The Origins of a “Crisis of Value”
If you do a Google search and type in the words “crisis of value,” you will find a lot of smart, and even whiny stuff, about “a crisis of values.” In a nutshell, a lot of pontificating by people who believe that their “values,” their “preferred methods for surviving life” are better than those used by others.
I am willing to bet a lot of money that penning long-winded treatises about values is a luxury of the financially secure. These folks definitely aren’t losing sleep over how they will make ends meet. They aren’t living in the land of “Or.” Will I pay my rent or put food on the table or buy my child medication? The “or’s” are so many, really, and yet in 2020 America, this should not be the case.
The Land of Or
I can pay for this or that — but I can’t cover the cost of both. This infamous decision, so well known and dreaded by more than half of American families, revolves around the ubiquitous “or.” This harmless little word has become subtlety more powerful and deceptively more destructive than many other words in our society today. Economists and linguists alike both fail to comprehend the full magnitude of letters 15 (O)and 18 (R) in the American-English lexicon.
Returning to our crisis of value, though, please type into Google these words: “America’s crisis of value.” The search results left me a bit surprised — no one is actually talking this very obvious problem. Scroll down a bit and we will find a 2016 Time magazine article talking about a “crisis of confidence.” Here, they are referring to capitalism — yes, the eternally holy “ism” that supposedly makes the world go round (and hotter, but this discussion is for a different day). The author in the Time article writes about a “disaffected middle-class — ” A lot of really unnecessary words are used by the author, like green kindling, resulting in a large amount of smoke and so distracting us from the obvious: our current economic system is failing the majority of Americans.
In 1980, Ronald Reagan was elected president of the United States and access to the Land of Or, a place the working poor already knew quite well, was granted to America’s middle-class thanks to policies made popular during the so-called Reagan Revolution.
The active dismantling of America’s core-strength, a vibrant and expanding middle-class, was underway. Do I think this was intentional? Not being the conspiratorial type, no; but I will chalk the foresightedness up to go old-fashioned greed.
Consider these small historical tidbits: Pre-Civil War America was an agrarian society with land being the “currency” determining whether one citizen was wealthier than another; but there was a lot of land and Manifest Destiny was like a printing press for this value. In the Post-Civil War to pre-World War I era, the rapid industrialization of America gave rise to a strong labor union movement. The success of the Russian Revolution, however, put an end to the nascent labor movement and workers lost most of the attained rights — the owner-class became king again. When the “owners” are in unregulated mode, not-so good things happen to the rest of us and in the era from 1920 to 1932, the rapid concentration of wealth at the top ended with The Great Depression.
America’s formula for such post-WWII prosperity, realized through the manifestation of the largest middle-class the world had ever seen, came about in the 30 years spanning the late 1940’s to late 1970’s. The foundations for this middle-class, initially laid during FDR’s New Deal Era and WWII, led to the many post-FDR government programs that made all of America better-off. The “greatest generation” came to age, and lived most of their lives, during a period of high corporate taxation and social activism by the federal government resulting in an improvement of the lot of all — “the great expansion.”
At no time in our history had there been such egalitarian income growth, with the poorest segments of society gaining the most. From 1960 to 1969, black Americans saw more positive economic growth than white Americans — not because of government hand-outs as the case would be made later by Reagan then further espoused by the modern-GOP but because blacks were finally being admitted to colleges; because the legal infrastructure for letting them enjoy some semblance of economic equality was being implemented. Black Americans, since their arrival to America 400 years prior, had had it so tragically bad as a group, that in the 1960’s there was only one way for them to go— yes, up.
By the time Reagan was being elected president, however, the world economy was reestablishing a natural, post-WWII balance — the ripple effects of rising competition from Japan, Taiwan and West Germany were rocking the boat of middle-class job security. Rising oil prices, war in the Middle East, the Soviet invasion of Afghanistan, the Iran Hostage Crisis and a Vietnam War most Americans simply could not understand removed the Teflon-covering from America’s impregnable wealth. Phenomenal growth “for all” had stalled.
Made in 30 years and dismantled in less
At the outset of the 1980’s, the American middle-class was feeling pressure from a rapidly expanding world labor supply. Finding it cheaper to offshore manufacturing to developing countries, the jobs that had long sustained such steady and positive growth for so many Americans, for our communities, slowly disappeared. At the same time, the “big-box” concept of retail was taking hold. Walmart, a regional success story confined to deep Southern states, was making inroads all across the American landscape.
The “Walmart effect” has had a truly devastating impact on the middle-class. Prior to the opening of a Walmart in Any Town, USA, a locally-manufactured bike cost, say, $100 at Mary’s Bike Shop. Mary sells only American-made bikes. The shop gainfully employs 12 people and pays living wages — the bike manufacturer employs around 100 and also provides living wages. One fine day, the local Walmart starts selling bikes similar to the ones Mary sells but, made in Asia only cost the consumer $39.99.
The first impression here is that the consumer has really lucked out — and we all felt that very same way the first time a bundle was saved at Walmart, $61 in this case. This savings is added to a family’s budget. In the first go-around of Walmart beating out local shops, the saved money might be good for other local businesses as some of it will go into the community; a portion of those savings will also be plowed back into Walmart.
Jump ahead two years — the local shop has gone out of business and only 4 of the formerly-employed, which was 12, were able to find new jobs. Two of the 4 displaced are working at Walmart for minimum wage and always just a few hours shy of full-time —meaning they get no benefits. As expendable income dries up in the community because of the lower wages paid by the national chains, the local shops selling things at “full cost of labor” mark-ups fail one after another. In the end, the biggest recipient of the commerce still happening in the town is now the Walmart and other “Big-Box” stores and restaurants. The failure of those American-owned businesses is chalked to up “greedy unions” by the conservatives and modern-era Republicans.
In her book, Big-Box Swindle: The True Costs of Mega-Retailers and the Fight for America’s Independent Businesses, Stacy Mitchell highlights 8 “harms” that Big-Box retail inflicts upon American communities.
Harm #1: Big-box stores undermine small businesses and the entrepreneurial spirit
Harm #2: Big-box stores undermine retail wages
Harm #3: Loss of open spaces and natural resources
Harm #4: Loss of uniqueness of place
Harm #5: Losses caused by main street and mall abandonment
Harm #6: Hidden costs in the form of public assistance to low-wage workers
Harm #7: Popular confusion about prosperity
Harm #8: Bricks and mortar economic development subsidies
In most towns, the profits earned locally by these chain businesses will unquestionably leave the community. It is almost like a sort of reverse colonial economic system has been created. In our own nation’s history, we sent our raw materials to the imperial capital, London. London then sent back finished goods. The profits from the sales, concentrated in a minuscule number of hands, were shipped back to London. The American colonists received little of the added-value from their productivity.
The Big-Box formula looks similar. Locals input value, time and labor, and other locals buy the finished goods — goods no longer manufactured by Americans. The value inputted facilitates the sale of the goods — -which online-shopping is putting an end to. Employees are paid the absolute minimum and profits (value) streams out of the community to not only a headquarters in another state; but, often a tax-haven offshore further guaranteeing that the vast, national American community reaps only the bare minimum from the fruits of its labor.
When over-worked and unhealthy employees threaten to create a union or to strike, they are portrayed as radicals, communists, non-patriotic and simply greedy. An army of media and lobbyists protecting this new form of economic colonialism portrays the workers seeking a fair-share as being “agents against capitalism.” The justification for the perpetuation of the system of low wages and negligible taxation on the super rich and corporations, is grounded in the existence of the very generous “gift” these companies have supposedly given the American people — the lowest retail prices in the world.
And so, the demand for higher wages is usually met with: if you make me pay a living wage then I will raise my prices and harm everyone. Wielded like a gun at a knife fight, the threat is even backed up by “I might even take my business elsewhere because of the affront caused by your ingratitude.”
We the people have become hostages to this incredible cycle of incomprehensible profit-making — profit-making at the expense of our nation. The American employment landscape, gutted of jobs offering living wages, has been facilitated by politician after politician passing laws, signing treaties and makes deals that permit for a free flow of our nation’s wealth into ever fewer and fewer hands. It is truly a desperate situation.
Held hostage by the the low-price hoax, one of the greatest deceits pulled on the American people since the nation’s inception, every dollar spent at Big-Box is a dollar not being invested into the American community. Walmart claims that by pressing local — American — manufacturers to sell their goods for less, they were forcing the companies to be more efficient. Perhaps, this was true in the beginning — our imaginary bike price dropped from $100 too $40, great, right? But let’s imagine sitting around the Walton family (owners of Walmart) in 1990 at the Christmas dinner table. Bonus checks are handed out to the family members averaging around $50 million a person — -a nice stocking stuffer.
“Hey pop,” one of the Walton kids asks, “if 90% of all that we sell was sourced in Asia, how much would this bonus check be then?”
“Well, son,” Poppa Walton muses, “you can triple that. You’d being getting $150 million this Christmas.”
And so what do you think they did next? Under the guise of pushing for increased efficiency, Walmart pushes and pushes until US-based manufacturers simply can’t lower their costs anymore thus upsetting Walmart. With local shops out-of-business and Walmart the biggest customer, responsible for 80% of all orders, if our bike manufacturer loses Walmart as a customer it will go bankrupt. The American bike factory, a proud member of the American labor community for 80 years is forced to either close or offshore jobs. In either case, American families suffer. (Walmart Crushes Businesses)
Walmart now sells bikes imported from China. The Chinese manufacturer, able to undercut the lowest domestic price by 200% even despite the thousands of miles it need to travel to get to Any Town, USA, expands production and hires more local — in China. Criminal is that even with all of the transportation costs, that bike is still cheaper than one made two states over. And who will a certain political party and Walmart blame for this? Yes, the unions, “black welfare recipients” for example; but the obvious culprit always seems to somehow come out unscathed — greed.
Why did we so blatantly build China’s economy at the expense of our own? China now has the largest middle-class in the world and it is growing still.
Capitalism? Yes, pure and unadulterated. Good for America? Take a look around. Good for somebody? Take a look around.
This is a continuing series about America’s Crisis of Value. Each article will delve into the crisis looking at the causes and effects on our national psyche and future. I will also offer ways we can rebuild our American community and solve the crisis.