created by the big businesses but that fact did not get them to involve themselves. Their lack of involvement in situations such as these where the wealthy are conquering the poor shows that they are siding with the wealthy business owners by not fighting against them. This is not to say that they government never involved itself in such instances, but they nevertheless do little for the smaller businesses with their policies. The Sherman Act of 1890 prohibited “conspiracies in restraint of trade” and other monopolistic practices, but these acts were too outdated for our economy. Therefore, congress established the Federal Reserve System as a reaction to the power that the financial monopolies had in America. It was “headed by a board with ‘fair representation of financial, agricultural, industrial, and commercial interests, and the geographical divisions of the country.” All these laws and systems have not done much to keep the economy from monopolizing, however.

“In the 20th century, the working class became the most important antimonopoly force. Many labor organizations and the political parties based on the working class, while supporting traditional antimonopoly demands, increasingly focused on labor’s claims against monopoly.” In the 1970s, due to the lack of antitrust and antimonopoly laws, IBM won a lawsuit that was put against them by smaller business owners. Instead of getting punished for being so powerful in the market, it expanded, increased its profit, and the price of its stock more than doubled. As Victor Perlo put it: “IBM clearly emerged as the number-one supermonopoly of world capitalism.” Workers formed antimonopoly parties and even created unions to protect them from the monopolies that created unfavorable conditions and wages for them.

The unionization of the United States seemed to be a great idea by factory workers, but instead managed to give them less power than they had hoped for. “Factory workers had their greatest influence and were able to extract their most substantial concession from the government during the early years of the Great Depression before they were organized into unions.” The reason for this loss of power is very simple. Before the workers were organized, they had millions of individual voices that caused much disruption in the economy. Strikes were forever taking place where politicians were forced to listen to them. Politicians were forced to comply with what the workers demanded and this ended in a fake victory for the workers The government granted the workers the right to organize, which would seem to be a victory, but in reality this right to organize just caused the workers to lose their political power. Since the workers found that the government was supporting the unions, the membership rates have increased tremendously. Even though it seemed like a good idea to join the unions, the members soon found that this caused them to lose the thunder that their disorganization had over the government and politicians. This is so, because after they organized into unions, they did not strike as much as they did while they were disorganized. The strikes were economically stirring to the government because in this country of free markets, one of our main purposes is to make profit and that is accomplished through production. In “The Industrial Workers’ Movement” the author makes the point that “If workers withhold their labor, production is halted and profits dwindle, and employers are pressured into making concessions.” Without the strikes, the owners and employers are not forced to make concessions anymore, therefore letting them become weak in the eyes of the government and business. The degradation of work under capitalism has rendered the working class decreasingly capable of independent action. They had constant pressure to produce as much as they could so that the company could sell it at the lowest price possible. To make it possible, however, the workers’ wages had to be kept low and the hours long. They were exploited and even though they managed to raise their wages a little, other concessions were not granted because management did not see the union as threatening. They actually helped the companies by keeping the workers in good conduct.

The discipline that the unions managed to achieve in the factories was one victory for them with the management of the factories, because the managers could not complain about the production rate. This however kept the businesses from taking the workers as seriously as before because they do not pose such a threat anymore with strikes. Also, the government put their foot down when it came to when the unions actually did strike. The Taft-Hartley Act of 1947 took away many of the rights that were granted to the unions by the Wagner Act of 1935.

“It gave the employers the right to enjoin labor from striking, established a 60-day cooling-off period during which strikes were forbidden, outlawed mass picketing, denied unions the right to contribute to political campaigns, and abolished closed shops. Most importantly, however, the law required all union officers to take oaths that they were not members of the Communist Party.”

This oath was mandatory for recognition by the National Labor Relations Board of the union. This shows how the government went to extremes to keep unions in line, and to not interfere with the businesses’ production and the revenue that the businesses will bring in for the government. The governments of each state are so money hungry that they even fight over who will have the next corporation building or factory in their state.

Governments are dependent of the businesses for economic purposes. One thing that is favorable about their lust for the corporate move into their state is that it will create jobs for their citizens. There are, however, many side effects from this. For example, in the situation when Frito-Lay was looking for a new location for their plant, they went into Evansville, Arkansas with the intent of building a new factory that would produce their popular chips. Arkansas’ government wanted to have them set camp there, so they offered them a $10 million dollar incentive package plus they would cover all the costs to build the new plant. Frito-Lay got a “140-acre plant site, a rail spur, road improvements, a construction grant, tax credits for new employees and a 20% discount on sewer bills for the next 15 years.” What did the people of Evansville get, may you ask? They got a “no” to a request for a new water system. They received water pollution, and more traffic congestion. First of all, there are not that many jobs that are created for these plants. Secondly, it puts the citizens of the city in danger. The citizens of the city have the deadly E. coli pollutant in their well water. Because of the plant that the government begged to come to its city, the citizens are not able to drink the water from their water systems. The government was willing to spend more than $111 million on a company that would basically destroy its area, but it is not willing to spend $750,000 for the citizens to be able to drink their water. The government is too profit involved. The phrase “Money makes the world go around” is very true in this case. The citizens would not be giving them any money in return for the clean water, but the company would be creating jobs and revenues for that state.

The jobs that the companies would be creating for the state are not the greatest jobs ever. In the case of Nebraska Beef Ltd., an Omaha beef-packing company, the jobs it created involved sweatshop conditions. The workers were not given more than one bathroom break, they had one break 7 and a half hours before they ended work, and that is only if they worked ten hours. If they worked nine hours in one day they got no break. The state of Nebraska gave the corporation approximately $31.5million and even with that much money, it was not able to fully train its workers and provided them with low-paying jobs. The state did not even think about putting work laws on the plants; it made no demands as to what it wanted in return for providing so much to the company. One can say that it did create a program called Nebraska Quality Jobs Board, but apparently it didn’t help out in this situation. What is a quality job for Nebraska? Because of their bad choice in corporation to bring into its state, the citizens refuse to work for the corporation. Citizens from other states are the ones that are working in the plants, which pretty much defeats the purpose of bringing the corporations to the state. All it did was create more problems for the state such as traffic and pollution for the citizens of the state. One question that I have to ask myself is, if the situation is this bad here, how is it over in the other capitalist countries?

In Cohen and Rogers On Democracy, they say that “while capitalist democracy cedes workers certain rights and liberties, including suffrage, it does not eliminate the subordination of the interests of workers to the interests of capitalists remains a necessary though insufficient condition for the satisfaction of the interests of workers, and the welfare of workers is thus dependent on the welfare of capitalists.” In Western Europe this idea would not be completely true. The unions in Western Europe, first of all, are stronger than the ones here in the United States. Europe was industrialized before they became democratic. Therefore, they had to get together in order to get anything done within the government in their favor. The workers do have an interest in the capitalist, but not to the extent where they would do whatever the capitalist tells them to. The Western European governments involved their poor workers more than the US when it came to policies because of historical legacies and because of the constructed institutions. One thing that failed in America did manage to work in Europe, and that is the labor parties. The workers had to create their own parties. In the United States, the politicians crushed the labor parties, but in Europe they remain strong. One thing that is important to remember is that governments that are very favorable towards the poor do so because the poor are able to overcome the resource constraint. In Europe this is true but what is also true is that there is great solidarity in Europe, which made the workers so strong. Along with this the Industrial Revolution that happened in the last half of the 18th Century greatly helped the labor workers. “The Industrial Revolution was the first step in modern economic growth and development. ” The workers in Europe are big in number and the Revolution brought on new work conditions to the workers. Labor Parties established better wages and hours for the workers. The labor parties were huge in number and couldn’t be put down by the government as easily as the United States put down its unions.

In the United States, we have always believed that all men are created equal. Americans, however, know that even though we were created equal, we are not treated equally. The rich are the V.I.P to the government. They are taken care of well, and pampered with money and privileges that the other hard working Americans deserve more than them. We are in the age of profits, and if the government does not see any monetary value in something, they will not bother with it, even if it is its own people.

Peterson, Robert A.,Gerald Albaum, and George Kozmetsky.Modern American Capitalism. New York: Quorum Books, 1990.

Perlo, Victor. Superprofits and Crises: Modern U.S. Capitalism. New York: International Publishers, 1988.

Frances Fox Piven and Richard Cloward, Chapter 3 from Poor People’s Movements: Why they Succeed, How they Fail,(Vintage, 1977), pp96-180.

Lembcke, Jerry. Capitalist Development and Class Capacities: Marxist Theory and Union Organization. New York:Greenwood Press, 1988.

Joel Roers and Joshua Cohen, On Democracy, (Penguin, 1983), Chapter Six, “Democracy”, pp146-183.

“Industrial Revolution” Encarta Encyclopedia

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