The best example of unbridled capitalism here in the U.S., has occurred within the last 10 years in the oil and gas industry, through a process of hydraulic fracturing, or better known as fracking. This process, which uses millions of gallon of water, and a huge array of chemicals, allows energy companies to drill horizontally into shale rock in a manner that releases vast amounts of oil and gas, previously thought to be unreachable. It has supposedly been a huge economic boon to energy giants such as Exxon, as well as to local economies where this type of shale rock is located. For example, North Dakota, previously known only for its cold and snow, found that huge deposits of shale subject to fracking lay beneath its frozen tundra. Hence, energy companies have made a mammoth investment in fracking these ND deposits. Tens of thousands of new jobs were created, as the unemployment rate in that state became virtually non-existent. The same held true for Texas which already had developed an enormous oil and gas industry. Many other states similarly cashed in on the action. With new, huge oil deposits being brought to the surface, the U.S. was able to significantly cut back on importing oil, especially from the volatile Mid-East. Hundreds of thousands of new jobs were created across the country. The price of gas at the filling stations dropped significantly, helping middle-class consumers. Sounds great, doesn’t it? Well, not quite.
Due to the vagaries of the way capitalism functions, serious problems soon started afflicting the oil and gas industry. Because of all this new oil that began flooding the market, the price per barrel, which was over a hundred dollars about 2-3 years ago, has now dropped to less than $50. While this sounds great for car owners, it’s not so great for Exxon and other oil companies, as well as oil exporters such as Saudi Arabia, Iran and Russia. Who cares, as long as I can get cheap gas at the pump, might be your first reaction. Well you should care, because as a result of this world-wide oil glut, thousands of workers who thought they had secure, well-paying jobs in the fracking industry, have suddenly found themselves unemployed. The oil industry has had to significantly reduce its oil exploration and development, laying off a ton of people. And its not just energy companies. By reducing oil extraction and exploration, less orders for heavy rigs, drilling equipment and other huge and expensive machinery have also occurred, causing the producers of such heavy metal to also cutback their payrolls in order to stem the tide of red ink. Adverse reactions from cheap oil have reverberated throughout the entire U.S. and Canadian economies. Under a capitalistic system, what’s good for the goose is apparently not always good for the gander.
While the world has always experienced capitalism to some degree, this form of economic wealth distribution didn’t swing into high gear until the industrial revolution of the 19th century. Huge industrial developers realized that vast fortunes were to be made by exploiting low and middle-class workers in the energy, railroad and other industries, as well as in the banking and securities trading markets. Most of you are familiar with the term “coolie wages” denoting minuscule amounts paid to low-income workers. But how many know that the term dates back to the middle of the 19th century when people from China and India were imported into the U.S. to perform back-breaking labor for little or no pay. Labor that most Americans didn’t want anything to do with.
Chinese workers were first imported into the U.S.during the 1849 California gold rush. These “coolies” were often victims of thugs and bigots, and were relegated into the most menial of jobs for little or no pay. They lived in the most dismal of shantytowns and ate scraps of food left over by others. Their life-expectency was obviously quite short. In 1865, more Chinese immigrants were imported to help build the Central Pacific Railroad, and were required to perform back-breaking work from dawn to dusk, while earning the most paltry of livings. Far less than what white workers earned while putting in much fewer hours. One could say that our continental, coast-to-coast railroad system was built on the backs of such coolie labor. One could also say that the very cornerstone of our capitalistic system is built on a foundation of exploitation.
Of course, over the past century and a half, the rough edges of U.S. and European capitalistic societies have been considerably smoothened by government welfare, retirement and health care programs. Although there is still significant worker exploitation, those that can’t compete (such as artists, musicians, writers, etc.) or are too old to function under a competitive, labor-intensive, meritocracy demanded by capitalism are often provided for by their government, at least to some extent. More so in Europe than the U.S., however. Those that advocate for capitalism point out that the alternative, i.e. socialism, has been a huge failure wherever its been tried. That’s true for the old USSR, Cuba, North Korea and a few other places. But the Scandinavian countries such as Norway, Sweden, Denmark and Finland have incorporated much socialism into their economic operations, and seem to thrive quite well. My own belief is that socialism requires people to work for the greater good; and that humans have not yet evolved to that point. They will work for themselves and their families, but not for the greater good. That will require about a few thousand more years of human evolution.
Winston Churchill once said that democracy is the worst form of government, except for every other that’s ever been tried. Substitute the word capitalism in place of democracy, and you’ve about hit the nail on the head.