Why Capitalism Thrives–and how it self-destructs

The Brief

(Note: this file is under construction. Eventually it will be very long, with links to supporting materials.)

An obvious fact of history: since the beginning of time, whenever a society’s richest and most powerful members demand too much of its productivity for themselves, bad things always happen.

That was conclusion of noted historian Arnold Toynbee in his twelve volume study of the rise and fall of civilizations. In A Study of History he noted that when the elites, however they are defined, accumulate too much—and, consequently, others have too little—it is a “distinctive mark of the phases of breakdown and disintegration, by contrast with its absence during the phase of growth.”

Historians T.H. Watkins, in The Great Depression, and Will and Ariel Durant, in The Lessons of History, wrote more specifically about how the United States got into the Great Depression, and how it got out of it.

An objective review of the main events of the depression and our economic recovery clearly demonstrates the validity of Toynbee’s, Watkins’ and the Durants’ conclusions. We got into the depression because three Republican administrations gave us a decade of fiscal, deregulatory, and monetary policies that enriched investors and the already rich and powerful—at the direct expense of everyone else. We got out of the depression because of Roosevelt’s New Deal and fifty years of relative liberal economic policies.

Today’s voters should also be aware of historian Carl Abrams’ book: Conservative Constraints: North Carolina and the New Deal. He explains how southern Democrats deliberately sabotaged the New Deal in order to keep workers’ wages from going up and taxes on the rich from increasing.

Today, we’re repeating the mistakes of the “Roaring Twenties.” Since 1980, our government has pursued economic policies that create a growing wealth and income disparity between the wealthy and everyone else. Not only that, but conservatives, especially southern ones, are again trying to sabotage any government efforts to correct the growing transfer of wealth from workers to investors and the already wealthy.

  • Check out Kevin Phillips’ book, Bad Money. Phillips is probably America’s best synthesizer of political and economic history, and he describes how our government has become biased in favor of the wealthy and powerful—even when administered by Democrats.

Stop for a moment and consider what has happened to the U.S. after Ronald Reagan became president.

Prior to 1980:

  • The U.S. led the world in industrial production—by wide margins.
  • The U.S. led the world in technological innovation and development.
  • The U.S. led the world in exporting to other nations.
  • The U.S. was the greatest consumer nation of other nations’ productivity.
  • Workers’ wages in the U.S. were the highest in the world, and the envy of every other country.
  • Employment levels varied, but were not a chronic problem
  • The U.S. had created the largest and most prosperous middle class—and a reasonably prosperous poor—in history.
  • Entitlements like Social Security were adequately funded.
  • America’s wealthiest citizens had high motivations to invest their money in this country.


  • China, India, and other developing nations are taking over, or have taken over, the lead in industrial production.
  • China, India, and other developing nations are taking over, or have taken over, the lead in technological innovation and development.
  • China, India, and other developing nations are taking over, or have taken over, the lead in exporting to other nations.
  • China, India, and other developing nations are taking over, or have taken over, the lead as consumer nations of other nations’ productivity.
  • Workers’ wages in the U.S. are still the highest in the world, but have been stagnant or declining since 1980, and are much closer to the wages in other countries.
  • Unemployment has reached a chronic (permanent?), unyielding and unacceptable level.
  • Entitlements like Social Security are underfunded.
  • The U.S. middle class is vanishing and many have joined the ranks of the poor—and the poor are finding themselves in increasingly desperate conditions.
America’s wealthiest citizens are now motivated to invest their money in those countries where wages are lowest and protections of workers and the environment are the fewest.  As unbelievable as it seems, many of our highly principled, U.S. based multinational corporations deliberately locate in areas of the world where workers can be openly brutalized.

Now, THINK about it. What has happened since 1980?  It really isn’t all that complicated.

Next: go to Brief-2 at the top menu, or go here.

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