Why Capitalism Thrives–and how it self-destructs

The “education” con

NOTE: In no way does this website deny the validity of H.G. Wells’ observation that “Civilization is a race between disaster and education.”

Education is obviously crucial to the secure future of any society, and is just as important today as it ever was.

However, read the following file in the context of the way pro-corporation, anti-worker advocates now blame a “lack of education” for declining living standards.


Today’s most popular cliché “The U.S. must educate its citizens so we can compete on the world market” is flat-out wrong in so many ways.


First, recognize what’s going on here.  Top corporate executives and their investors have shifted the blame from those who caused our chronic unemployment and stagnant wages—themselves—to the victims of globalization.  According to them, the problem isn’t the outsourcing of jobs to low wage countries—it’s:

  • Those poorly educated and overpaid assembly-ling workers, engineers, scientists, accountants, etc. and
  • Our greedy overpaid teachers and
  • Our poorly run and over financed public school systems.

Of course, the real blame rests with Republican politicians who allow lobbyists for corporations and their investors to virtually write the trade legislation they either propose or support.


 Second, the statement suggests that the whole population of the United States is in competition with the populations of other nations. It’s simply not true. Only those Americans who actually work for a living have to compete with comparable workers elsewhere. That competition is brutal and impossible to win. There’s no way we can ever educate assembly-line workers, engineers, scientists, accountants, architects, and so on, to the point where they can compete with those making one-tenth to one-third as much.

On the other hand, investors, bankers, multi-national corporate executives and, in general, the money-handlers not only are exempt from the competition, they profit handsomely from it. They actually make our nation’s unemployment problems worse. Indeed, this was the real reason conservative politicians and economists fought for unregulated international trade to begin with: to make corporations more profitable and to put a lid on workers’ wages.

When American corporations abandon American communities and their workers, they give our competitors our latest technological innovations, and, instead of educating American workers, they’re educating foreign workers. Present government policies then allow them to send cheaper products back to the U.S. without penalty.

This results in a double whammy. These corporations then undercut corporations using domestic workers, and either drive them out of business or force them to also abandon the U.S. In addition, they send an unequivocal message to America’s workers and their unions: don’t dare try to negotiate for higher wages or better working conditions, or you’ll lose your jobs altogether.


Third, altlhough the suggestion that education made U.S. successful in developing the world’s biggest and most vibrant middle class is fundamentally true—that’s not the major reason. Prior to the 1930s, America managed its economy the way economies had always been managed: society’s wealthy and powerful established the rules for trade, and controlled the investor/worker relationship in ways that usually worked to their own advantage.

This led to a huge wealth and income gap in 1929 and resulted in a fundamental change in government policies—Roosevelt’s New Deal and legislation that rebalanced the investor/worker relationship in ways unique in world history. When unemployment was 19.9%, the Fair Labor Standards Act of 1938 established a minimum wage, eliminated child labor from manufacturing operations and— against warnings of an economic Armageddon—reduced the standard workweek from 60 hours to 40 hours, with time-and-a-half pay for overtime.

The historical record is quite clear. Federal legislation got American workers higher pay and better working hours and conditions. It wasn’t workers getting educated or more productive that got them an improved standard of living, it was a sensible government that believed in Democratic Capitalism.

This leads to the fourth reason “education is the answer” is a farce. Governments always set the rules for the relationship between investors and workers, for the ways taxes are collected, and for the spending of government resources. When our federal government was in control of its own economy, it could balance the interests of all segments of American society: the established wealthy, investors, workers, professionals, minorities, the educated, the uneducated, and so on.

Because of globalization, the U.S.—along with other nations in the developed world—has lost its ability to control the economy within its own borders. Multinational corporations and their investors now control the world economy and, hence, the U.S. economy. In order to gain favor from corporations, nations must offer them the lowest wages, the fewest worker protections and the biggest tax breaks, or they’ll take their industries and jobs elsewhere.

The U.S. economy worked, but only when the federal government managed it correctly. There is not now, nor in the foreseeable future, a comparable world government that can achieve the same successes in reaching an ethical balance between investors and workers.


Unfortunately, our thirty years of corporations’ transferring their in-house training in this country to the outsourced countries has caused a spotty shortage of qualified workers in a few industries that are still left in the U.S.  At this point, giving taxpayer financed advanced training to American workers will be the equivalent of putting a band aid on a broken arm. The real solution to our declining role in the world economy is to have an industrial policy that makes sense.

A positive note: the U.S. is still the consumer nation of first choice. In a growing economy, corporations want to introduce their products and services here—although that’s changing along with our loss of industry—and this is where they want to dump their products and services in a declining economy. Isn’t it time to change the rules of the game: tariffs on products and services from low-wage countries, and a tax system that doesn’t reward corporations for relocating in other countries?

Those who say the globalization is here and can’t be reversed are  the same ones who conned us into accepting it in the first place. Which begs the question: why can’t we now do everything we can to protect our jobs of the future?

Vote for a genuine Democrat. He’ll do everything he can to change our country back to the way it was when a middle class got a square deal.

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