About_Capitalism by censhunay

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									       The Social Responsibility of Business is to Increase its Profits
by Milton Friedman
The New York Times Magazine, September 13, 1970. Copyright @ 1970 by The New York Times
Company.
When I hear businessmen speak eloquently about the "social responsibilities of business in a free-
enterprise system," I am reminded of the wonderful line about the Frenchman who discovered at the
age of 70 that he had been speaking prose all his life. The businessmen believe that they are defending
free enterprise when they declaim that business is not concerned "merely" with profit but also with
promoting desirable "social" ends; that business has a "social conscience" and takes seriously its
responsibilities for providing employment, eliminating discrimination, avoiding pollution and whatever
else may be the catchwords of the contemporary crop of reformers. In fact they are–or would be if they
or anyone else took them seriously–preaching pure and unadulterated socialism. Businessmen who talk
this way are unwitting puppets of the intellectual forces that have been undermining the basis of a free
society these past decades.
The discussions of the "social responsibilities of business" are notable for their analytical looseness and
lack of rigor. What does it mean to say that "business" has responsibilities? Only people can have
responsibilities. A corporation is an artificial person and in this sense may have artificial
responsibilities, but "business" as a whole cannot be said to have responsibilities, even in this vague
sense. The first step toward clarity in examining the doctrine of the social responsibility of business is
to ask precisely what it implies for whom.
Presumably, the individuals who are to be responsible are businessmen, which means individual
proprietors or corporate executives. Most of the discussion of social responsibility is directed at
corporations, so in what follows I shall mostly neglect the individual proprietors and speak of corporate
executives.
In a free-enterprise, private-property system, a corporate executive is an employee of the owners of the
business. He has direct responsibility to his employers. That responsibility is to conduct the business in
accordance with their desires, which generally will be to make as much money as possible while con-
forming to the basic rules of the society, both those embodied in law and those embodied in ethical
custom. Of course, in some cases his employers may have a different objective. A group of persons
might establish a corporation for an eleemosynary purpose–for example, a hospital or a school. The
manager of such a corporation will not have money profit as his objective but the rendering of certain
services.
In either case, the key point is that, in his capacity as a corporate executive, the manager is the agent of
the individuals who own the corporation or establish the eleemosynary institution, and his primary
responsibility is to them.
Needless to say, this does not mean that it is easy to judge how well he is performing his task. But at
least the criterion of performance is straightforward, and the persons among whom a voluntary
contractual arrangement exists are clearly defined.
Of course, the corporate executive is also a person in his own right. As a person, he may have many
other responsibilities that he recognizes or assumes voluntarily–to his family, his conscience, his
feelings of charity, his church, his clubs, his city, his country. He ma}. feel impelled by these
responsibilities to devote part of his income to causes he regards as worthy, to refuse to work for
particular corporations, even to leave his job, for example, to join his country's armed forces. Ifwe
wish, we may refer to some of these responsibilities as "social responsibilities." But in these respects he
is acting as a principal, not an agent; he is spending his own money or time or energy, not the money of
his employers or the time or energy he has contracted to devote to their purposes. If these are "social
responsibilities," they are the social responsibilities of individuals, not of business.
What does it mean to say that the corporate executive has a "social responsibility" in his capacity as
businessman? If this statement is not pure rhetoric, it must mean that he is to act in some way that is not
in the interest of his employers. For example, that he is to refrain from increasing the price of the
product in order to contribute to the social objective of preventing inflation, even though a price in
crease would be in the best interests of the corporation. Or that he is to make expenditures on reducing
pollution beyond the amount that is in the best interests of the corporation or that is required by law in
order to contribute to the social objective of improving the environment. Or that, at the expense of
corporate profits, he is to hire "hardcore" unemployed instead of better qualified available workmen to
contribute to the social objective of reducing poverty.
In each of these cases, the corporate executive would be spending someone else's money for a general
social interest. Insofar as his actions in accord with his "social responsibility" reduce returns to
stockholders, he is spending their money. Insofar as his actions raise the price to customers, he is
spending the customers' money. Insofar as his actions lower the wages of some employees, he is
spending their money.
The stockholders or the customers or the employees could separately spend their own money on the
particular action if they wished to do so. The executive is exercising a distinct "social responsibility,"
rather than serving as an agent of the stockholders or the customers or the employees, only if he spends
the money in a different way than they would have spent it.
But if he does this, he is in effect imposing taxes, on the one hand, and deciding how the tax proceeds
shall be spent, on the other.
This process raises political questions on two levels: principle and consequences. On the level of
political principle, the imposition of taxes and the expenditure of tax proceeds are governmental
functions. We have established elaborate constitutional, parliamentary and judicial provisions to control
these functions, to assure that taxes are imposed so far as possible in accordance with the preferences
and desires of the public–after all, "taxation without representation" was one of the battle cries of the
American Revolution. We have a system of checks and balances to separate the legislative function of
imposing taxes and enacting expenditures from the executive function of collecting taxes and
administering expenditure programs and from the judicial function of mediating disputes and
interpreting the law.
Here the businessman–self-selected or appointed directly or indirectly by stockholders–is to be
simultaneously legislator, executive and, jurist. He is to decide whom to tax by how much and for what
purpose, and he is to spend the proceeds–all this guided only by general exhortations from on high to
restrain inflation, improve the environment, fight poverty and so on and on.
The whole justification for permitting the corporate executive to be selected by the stockholders is that
the executive is an agent serving the interests of his principal. This justification disappears when the
corporate executive imposes taxes and spends the proceeds for "social" purposes. He becomes in effect
a public employee, a civil servant, even though he remains in name an employee of a private enterprise.
On grounds of political principle, it is intolerable that such civil servants–insofar as their actions in the
name of social responsibility are real and not just window-dressing–should be selected as they are now.
If they are to be civil servants, then they must be elected through a political process. If they are to
impose taxes and make expenditures to foster "social" objectives, then political machinery must be set
up to make the assessment of taxes and to determine through a political process the objectives to be
served.
This is the basic reason why the doctrine of "social responsibility" involves the acceptance of the
socialist view that political mechanisms, not market mechanisms, are the appropriate way to determine
the allocation of scarce resources to alternative uses.
On the grounds of consequences, can the corporate executive in fact discharge his alleged "social
responsibilities?" On the other hand, suppose he could get away with spending the stockholders' or
customers' or employees' money. How is he to know how to spend it? He is told that he must contribute
to fighting inflation. How is he to know what action of his will contribute to that end? He is presumably
an expert in running his company–in producing a product or selling it or financing it. But nothing about
his selection makes him an expert on inflation. Will his hold ing down the price of his product reduce
inflationary pressure? Or, by leaving more spending power in the hands of his customers, simply divert
it elsewhere? Or, by forcing him to produce less because of the lower price, will it simply contribute to
shortages? Even if he could answer these questions, how much cost is he justified in imposing on his
stockholders, customers and employees for this social purpose? What is his appropriate share and what
is the appropriate share of others?
And, whether he wants to or not, can he get away with spending his stockholders', customers' or
employees' money? Will not the stockholders fire him? (Either the present ones or those who take over
when his actions in the name of social responsibility have reduced the corporation's profits and the
price of its stock.) His customers and his employees can desert him for other producers and employers
less scrupulous in exercising their social responsibilities.
This facet of "social responsibility" doc trine is brought into sharp relief when the doctrine is used to
justify wage restraint by trade unions. The conflict of interest is naked and clear when union officials
are asked to subordinate the interest of their members to some more general purpose. If the union offi-
cials try to enforce wage restraint, the consequence is likely to be wildcat strikes, rank-and-file revolts
and the emergence of strong competitors for their jobs. We thus have the ironic phenomenon that union
leaders–at least in the U.S.–have objected to Government interference with the market far more
consistently and courageously than have business leaders.
The difficulty of exercising "social responsibility" illustrates, of course, the great virtue of private
competitive enterprise–it forces people to be responsible for their own actions and makes it difficult for
them to "exploit" other people for either selfish or unselfish purposes. They can do good–but only at
their own expense.
Many a reader who has followed the argument this far may be tempted to remonstrate that it is all well
and good to speak of Government's having the responsibility to impose taxes and determine
expenditures for such "social" purposes as controlling pollution or training the hard-core unemployed,
but that the problems are too urgent to wait on the slow course of political processes, that the exercise
of social responsibility by businessmen is a quicker and surer way to solve pressing current problems.
Aside from the question of fact–I share Adam Smith's skepticism about the benefits that can be
expected from "those who affected to trade for the public good"–this argument must be rejected on
grounds of principle. What it amounts to is an assertion that those who favor the taxes and expenditures
in question have failed to persuade a majority of their fellow citizens to be of like mind and that they
are seeking to attain by undemocratic procedures what they cannot attain by democratic procedures. In
a free society, it is hard for "evil" people to do "evil," especially since one man's good is another's evil.
I have, for simplicity, concentrated on the special case of the corporate executive, except only for the
brief digression on trade unions. But precisely the same argument applies to the newer phenomenon of
calling upon stockholders to require corporations to exercise social responsibility (the recent G.M
crusade for example). In most of these cases, what is in effect involved is some stockholders trying to
get other stockholders (or customers or employees) to contribute against their will to "social" causes
favored by the activists. Insofar as they succeed, they are again imposing taxes and spending the
proceeds.
The situation of the individual proprietor is somewhat different. If he acts to reduce the returns of his
enterprise in order to exercise his "social responsibility," he is spending his own money, not someone
else's. If he wishes to spend his money on such purposes, that is his right, and I cannot see that there is
any objection to his doing so. In the process, he, too, may impose costs on employees and customers.
However, because he is far less likely than a large corporation or union to have monopolistic power,
any such side effects will tend to be minor.
Of course, in practice the doctrine of social responsibility is frequently a cloak for actions that are
justified on other grounds rather than a reason for those actions.
To illustrate, it may well be in the long run interest of a corporation that is a major employer in a small
community to devote resources to providing amenities to that community or to improving its
government. That may make it easier to attract desirable employees, it may reduce the wage bill or
lessen losses from pilferage and sabotage or have other worthwhile effects. Or it may be that, given the
laws about the deductibility of corporate charitable contributions, the stockholders can contribute more
to charities they favor by having the corporation make the gift than by doing it themselves, since they
can in that way contribute an amount that would otherwise have been paid as corporate taxes.
In each of these–and many similar–cases, there is a strong temptation to rationalize these actions as an
exercise of "social responsibility." In the present climate of opinion, with its wide spread aversion to
"capitalism," "profits," the "soulless corporation" and so on, this is one way for a corporation to
generate goodwill as a by-product of expenditures that are entirely justified in its own self-interest.
It would be inconsistent of me to call on corporate executives to refrain from this hypocritical window-
dressing because it harms the foundations of a free society. That would be to call on them to exercise a
"social responsibility"! If our institutions, and the attitudes of the public make it in their self-interest to
cloak their actions in this way, I cannot summon much indignation to denounce them. At the same time,
I can express admiration for those individual proprietors or owners of closely held corporations or
stockholders of more broadly held corporations who disdain such tactics as approaching fraud.
Whether blameworthy or not, the use of the cloak of social responsibility, and the nonsense spoken in
its name by influential and prestigious businessmen, does clearly harm the foundations of a free
society. I have been impressed time and again by the schizophrenic character of many businessmen.
They are capable of being extremely farsighted and clearheaded in matters that are internal to their
businesses. They are incredibly shortsighted and muddleheaded in matters that are outside their
businesses but affect the possible survival of business in general. This shortsightedness is strikingly
exemplified in the calls from many businessmen for wage and price guidelines or controls or income
policies. There is nothing that could do more in a brief period to destroy a market system and replace it
by a centrally controlled system than effective governmental control of prices and wages.
The shortsightedness is also exemplified in speeches by businessmen on social responsibility. This may
gain them kudos in the short run. But it helps to strengthen the already too prevalent view that the
pursuit of profits is wicked and immoral and must be curbed and controlled by external forces. Once
this view is adopted, the external forces that curb the market will not be the social consciences,
however highly developed, of the pontificating executives; it will be the iron fist of Government
bureaucrats. Here, as with price and wage controls, businessmen seem to me to reveal a suicidal
impulse.
The political principle that underlies the market mechanism is unanimity. In an ideal free market resting
on private property, no individual can coerce any other, all cooperation is voluntary, all parties to such
cooperation benefit or they need not participate. There are no values, no "social" responsibilities in any
sense other than the shared values and responsibilities of individuals. Society is a collection of
individuals and of the various groups they voluntarily form.
The political principle that underlies the political mechanism is conformity. The individual must serve a
more general social interest–whether that be determined by a church or a dictator or a majority. The
individual may have a vote and say in what is to be done, but if he is overruled, he must conform. It is
appropriate for some to require others to contribute to a general social purpose whether they wish to or
not.
Unfortunately, unanimity is not always feasible. There are some respects in which conformity appears
unavoidable, so I do not see how one can avoid the use of the political mechanism altogether.
But the doctrine of "social responsibility" taken seriously would extend the scope of the political
mechanism to every human activity. It does not differ in philosophy from the most explicitly
collectivist doctrine. It differs only by professing to believe that collectivist ends can be attained
without collectivist means. That is why, in my book Capitalism and Freedom, I have called it a
"fundamentally subversive doctrine" in a free society, and have said that in such a society, "there is one
and only one social responsibility of business–to use it resources and engage in activities designed to
increase its profits so long as it stays within the rules of the game, which is to say, engages in open and
free competition without deception or fraud."
by Matthew Warshauer
Traditionally, Americans have sought to realise the American dream of success, fame and wealth through thrift and
hard work. However, the industrialisation of the 19th and 20th centuries began to erode the dream, replacing it with a
philosophy of "get rich quick". A variety of seductive but elusive strategies have evolved, and today the three leading
ways to instant wealth are large-prize television game shows, big-jackpot state lotteries and compensation lawsuits. In
this article, Matthew Warshauer, Professor of History at Central Connecticut State University, examines why so many
Americans are persuaded to seek these easy ways to their dream.
How does one achieve the American Dream? The answer undoubtedly depends upon one’s definition of the Dream,
and there are many from which to choose. John Winthrop envisioned a religious paradise in a "City upon a Hill."
Martin Luther King, Jr. dreamed of racial equality. [1] Both men yearned for what they perceived as perfection.
Scholars have recognized widely varying conceptions of these quests for American excellence.[2] One component of
the American Dream seems, however, to be fairly consistent: the quest for money. Few will deny that Americans are
intently focused on the “almighty dollar.” In a society dedicated to capitalism and the maxim that, “the one who dies
with the most toys wins,” the ability to purchase a big house and a nice car separates those who are considered
successful from those who are not.[3] Yet the question remains, how does one achieve this success? How is the
Dream realized? For many Americans the formula is one of instant, albeit elusive, gratification. Rather than adhering
to a traditional work ethic, far too many Americans are pinning their hopes on what they perceive as “easy” money.
This article focuses on three phenomena in contemporary American society that have successfully captured the quest
for the American Dream. Savvy marketers have convinced their audiences that a new wave of television game shows,
lottery luck, and lucrative lawsuits are the way to wealth.
Rags to riches the traditional way: through thrift and hard work
Instant wealth has not always been a major component of the Dream. Americans have traditionally centered their
efforts on thrift and hard work. During the Colonial Period, Benjamin Franklin counseled people on the "The Way to
Wealth." Poor Richard's Almanac advised that "Early to Bed, and early to rise, makes a Man healthy, wealthy, and
wise." The key to wealth was industry: "Industry pays debts," insisted Poor Richard.[4] Americans of the Early
Republic expanded Franklin's notion of industry into a labor ideology. For many the goal was not extravagant wealth,
but, rather, economic independence and the opportunity for social advancement through financial gain. Abraham
Lincoln insisted that the greatness of the American North was that industry allowed all men to prosper: "The prudent,
penniless beginner in the world, labors for wages awhile, saves a surplus with which to buy tools or land, for himself;
then labors on his own account another while, and at length hires another new beginner to help him. This…is free
labor--the just and generous, and prosperous system, which opens the way for all."[5]
In the midst of industrialization following the Civil War, many Americans experienced profound hardship in the
changing economic landscape. They found solace in the tales of Horatio Alger, whose characters overcame adversity
through industry, perseverance, self-reliance, and self-discipline. The ubiquitous "rags to riches" legend became a
cornerstone of American society; anyone could succeed and achieve wealth if they worked hard.[6] The commitment
to industry illustrated by Alger's characters, Lincoln's ideals of free labor, and Franklin's practical maxims were further
solidified in the American mind by the addition of a religiously based, Protestant "work ethic."[7] Many believed that
hard work allowed one to not only achieve financial success, but, through that success, revealed God's grace.
Numerous scholars note that the shift away from the traditional American work ethic corresponded directly with the
rise of industry. Work values changed dramatically when the assembly line production and machine driven
atmosphere of industrial America swallowed up skilled workers.[8] The aftermath of World War II exacerbated the
ethical shift as a consumer culture blossomed and Americans became preoccupied with material goods. As one critic
noted, “consumed by desires for status, material goods, and acceptance, Americans apparently had lost the sense of
individuality, thrift, hard work, and craftsmanship that had characterized the nation.”[9]
The result of this shift in work ethic has actually spurred rather than lessened the people’s desire to achieve the
American Dream. Yet the real difference is that the Dream has become more of an entitlement than something to
work towards. Many Americans no longer entertain a vision for the future that includes time, sweat, and ultimate
success. Rather, they covet the shortcut to wealth. Many who are engaged in work view it more as a necessary evil
until striking it rich. This idea has been perpetuated by a massive marketing effort that legitimizes the message that
wealth can be obtained quickly and easily. Whether through the television entertainment industry, state-based lottery
marketing drives, or legal advertisements, Americans are told again and again that the road to the financial success of
the American Dream is more a matter of luck than hard work.


Who wants to be a millionaire?
Little reveals the shift in the quest for the American Dream more than the insanely popular television game show,
"Who Wants To Be A Millionaire," hosted by Regis Philbin. With an average two hundred and forty thousand people
per calling in on "Contest Day" attempting to become contestants, and a twenty-nine million per show viewing
audience, it is safe to say that Americans are captivated by what many consider to be an easy avenue to achieving
financial success. The fact that “Millionaire” was originally a British television show merely emphasizes the extent to
which the quest for cash transcends national borders. It is no surprise, however, that the show achieved its greatest
success in America.[10] The very title of the show capitalizes on the core of the America Dream: wads of cash. The
question, "Who Wants to Be a Millionaire?" is a no-brainer. The American desire to be rich is at the very heart of our
nation’s capitalist economy. The show's producers have simply tapped into a value already prevalent in today's
society. In doing so, the show has become both a reflection of and a catalyst to greed and materialism.
What sets apart "Who Wants to Be a Millionaire" from game shows of the past is the sheer amount that a contestant
can win, combined with what at times seem to be amazingly easy questions.[11] Five players achieved the
$1,000,000 mark in 2000, and thus far two more have won the top prize in 2001. Dozens have won upwards of
$500,000. In addition to the high rewards, "Who Wants to Be a Millionaire" is successful because the average viewers
see themselves as potential winners. One does not need to be a "Jeopardy" brainiac to answer what word was spelled
backwards on the mirror in the movie "The Shining." It was "murder" of course. Or, even more simple, what do the
rings on the inner part of a tree signify?
The large jackpots and relative ease of "Who Wants to Be a Millionaire" is what places it in the realm of the American
Dream. Game shows of the past generally provided new appliances, trips, or cash winnings in the tens of thousands.
This new breed of big money game show fits the Dream because it capitalizes both on the psychology and spectacle of
being a "millionaire," as well as the idea that anyone can achieve this success. The latter fits directly into the tradition
that all individuals who are willing to work hard can achieve financial reward.
The irony of the actual title, "millionaire," is that the show's grand prize is not really enough to achieve the American
Dream of total financial independence. After taxes there is still a tidy sum, but it will have to be used wisely and
invested to see a person all the way through retirement. Being a millionaire today reminds one of the Austin Powers
movie in which the arch villain Dr. Evil holds the world hostage and demands "one million dollars," only to be told
that this is a paltry amount in today's economy. He quickly corrects the figure to "one hundred billion dollars."
If the amount won on "Who Wants to Be a Millionaire" does not really meet the perceptions of the American Dream,
the means of achieving the money are even more questionable. Where, one might ask, are the work ethic and industry
inherent to the traditional conception of the Dream? Some might argue that it takes a degree of intellect and
knowledge to win the game, thus some work, that needed to gain knowledge, does exist. Yet such an argument is
inherently weak because of the safeguards in the game, as well as the many instances of chance in advancing to the
final round. In the course of play, every contestant has three "lifelines" designed as an aid in choosing the correct
multiple-choice answer. The player can choose "Fifty-Fifty," in which the computer eliminates two incorrect
responses, leaving only two possible answers; "Ask the Audience" allows the player to quiz the studio audience for
the most likely correct answer; "Phone a Friend" enables the player to telephone one of five pre-arranged contacts
who help to determine the correct response. All of these devices take the weight of knowledge off the contestant, and
thus provide a real degree of luck. It certainly does not come close to the level of knowledge one must amass in order
to compete in a show like "Jeopardy," on which there are no multiple choice questions and a contestant is on his or her
own. Moreover, there exists a great deal of chance to even make it into the final round.[12]
"Who Wants to Be a Millionaire's" success is directly related to the belief that anyone with a little knowledge and lot
of luck can be a millionaire. Such a message resonates with the mass of people specifically because it seems to make
the American Dream so easily accessible. In the process, the most basic, traditional means of achieving the Dream,
industry, has been eradicated. Poor Richard's counsel to engage in "industry" is unnecessary in such a schema.
Nowhere in Franklin's writings did it say, "early to bed, early to rise, hope for some luck and you might win a prize."
The success of "Who Wants to Be a Millionaire's" ability to capitalize on the American Dream has spawned a series of
copycat shows. "Greed," Twenty-one," and, perhaps most interestingly, "Who Wants to Marry a MultiMillionaire,"
have utilized the same basic, capitalist American urge for hoards of money. The theme of the latter show is especially
amazing. On February 15, 2000, Rick Rockwell, an independent real estate investor, picked from among fifty female
contestants who agreed to actually marry a "multimillionaire" if chosen. This Fox Television "epiphany" was the
brainchild of executive Mike Darnell who stated that, "the money is a cutesy motivational factor. I think mostly
people are looking for a relationship."[13] The show's "winner," an emergency room nurse named Darva Conger,
claimed that neither was her goal. She simply wanted a free getaway to Las Vegas, where the show was broadcast,
and to "be on TV and wave to my family and friends." "It was just a lark," insisted Conger, I "was just in complete
shock" when I won.[14] When Matt Lauer of the Today Show pressed her, insisting that money must have been a
major factor in participating on the show, Conger claimed it was not, even though she walked away with a free
Caribbean honeymoon, a $35,000 engagement ring, and an Isuzu Trooper. The prizes totaled some $100,000. Even
though Conger has vehemently denied charges that money was a key motivation, and had her marriage with Rockwell
annulled, she has since posed for Playboy Magazine and earned what some report is upwards of $400,000.[15]
Whatever Conger's motivation, it is abundantly clear that many women jumped at the opportunity to achieve the
American Dream through a quickie marriage on a nationally broadcast show. Following the initial airing of "Who
Wants to Marry a Multimillionaire," the Fox web site crashed after it was flooded with requests from women to
participate on a subsequent episode.[16] Still, the show's rating success of 23 million viewers was greeted with
disdain by critics who charged that "the Fox program was dedicated to the proposition that people will do anything for
money, that, in fact, money is everything…." Some suggested that the show actually change its name to "People Will
Do Anything for Money," or "America's Funniest Prostitutes."[17]
Many viewers surely tuned into "Who Wants to Marry a Multimillionaire" simply because of the novelty. The fact
remains, however, that Fox executives consciously capitalized on the quest for the American Dream. They utilized the
same strategy as "Who Wants to Be a Millionaire," offering a huge cash prize that had both psychological and
spectacle appeal. The contestants also played their part in the Dream quest. Certain prizes were guaranteed, and the
possibility of hitting the jackpot was a very alluring 1 in 50. Contestants needed only a pretty face and a voluptuous
body. Like Regis Philbin's show, the traditional means of achieving financial success, through industry, was
eliminated.
State lotteries
"Who Wants to Be a Millionaire" and similar game shows are only the latest craze in capitalizing on the American
Dream. Even more well known, and often more lucrative are state run lotteries. All one needs is "A Buck and a
Dream," boasts the New York Lottery. Just as in the game shows, the lottery focuses on the hope of easy money with
minimal effort. One does not need to work hard in order to choose a series of numbers.[18] In the lottery scenario,
one works for a living only until they hit that big Lotto or Powerball score. The Illinois Lottery's advertisement in a
Chicago ghetto encouraged, "This could be your ticket out."[19]
Whereas the payoffs for the big jackpot lotteries are significantly higher than the "Millionaire" games, a May 2000
Powerball game reached 350 million, the odds of winning are equally long. With an average 1 in 12 to 14 million
chance of winning, and 1 in 80 million for the big prizes, the degree of luck needed is astronomical.[20] Still,
Americans flock to the lottery when the possibility of scoring big is most remote. In 1998, a 300 million dollar
jackpot caused thousands of New Yorkers to flood across Connecticut state lines. Greenwich, Connecticut stores had
lines 500 people long waiting upwards of 6 hours to purchase tickets. Forced to deal with traffic gridlock and
disorderly conduct, the town was forced to spend some $80,000 for police and other emergency services. During the
same Powerball drawing, the New Hampshire Lottery executive director held a press conference requesting people not
to spend beyond their limits. Notwithstanding such warnings, one man admitted dishing out $3,000 for tickets.[21]
The Powerball and Lotto frenzy is easy to explain: most everyone believes in the American Dream. And though the
majority will admit that winning is a long shot, they nevertheless fantasize about the possibility. Having that kernel of
hope is part of the
Dream. It is the state lotteries' ability to capitalize on this fantasy that makes them so successful. Operating in 37
states and the District of Columbia, lotteries sales for 1996 totaled 42.9 billion dollars, 38% of which was net revenue,
making lotteries by far the most profitable form of gambling. Most gambling venues pay back about 90% of what
they take in, whereas lotteries pay out only about 50%.[22]
Yet lotteries have been around for literally hundreds of years. America was created with their help. In 1612, the
British crown authorized the Virginia Company of London to hold a lottery to aid the Jamestown colony. During the
colonial period and after, Americans held lotteries to raise funds for internal improvements and defense.[23] Thus
how are the lotteries today different and why do they influence the traditional meaning of the American Dream?
The simple answer is advertising. State lotteries have learned the importance of effective, comprehensive marketing.
Up until 1975 the federal government prohibited states from advertising, but since the ban was lifted lotteries have
developed sophisticated, targeted promotions.[24] In 1997 they spent 400 million dollars marketing the various Lotto
and instant games, an amount that doubled the percentage spent on advertising by most corporations.[25] Yet it is
not merely the sheer scope of the advertising, but, rather, its effectiveness. Many critics argue that lotteries target poor
groups who are least economically able to cope with the expense. In doing so, states are capitalizing on those who are
perhaps most in need of realizing the American Dream. The Ohio SuperLotto game, for example, suggested in its
advertising plan that "promotional 'pushes' be targeted as early as possible in the month. Government benefits, payroll
and Social Security payments are released in the first Tuesday of each calendar month. This, in effect, creates
millions of additional, non-taxable dollars in the local economies of which the majority is disposable."[26]
The Illinois Lottery engaged in an equally calculated strategy to entice an economically depressed neighborhood in
west Chicago. Renting space on 40 billboards, the state promised, "How to get from Washington Boulevard to Easy
Street." The advertisement's implicit "rags to riches" message played on the most core aspect of the American
Dream. And studies show that such promotions work. The poor spend a larger percentage of their income on lottery
tickets than the more affluent.[27]
Just as significant, the lotteries purposely mislead players about their chance of striking it rich. One study found that
70% of television advertisements portrayed people winning. Moreover, the study noted that states purposely
disguised the odds and, in fact, gave the impression that there existed a good chance of winning.[28] Even some
government officials have grown concerned about such tactics. In 1997, New York Governor George Pataki requested
lottery officials to "tone down" their, "Hey, you never know" promotion, and added that lottery marketing should
avoid "raising unrealistic expectations."[29] One might ask, is there no law to stop such deceptive commercials? Of
course, the Federal Trade Commission has "truth-in-advertising" standards. Yet because lotteries are state entities they
are not bound by the same requirements to which private businesses must comply.[30]
Thus lotteries are free to spend hundreds of millions on what is often disingenuous advertising specifically designed to
manipulate people's quest for the American Dream. As one author noted, "the lottery, it is said, exploits people's
yearnings for a better life, offering them a sucker bet wrapped in promotional hype."[31] Another writer criticized
that, "our government shamelessly panders to dreams. They advise people, many of them poor, that the lottery is a
good way to get money….If there ever was a get-rich-quick scam, this is it - perpetrated by government."[32]
Similar to the "Millionaire" game shows, one of the key components to realizing the American Dream is luck. Once
again, Americans are sent a message that success can be achieved, not through industry, but, rather, via chance. Nor
have critics of the lotteries missed this phenomenon. Michael Sandel insisted that lotteries send "a message at odds
with the ethic of work, sacrifice and moral responsibility…." Instead, people are told that "with a little luck they can
escape the world of work to which misfortune consigns them." Another critic agreed, arguing that, "in short, lotteries
may undercut the ethic of work and achievement, replacing it with an ethic of luck."[33]
Yet lotteries, in fact, do even more. They play both on the ethic of luck and attempt to fool one into believing that
there is something more than luck -- that skill is a component of winning. The National Gambling Impact Study
Commission noted that lottery advertising specifically sought to persuade players that they could "influence their odds
through the choices of numbers they pick."[34] Moreover, there are a plethora of books that promise to teach the
would-be lottery winner: Found Money: How to Consciously Win the Lottery; The Basics of Winning Lotto-Lottery;
How to Win: More Strategies for Increasing a Lottery Win.[35] The implication is that through hard work one can
develop the skill necessary to win the lottery, and thus the American Dream.
With such a message one might argue that the American Dream is alive and well, that its integrity has been
maintained. Industry, Ben Franklin's traditional ingredient, is realized through calculation and superior planning.
Nothing, however, could be further from the truth. The lottery is unquestionably random. One needs only a buck, a
dream, and unimaginable luck. Thus, like the "Millionaire" game shows, state lotteries, through carefully targeted
advertising, have played upon and drastically altered the customary conception of the American Dream.
Compensation lawsuits
If game shows and lotteries have seemingly opened a path to fulfilling the American Dream, so too has the proverbial
"million dollar injury." Litigation is as American as apple pie, though it does not leave so sweet a taste in the mouth
of most Americans. Indeed, many view the legal profession with disdain, especially personal injury lawyers whose
ubiquitous "have you been involved in an accident? You may be entitled to compensation" advertisements encourage
the public to believe that easy money can be had. Such "ambulance chasers" have spawned hundreds of lawyer jokes.
"What's a million lawyers at the bottom of the Sea? A good start." Such humor, though laughed off in passing, says
something about the legal profession in the eyes of the public.[36] Still, Americans file tens of thousands of law suits
each year, many in the hopes of cashing in on a personal injury or product liability case. Some scholars have likened
such strategies to playing the lottery:
    The operation of the tort system is akin to a lottery. Most crucial criteria for payment are largely controlled
    by chance:(1)whether one is lucky" enough to be injured by someone whose product or conduct can be
    proved faulty; (2) whether the party's insurance limits or assets are sufficient to promise an award or
    settlement commensurate with losses and expenses; whether one's own innocence of faulty conduct can be
    proved; and (4) whether one has the good fortune to retain a lawyer who can exploit all the variables before
    an impressionable jury, including graphically portraying whatever pain one has suffered.[37]
Equating such a scenario to achieving the American Dream may be viewed as extremely strange at best. Yet the
similarity between game shows, lotteries, and tort litigation is not as farfetched as one might think. In all three
situations the desired end is a trip to the bank with a fat check. In recent years a number of court cases have resulted in
just such an outcome. If a plaintiff wins a lawsuit he will most likely receive not only compensatory damages (those
that reimburse for medical expenses, lost wages, etc.), but may also be awarded punitive damages (those that punish
the defendant for negligent or dangerous behavior). Moreover, in order to send a message to the offending company
jury awards for punitive damages often far exceed compensatory damages.
Thus like game shows and lotteries, injury and product liability lawsuits can be extremely lucrative. And once again,
in such a process the traditional road to the American Dream is circumvented. Ben Franklin's industry and Lincoln's
labor ethic are not components of a plaintiff's road to riches. The classic American ingredients of hard work, frugality,
and self-reliance do not appear in the lawyer's brief. America's new Poor Richard mantra has become "Early to bed,
early to rise, file a law suit and sue till' they cry."
There is, however, a strange component within the legal avenue to the American Dream. In neither the game show nor
the lottery are people required to physically injure themselves in order to win. Injury is thus a unique component of
achieving the American Dream through litigation and therefore begs the question, "who in their right mind would
trade health for a financial bonanza?" There are, of course, those who do, or at least fake injury. The Discovery
Channel recently ran a special on the effectiveness of video surveillance by casinos to tape and prosecute individuals
who feign injury on casino property and subsequently file fraudulent lawsuits.[38]
Heading off such suits with the use of video, however, is hardly the norm. There are undoubtedly thousands of cases
in which plaintiffs fake injury and symptoms in order to reap financial reward. The difficulty in assessing this
problem is the lack of dependable information on the subject. As one legal scholar notes, "we know remarkably little
about frivolous litigation. Reliable empirical data is extremely limited, and casual anecdotal evidence highly
unreliable. We have no clear explanation of why frivolous suits are filed or even common agreement on what
constitutes a 'frivolous suit.'"[39]
 For those attempting to cheat the system through fictitious injury and false testimony there is little doubt that they are
in it for the money, and in doing so attempting to circumvent the traditional means of attaining the American Dream.
Yet what of those who are genuinely injured and sue? Are they too culpable for making an end run around hard work
and self-reliance in order to gain financial independence? Do the truly injured not deserve some degree of
compensation for pain and suffering? Many Americans would agree that blatant negligence on the part of one party,
resulting in injury to another should be reasonably compensated. In this respect, one might argue that at the outset
there existed no willful attempt on the part of the injured to make a payday out of their predicament. Still, the
readiness of some individuals to file lawsuits, the sizable jury awards, and the failure of plaintiffs to take
responsibility for what often seems clearly hazardous behavior makes litigation look like the yellow brick road to the
American Dream. One merely needs to look at a handful of cases to see why tort reform has become such a hot topic
in the United States.
 When a 46 year old Korean immigrant was electrocuted by the "L" train line in Chicago his family sued and won $3
million in damages. Such an award may not seem outlandish if Mr. Lee had simply stepped onto a faulty rail line or
bumped into an exposed wire. Instead, he walked home from a party with a blood alcohol level three times the legal
limit, decided to walk past three signs that stated "Danger," "Keep Out," "Electric Current," then proceeded to urinate
on a live rail line. He was electrocuted instantly. For contributory negligence the $3 million reward was cut in
half.[40]
In Hanover Park, Illinois an unlicensed Thomas Redlin, after having been drinking, borrowed a friend's motorcycle
and ultimately crashed into an unmarked median strip. He was paralyzed from the waist down and sued the town for
failing to notify drivers of the median. His $6.75 million award was lessened by 10% because of contributory
negligence.[41]
In both Illinois cases huge cash settlements provided either the family or the injured party with financial freedom; the
goal of the American Dream. Assuredly, the parties in the two cases would most likely prefer to have their health
intact rather than the money. Thus we are again faced with the "strange" factor in the litigant's quest for the American
Dream. Neither of these gentlemen awoke in the morning and decided that today will be the day that leads me to
financial success. In the case of game shows and lotteries, participants are actively pursuing the Dream from the
start. For most, the lawsuit "lottery" is a decidedly reactionary strategy. It is also one that often divorces the injured
party from taking responsibility for their own actions, something that is a chief complaint among opponents of such
lawsuits. Why, they argue, should someone else have to pay when an individual's conduct is clearly negligent and
dangerous?
The failure to take responsibility is another element that ties tort litigation to changing conceptions of the American
Dream. The accident victim who causes their own injury but expects someone else to pay is very similar to the
individual who believes that financial success is owed to them regardless of their lack of work ethic. In both cases,
neither party accepts responsibility for their situation. Instead, they maintain a sense of entitlement that justifies their
belief.
Connected to the twin problems of failure to take responsibility and harboring a sense of entitlement is the
encouragement of others to engage in the same conduct. When an injured party who is clearly responsible for their
own predicament, such as both Illinois cases, files a lawsuit and wins, there can be little doubt that it contributes to a
litigious environment in which others look to the legal system to get their piece of the financial pie. The end result is
a society that is ready to sue on almost any provocation. And the goal is always the same: money. Not all lawsuits
result in million dollar awards, but they still provide significant cash incentives for seemingly innocuous incidents.
The 1998 American Bar Association Journal reported amounts won in "The Torts of Summer." Slipping on algae in a
swimming pool gained one Florida resident $41,000. Getting hit by a softball during warm-ups in the same state
provided another individual with $52,000. A collision in a splash pool at a New Jersey water park resulted in a reward
of $130,000. Burns from hot coals at a public beach in California granted the victim $435,000.[42]
Equally unbelievable is the Miami, Florida woman who collected $250,000 after binging on cocaine and alcohol, then
splashing herself with alcohol, was burned when she attempted to light a barbecue. Or the San Francisco mugger who
was awarded $24,595 after being injured when the cab driver he was attempting to rob pinned his leg to a wall until
the police arrived.[43] The list goes on and on.
These seemingly "frivolous" lawsuits have initiated a major push for tort reform. State legislatures have responded
with a variety of measures: caps on punitive damages, abolishment of punitive damages if a product complied with
state or federal regulations, requiring plaintiffs to waive all rights of medical confidentiality in cases involving injury,
proposals for the losers in tort cases to pay court costs.[44] The Federal Government has also taken up the tort reform
banner. Legislation concerning product liability has been introduced in Congress, and failed, each year since
1983.[45] In 1996, Newt Gingrich made it a staple of the Republican Party's "Contract With America."[46] The
reason for such action on the part of the nation's legislators is simple: like many Americans they are tired of what one
Illinois lawmaker described as "unfair, ridiculous, frivolous, silly lawsuits."[47]
Opponents of tort reform are equally adamant in their denunciation of reform legislation, arguing that in actuality only
a very small percentage of potential tort plaintiffs pursue litigation, that tort claims have not increased over the last
decade and, in fact, product liability cases have declined.[48] Moreover, they insist that reform would reduce legal
protection for "at-risk" individuals such as the poor, the elderly, and the sick. What lawyer, argues opponents of
reform, would take on cases that necessitate significant amounts of time, money, and labor unless they could be
certain of victory?[49]
The case that has become the poster child for both pro- and anti-tort reform advocates is the infamous McDonald's hot
coffee spill in which an elderly woman was awarded $2.9 million after accidentally pouring hot coffee on to her lap
and suffering a serious burn. On the surface the case looked like a quintessential example of tort litigation gone
haywire. A woman takes what is known to be a hot beverage, places it between her legs in a car, and proceeds to spill
the contents. For this example of utter negligence she is awarded millions. Critics of a legal system run amok had a
field day, publishing headlines critical of the verdict: "Big Bucks for Dumb Luck? Coffee is Hot and Life is Full of
Risks--Deal With It;" "The Legal Wheel of Fortune is Spinning Out of Control;" "A Great Year for Victims, Some of
Whom Could Be Dangerous;" "Enough Already!"[50]
America's popular culture comedians also latched on to the absurdity of the case. David Letterman included as
number four on his "Top Ten List of Dr. Kevorkian's Tips for Summer," that one should take a bunch of friends to
McDonald's and pour hot coffee on each other. On another show Letterman suggested that the number eight, blizzard
safety tip was to clear snow off of the driveway with just one scalding hot cup of McDonald's coffee. Jerry Seinfeld
even aired an episode in which Kramer filed a hot coffee lawsuit.[51]
As a result of such commentaries, many Americans increased their distaste for what they considered an already
ridiculous legal system that allowed irresponsibility to be rewarded. The flip side of the case, however, and what anti-
tort reform advocates continually attempt to point out is that the verdict was in fact justified. Additionally, the verdict
was ultimately overturned. Stella Liebeck, the burn victim, received only $640,000. Moreover, the facts in the case
were more serious and egregious than most realized. Liebeck suffered second and third degree burns, spent a total of
three weeks in the hospital, and underwent surgery for skin grafts. She first contacted McDonald's only to request
$10,000 for medical bills, which they refused. Additionally, McDonalds, who served their coffee at a scalding 180
degrees, had received upwards of 700 reports of similar burn incidents, but did nothing to address the problem.
Finally, the $2.3 million in punitive damages represented exactly two days of McDonald's coffee sales. The jury was
attempting to send a message to the fast food giant.[52]
The reality of the case, especially what seems like McDonald's wanton indifference to complaints that their coffee was
too hot, may cause some to rethink the importance of big cash settlements in product liability cases. This is certainly
the hope of anti-tort reform advocates. Reality, however, nor tort reform, are the real intent of the present article.
Most Americans do not know the specifics of the McDonald's case. They have seen only that a woman was awarded
millions for spilling coffee. The fact that Stella Liebeck was not on a litigious quest to fulfill the American Dream
makes no difference. Her pyrrhic victory encouraged others who were more than happy to use the hot beverage spill
to reap economic reward. Since Liebeck's 1994 incident a host of hot beverage lawsuits have been filed against
McDonald's, Burger King, and the like.[53] Thus the moral of the story is that a variety of people viewed the original
case as a lesson plan for achieving the American Dream.
Opponents of tort reform insist that the legal system is not overburdened with personal injury and product liability
cases. It is, they argue, only a handful of very publicized cases that create such a perception. And those cases are
often reported out of context. The McDonald's suit is a case in point. Yet in America it is the perception that counts.
One Gallup poll reported that only 41% of the public believes that lawsuits are justified "about half of the time."
Other research shows that there is "a widespread impression among jurors that the civil litigation system is
overburdened by claimants seeking awards in meritless cases."[54]
The mass of Americans are not familiar with legal articles that may show such assumptions to be faulty. The seeming
reality of the situation is that some litigants are getting rich as a result of their own stupidity and negligence. Their
failure to take responsibility for their actions, a real sense of entitlement, and a social atmosphere that encourages
lawsuits, leads them to the personally injury lawyer's doorstep. In doing so the injured begin their litigious quest for
the American Dream. For the plaintiff, there is no industry, no work ethic, and no perseverance or self-reliance
involved. As a result, the traditional road to the American Dream has been dashed.
Conclusion
The "rags to riches" legend has and continues to be a cornerstone of the American Dream. The traditional message
taught that through hard work, frugality, and self-sacrifice one could achieve financial success and social mobility.
Ben Franklin counseled industry, Abraham Lincoln sang the praises of the northern labor system, and Horatio Alger
instilled hope in generations of Americans. All three helped to establish basic guidelines for success in a land of
infinite possibility.
There are unquestionably many Americans who continue to abide by such tenets and in doing so are rewarded for
their efforts. Yet there are also those who have come to believe that the American Dream's promise of riches is just
that, a promise, and as such they feel entitled to instant financial success. Nor has the socio-corporate climate in
America disappointed such a belief. Savvy television producers and marketing executives have latched on to the core
of the American Dream. They understand that Americans are enthralled with striking it rich. Thus millionaire game
shows are designed to make winning seem easy. Lotteries are marketed in such a way that one thinks they have a real
shot at cashing in. The reality in both instances is that achieving the American Dream through such means is a long
shot at best. Too much chance exists. Too much luck is necessary.
What is the end effect on society? Do millionaire game shows and promises of lottery millions help to further erode
the ethic of work and self-reliance that once embodied the American Dream, replacing it with an ethic of luck? Or are
these sources of instant gratification merely products of an ethic already lost to some Americans? Perhaps the truth
lies somewhere in the middle.
The even darker side to this cultural phenomenon is how the sense of entitlement has spilled over into a lack of
responsibility. The fact that so many Americans are willing to utilize litigation to cash in on the American Dream is
disheartening. Failing to take responsibility for their own mistakes, plaintiffs look to the legal system to make
misfortune into fortune. Again, marketing and an avalanche of advertising by personal injury lawyers helps encourage
would-be injury victims. Still, the readiness of people to sue is a key social factor.
Ultimately, most Americans would like to achieve the American Dream of financial independence. Yet it is the means
to achieving it that are essential to the nation's ethical foundations. It seems that many Americans covet the easy road
to the Dream and in the process undercut the core values that established the Dream in the first place. Equally
culpable are the big businesses that capitalize on the quest for the Dream. In an ironic sense, such businesses are
fulfilling the Dream for themselves while dangling the possibility of the Dream over the heads of the public. There
can be little doubt that the producers of the millionaire games shows, the state lotteries, and lawyers are getting rich
on other people's yearning for the American Dream.
                                         Poor, Black and Left to Die

                     What Hurricane Katrina Shows About American Capitalism

        By Philip Locker

Hurricane Katrina was a natural disaster. But the massive death, destruction, and misery that followed in its
wake was entirely man-made and preventable. It was the poor, the old, the sick - overwhelmingly African
American - who had no means to flee the storm that bore the brunt of the suffering.
One million people in the Gulf Cost have been displaced, many without homes or work. Thousands are feared dead.
As the New Orleans levees broke, they unleashed a hell on earth for tens of thousands of poor, black residents left
abandoned. The city descended into squalor and abject social misery, with many literally dropping dead in the streets
for lack of care.
While the city government called for people to evacuate before the storm hit, it was on a "free market" basis. No
public transportation or shelter was provided for those without a car or who could not afford to rent a hotel room. 28%
of people in New Orleans live in poverty, and of those 84% are black. 35% of black households did not have a car.
Those who could not leave were told to go to the New Orleans Superdome. But what they found when they arrived
was a scene of unimaginable horror. Approximately 50,000 people were trapped for days in deadly heat and stench at
the overflowing Superdome and Convention Center.
Once in the stadium, they were not allowed to leave. "They're housing us like animals," said Iiesha Rousell,
unemployed after four years in the Army, unable to contain her fury. "It's worse than a prison" was another comment.
One woman worried what would become of her after being sent out of New Orleans, asking "What's going to happen
to our jobs? How can we take care of our families?" (NY Times, 9/1/05)
"There's nothing offered to them, no water, no ice, no C-rations. Nothing for the last four days," reported NBC
journalist Tony Zumbada. Desperate crowds were reduced to chanting "Help us! Help us!" in front of TV cameras,
while others begged "Don't leave us here to die."
But no help came for four days.
In the richest country in the world, the U.S. government, which is capable of fighting a $300 billion war in Iraq, failed
to mobilize emergency aid for the tens of thousands of people in desperate conditions in the Gulf Coast.
The New Orleans Times-Picayune noted that the hellish conditions in the Superdome "stood in stark contrast to those
of people nearby in the restricted-access New Orleans Centre and Hyatt Hotel, where those who could get in lounged
in relative comfort ... guests were being fed 'foie gras and rack of lamb' for dinner, according to a photographer who
stayed there, while the masses, most of them poor, huddled in the Dome." A line of state police armed with assault
rifles drove the crowds of evacuees back from the entrance of the hotel.
When buses finally arrived to evacuate people from the Superdome, the effort was interrupted to allow the Hyatt
Hotel guests to be brought out first "much to the amazement of those who had been crammed in the Superdome since
last Sunday. 'How does this work? They (are) clean, they are dry, they get out ahead of us?' exclaimed Howard Blue,
22, who tried to get in their line. The National Guard blocked him as other guardsmen helped the well-dressed guests
with their luggage." (Associated Press, 9/4/05)
Just as outrageous was the callous disregard for human suffering and the colossal mismanagement by the corrupt Bush
administration. This criminal negligence was so staggering, even Republican politicians like Louisiana's Senator
David Vitter gave the federal government an F for its handling of the whirlwind after the storm.
Department of Homeland Security Secretary Michael Chertoff arrogantly blamed the hurricane's victims for their
plight. "The critical thing was to get people out of there before the disaster," he said. "Some people chose not to obey
that order. That was a mistake on their part."
In a scathing editorial, Maureen Dowd wrote "Michael Brown, the blithering idiot in charge of FEMA - a job he
trained for by running something called the International Arabian Horse Association - admitted he didn't know until
Thursday that there were 15,000 desperate, dehydrated, hungry, angry, dying victims of Katrina in the New Orleans
Convention Center. Was he sacked instantly? No, our tone-deaf president hailed him in Mobile, Ala., yesterday:
'Brownie, you're doing a heck of a job.'" ("United States of Shame", NY Times, 9/3/05)
Man-Made Disaster
There was nothing natural about the transformation of New Orleans into a massive graveyard for the urban poor.
Leave aside for the moment the growing evidence that climate change is causing more frequent and stronger
hurricanes and tropical storms. Leave aside that the marshlands of Louisiana, which historically provided natural
protection against flooding, has been sold off and destroyed in corrupt deals between land developers and politicians.
More immediately, Bush's war on Iraq, tax cuts for the rich, and vicious cuts in funding for vital infrastructure and
social services were centrally at fault for the disaster.
Repeating his "who could have known?" line from the Iraq war, Bush claimed, "I don't think anyone anticipated the
breach of the levees." But the fact was that the danger of a major hurricane breaking the levees and flooding New
Orleans and was widely discussed for years before.
Since 1995, the Army Corps of Engineers spent $430 million on shoring up levees and building pumping stations. But
at least $250 million in crucial projects remained. Yet after 2003, the flow of federal dollars dropped to a trickle.
In June 2004, the emergency management chief for Jefferson Parish fretted to the New Orleans Times-Picayune: "It
appears that the money has been moved in the president's budget to handle homeland security and the war in Iraq, and
I suppose that's the price we pay. Nobody locally is happy that the levees can't be finished, and we are doing
everything we can to make the case that this is a security issue for us."
The funding for this crucial public infrastructure was slashed to pay for Bush's Iraq adventure and tax cuts for the rich.
Yet at the same time, Bush and Congress agreed to a $286.4 billion pork-filled highway bill with 6,000 pet projects,
including a $231 million bridge for a small, uninhabited Alaskan island.
Not only was the money depleted by the Bush folly in Iraq; 30% of the National Guard and about half its equipment
are in Iraq. How long did this delay the rescue operations and how many lives were needlessly lost because of it?
This has exposed in the starkest fashion the lie that the Iraq war is about making ordinary Americans safer. Nor is the
U.S. occupation helping the Iraqi people. Many are asking, why has funding on prevention of natural disasters been
cut back to $187 million per year while we spend over $5.6 billion per month on the Iraq war? Tens of millions will
no doubt conclude that we need to bring the troops home now and that money should go towards relief, not war.
Racism and Poverty
These events have graphically illustrated the reality of widespread poverty, racism, inequality, and social deprivation
in America, particularly the squalid conditions in the inner cities.
The New York Times wrote: "What a shocked world saw exposed in New Orleans last week wasn't just a broken levee.
It was a cleavage of race and class, at once familiar and startlingly new, laid bare in a setting where they suddenly
amounted to matters of life and death." (9/2/05)
This poverty and racism did not fall out of the sky. It comes against the background of a massive polarization of
wealth within the U.S. over the past 30 years, reaching levels unseen since the 1920s.
A new Census Bureau report showed that in 2004 an additional 1.1 million Americans were thrown into poverty, the
fourth consecutive year poverty rose, bringing the total up to 37 million. In many cities, the situation is even worse. In
New York City, for example, the poverty rate rose to 20.3%.
And while it is people of color who disproportionately are poor, tens of millions of white people also live in poverty.
In fact, since 2003 the largest increase in poverty was among whites, going from 8.2% to 8.6%. The same report also
announced that household incomes had not increased for the past five years - the first time ever recorded.
There is a boiling rage throughout the country at the completely incompetent, criminal failure of the government to
help the victims of Katrina. But this is felt most intensely in the African American community, which is outraged at
the naked racism that led to the deaths of thousands. Hip-hop star Kanye West captured this mood when he said live
on national TV, "George Bush doesn't care about black people."
West also pointed to the repulsive, racist media coverage, saying "I hate the way they portray us in the media. If you
see a black family, it says they're looting. See a white family, it says they're looking for food." Most of the "looting"
that took place was desperate people taking vital essentials - water, food, diapers - in order to survive.
In response, the police were redirected away from search and rescue to defending the private property of businesses
like the GAP and casinos. Louisiana Governor Kathleen Blanco, a Democrat, declared "war on looters." Referring to
newly-deployed National Guard troops fresh back from Iraq, she said "They have M-16s, and they are locked and
loaded. These troops know how to shoot and kill and they are more than willing to do so if necessary. And I expect
they will." (Seattle P-IReuters, 9/2/05)
What did they expect stranded people to do? Get some cash out of the broken ATM and pay the non-existent sales
clerk for the bottle of water? This response follows the twisted logic of capitalism, which upholds the scared principle
of private property over saving people's lives.
It is true some horrifying crimes, like rapes and murders, were carried out by a small but lethal number of criminals
and gang members. However, this is a commentary on the brutal, inhuman character of U.S. capitalism. It is the result
of a system that treats as utterly "normal" unleashing a murderous policy of "shock and awe" on the Iraqi people,
flattening the entire city of Fallujah, or using the death penalty on children.
But the crisis also brought out the enormous self-sacrifice and solidarity that exists among ordinary people. There
were numerous stories of survivors risking their lives to save others. Across the country, millions of ordinary people
took action to help, far faster than Bush and his cronies.
The media's focus on criminals was completely out of proportion with the incomparably greater crime of the
government failing to evacuate the poor or deliver emergency aid. Where is the media outcry over the massive looting
by the big oil and gas companies, who are gouging consumers with outrageous price increases at a time when they are
making record profits? Even less is said about U.S. imperialism's record of looting poor countries, as we have seen
with the occupation of Iraq.
The events in New Orleans have driven home the fact that racism is far from eradicated from our society. "Is this what
the pioneers of the civil rights movement fought to achieve, a society where many black people are as trapped and
isolated by their poverty as they were by legal segregation laws?" wrote Mark Naison, director of the Urban Studies
Program at Fordham. "Hurricane Katrina reveals the fault lines of a region and a nation, rent by profound social
divisions."
While the civil rights movement of the 1950s and '60s succeeded in winning legal equality for African Americans, the
underlying system of capitalism remained intact. As Malcolm X warned, "you can not have capitalism without
racism." The continuation of capitalism, and its economic crisis since the mid-1970s, has meant that not only has
racism remained, but that even the social conditions for African Americans have actually worsened since the 1960s. It
is time we drew the necessary conclusions from this experience and fight to overthrow the system, capitalism, that
breeds poverty, racism, and inequality.
System Failure
It took almost two days for Bush to end his fishing-and-biking vacation when tens of thousands of poor and black
people were suffering in appalling conditions in the Gulf Coast. But he was much quicker off the mark last March,
cutting short his Crawford vacation to storm back to Washington within hours to sign a bill to "save" Terri Schiavo.
The President issued a statement in which he promised "to stand on the side of those defending life for all Americans,
including those with disabilities."
The supposedly compassionate pro-life, pro-family moral values of George Bush have been exposed as utterly
hypocritical and fraudulent. Bush's defense-of-life policy did not prevent him from cutting crucial funding for
strengthening levees or social services for the poor, in order to pay for tax handouts to the richest Americans and for a
war that has killed 2,000 U.S. soldiers and 100,000 Iraqis.
The only thing that can be said in Bush's defense is that the blame is being overly focused on his administration when,
in reality, this was not simply a failure by Bush or by the local authorities along the Gulf Coast. It was a system failure
- a result of free-market capitalism that is myopically focused on short-term profits and on extending U.S. corporate
power around the world, while treating poor people as expendable.
It is true that the Bush gang were the ones who lead the charge for the war on Iraq and the tax cuts for the rich. But
what did the so-called opposition party, the Democrats, do? They not only failed to seriously fight these policies, they
went along with them. The Democrats in Congress voted to support Bush's "war on terrorism," the Patriot Act, the war
on Afghanistan, the Iraq war, and the hundreds of billions of dollars for the occupation of Iraq, Bush's tax cuts for the
rich, and "No Child Left Behind." In reality, the Democratic Party, like the Republicans, represents the interests of the
corrupt corporate elite that dominates U.S. society.
The cutting of funds for the levees is only a glaring expression of the general neo-liberal drive by the entire political
and corporate establishment over the past 30 years. The ending of the post-war economic boom in the mid-1970s
opened up a period of economic crisis, compelling big business to launch a major offensive against the working class
to drive down wages and conditions in order to maintain their profits. To meet Corporate America's tax-cutting
demands, politicians have gutted essential social services and the public infrastructure, allowing inner cities to rot.
Of course, this neo-liberal dogma is extremely shortsighted. A refusal to invest tens of millions of dollars into
strengthening levees has led to a catastrophe that will cost hundreds of billions of dollars. This shows the extreme
shortsightedness and anarchy inherent in capitalism. Decisions are made by a small elite on the basis of today's, and
maybe tomorrow's, "bottom line." Comprehensive planning, investment in preventive measures or public
infrastructure, and democratic involvement is foreign to capitalism's fundamental tendencies.
This crisis shows the basic functioning of modern society is increasingly incompatible with the requirements of the
profit system, which ruthlessly sacrifices social needs on the alter of private profit. Katrina laid bare the complete
disregard for the needs of society by the arrogant, money-mad elite who rule the country on behalf of their corporate
masters. While the administration of George W. Bush is particularly venal, ruthless, and shortsighted, it nonetheless is
only an extreme expression of a system in its decay that is unable to develop human society any further.
Socialist Solution
Katrina is a window into our future on the basis of capitalism - "horror without end" for the poor, the oppressed, and
the working class. There will be more disasters of this sort, particularly if drastic action is not taken to reverse global
warming. There will be more imperialist wars. There will be growing poverty and racism.
That is why it is urgent we fight to put an end to capitalism and create a new, socialist society based on human needs.
The entire disaster clearly shows the need for social planning and the failure and anarchy of free-market capitalism.
How can disasters be prevented when decisions are being made based on the short-term profit drive of Corporate
America?
How can we possibly address climate change without a democratically planned economy? Are we to hope that the
giant oil and auto corporations will, on their own, decide to set aside their massive profits and wealth for the long-
term good of humanity?
How can the massive evacuee crisis be dealt with without massive, federally-funded, public works projects, directed
by accountable, democratic bodies?
We call for a real relief effort, which is based on the needs of the poor and working class victims of Hurricane Katrina:
      Full care and compensation for Katrina victims
       All victims of this crisis should be fully compensated for all losses by the federal government. Free medical
       care for all those in need. Ensure that all affected people receive a stable income to get back on their feet after
       this tragedy. All those from the affected counties who have lost their jobs, have been displaced, or are in need
       should receive a living wage of $500/week for up to 3 years. Immediate interest-free loans for workers, small
       businesses, and small farmers who had their livelihood destroyed in the hurricane.
      Initiate massive public works program to rebuild and re-employ the Gulf Coast
       Immediately begin the construction of decent, affordable public housing in the safe areas for all those in need
       due to the hurricane. Employ the jobless victims of Katrina in public works programs to rebuild the counties
       affected. All rebuilding and relief workers must receive a living wage with union rights and benefits. Ensure
       the homes, workplaces, schools, and streets of New Orleans are cleansed of the toxic contamination caused
       by the flooded sewage and oil and chemical spills.
      Stop racial and class discrimination in relief, compensation, rebuilding, and policing
       All relief money received through government and charity should not be put in the hands of big-business
       politicians and bureaucrats. Instead, oversight committees elected from the affected communities, evacuees,
       and relief workers should control the funding and administration of relief and rebuilding efforts. Don't
       bankrupt state and local budgets for the relief. The federal government should hand over billions of dollars
       for the relief effort. Don't cut social service funding like healthcare and education to pay for relief and
       rebuilding efforts.
      Stop profiteering off tragedy!
       We need price controls on gas and other products to protect consumers. Construction should be done for the
        public good, under democratic community control, not for the profits of a few corporations.
      Pay for rebuilding by ending the war in Iraq and taxing big business
       This disaster is the direct result of the Bush administration defunding levy strengthening and other disaster
       prevention programs to pay for the war in Iraq and tax cuts for the rich. Bring the troops home and redirect
       military resources to rebuilding. This disaster results from decades of corporate tax cuts by the two major
       parties, and the resultant underfunding of infrastructure and inner cities. Make the rich and Corporate
       America pay for reconstruction.
Each of these measures, absolutely vital for those displaced to be able to restart their lives in any decent fashion, go
directly against the logic of capitalism, which teaches that the "market" can magically solve social needs.
Big business, the real culprits behind this tragedy, will claim they cannot afford to pay for such a massive relief effort.
If that is true, then we cannot afford to live under their inhuman, rotten system.
That is why socialists draw the conclusion that we need to change the entire system. We need a planned economy,
where decisions about investment, about what is produced and how things are produced, are democratically decided in
the interests of the majority, rather than according to the undemocratic short-term profit calculations of a small
minority who own the wealth.
This can only be possible on the basis of taking the giant corporations that dominate the economy into public
ownership. Instead of CEOs deciding what working people are paid and how companies should invest their resources,
this would allow workers to elect management teams and democratically decide pay scales and investment priorities.
Socialism would mean that instead of big business running our media, controlling the political system, deciding the
priorities of our country, politicians would be directly elected from neighborhood and workplace committees, paid an
average worker's wage, and immediately recallable when they are not representing their constituents.
Political Consequences
In the wake of Katrina, a political storm is sweeping across the country with the force of a category five hurricane.
Nor will it simply blow over. There is far more horror to come, as more bodies are found and more facts come out. Its
full effects, which will shake U.S. society to its foundations, will be felt over a period of time as tens of millions
across the country begin to absorb the full ramifications of these events.
The impact will be incalculable, transforming U.S. politics for the whole next period on a scale similar to 9/11. But
rather than strengthening Bush and triggering a reactionary wave like 9/11, Katrina is the "anti-9/11," as right-wing
columnist and supporter of the Iraq war David Brooks pointed out ("The Bursting Point", NY Times, 9/4/05). It is
dramatically weakening Bush, radicalizing millions, and will give a profoundly left-wing impulse to U.S. politics.
There is enormous anger throughout the country about this preventable tragedy and the slow, cavalier response of the
Bush administration. This has been reflected in the firestorm of criticism against Bush from the normally tame
mainstream media, Democrats, and even many Republican politicians.
Already before Katrina hit, Bush was in serious trouble. His flagship policy, Social Security privatization, was
completely stuck in the water with massive public opposition. Bush's approval ratings were falling sharply, and anger
at the war was growing by leaps and bounds.
A Pew Research Center poll found 67% of Americans believed Bush could have done more to speed up relief efforts,
and just 28% believed he did all he could. His approval rating slipped to 40%, down four points since July to the
lowest point Pew has recorded. A CBS poll taken September 6-7 also found confidence in Bush during a crisis had
fallen, and only 48% now view him as a strong leader - the lowest number ever for Bush in the poll. A year ago, 64%
of voters saw Bush as a strong leader (Reuters, 9/8/05).
Bush's political base has been seriously weakened, not least in his southern "stronghold" which has been hardest hit by
these events. Many Southern Republican politicians, feeling the anger of their constituents, have been compelled to
denounce the Bush administration's failure to rapidly respond to the hurricane and are demanding relief. And with gas
prices likely to stay extremely high for the next period, support for Bush will be further undermined.
There is also widespread understanding that Bush cut the funding for levee improvements to pay for the Iraq war, and
that relief efforts were hampered by the fact that many of Louisiana's and Mississippi's National Guard soldiers were
in Iraq. This will dramatically strengthen the antiwar mood, giving it a much broader, working-class character as the
war is increasingly linked to domestic social and economic problems. At the same time, the U.S. faces a growing
catastrophe in Iraq. It is likely the antiwar protests on September 24 will be huge, and could open up a new period of
mass protests against the war and the Bush administration.
This anger is strongest in the African American community. Katrina's searing images of racism have had a profound
effect on the psychology of the black community. "To African-Americans, Hurricane Katrina has become a
generation-defining catastrophe - a disaster with a predominantly black toll, tinged with racism ... 'You'd have to go
back to slavery, or the burning of black towns, to find a comparable event that has affected black people this way,"
said Darnell Hunt, a sociologist and head of the African American Studies department at UCLA." ("Katrina, Aftermath
Galvanize Black America", Associated Press, 9/8/05)
The upcoming Millions More March against racism in Washington, D.C. on October 15 is likely to give vent to this
anger. Despite the confused and conservative nature of the March program, the turnout could very well be huge in one
of the largest political mobilizations of the black community in a decade. This explosive anger, particularly in the
inner cities, is preparing the ground for a new revolt of African Americans against racism and poverty.
Taken together, Bush faces an immense political crisis. The NY Times pointed out, "perhaps not since Richard M.
Nixon faced Vietnam-era tumult abroad and at home has an American president had to meet quite the combination of
foreign war, domestic tribulations, and political division that President Bush now confronts" marked by the "enduring
insurgency in Iraq and the looming battles over the first double vacancy on the Supreme Court [in] 34 years ...'I think
he's really undermined his credibility at this point, and it really saddles him with the kind of problems that Johnson
and Nixon faced,' said Robert Dallek, a presidential historian. 'These crises are such a heavy burden, and they are so
self-inflicted, except for the court vacancies, that if he is not very careful and tries to put across someone who is seen
as an ultraconservative, he is going to touch off a conflagration in the Senate.'" (9/5/05)
Bush's credibility has taken a crippling blow, and along with it public confidence in capitalist institutions has been
seriously undermined.
David Brooks pointed out, "Last week's national humiliation comes at the end of a string of confidence-shaking
institutional failures that have cumulatively changed the nation's psyche. Over the past few years, we have seen
intelligence failures in the inability to prevent Sept. 11 and find WMDs in Iraq ... We have seen the collapse of Enron
and corruption scandals on Wall Street ... As a result, it is beginning to feel a bit like the 1970s, another decade in
which people lost faith in their institutions and lost a sense of confidence about the future. Katrina means that the
political culture, already sour and bloody-minded in many quarters, will shift ... There is going to be some sort of big
bang as people respond to the cumulative blows of bad events and try to fundamentally change the way things are ...
We're not really at a tipping point as much as a bursting point. People are mad as hell, unwilling to take it anymore."
(9/4/05)
Many on the left drew completely one-sided and false conclusions following Bush's election victory in November,
arguing that it signaled a right-wing swing in the U.S. Instead, we argued that U.S. capitalism is on the edge of
historic shocks and convulsions. We explained that, on the basis of events like the disaster in Iraq, economic crises,
and the growing anger of workers and the oppressed, Bush's support would be undermined and that massive upheavals
in U.S. society - most importantly, mass movements of the working class - were posed.
Generally, consciousness lags behind reality. It takes huge events, historic shocks, to shake off previously ingrained
thinking in the minds of millions of people. Katrina is one of those shocks, breaking millions from previous illusions
and laying bare the brutal realities of U.S. society. It has revealed how weak Bush's political position truly is and the
potential for mass struggles in the next period. Profound events of this kind act as a catalyst, crystallizing in mass
consciousness the need for radical change by bringing to the forefront the accumulated grievances that have been
building up below the surface of U.S. society for the past period
Katrina has also severely weakened the propaganda of the American dream and the U.S. being the "greatest country in
the world." One of the main feelings across the country was a feeling of "shame, a deep collective national disbelief
that the world's sole remaining superpower could not - or at least had not - responded faster and more forcefully to a
disaster that had been among its own government's worst-case possibilities for years. 'It really makes us look very
much like Bangladesh or Baghdad,' said David Herbert Donald, the retired Harvard historian" (NY Times, 9/3/05).
Internationally, it has also deeply undermined the prestige of U.S. imperialism.
This catastrophe will lead to enormous questioning, particularly by young people, of the entire order of U.S. society.
Already, one of the most striking features of the current situation is how questions of class and race have now entered
into the mainstream political debate.
The ideology of neo-liberalism has received a tremendous blow. Katrina will strengthen the idea among tens of
millions that it is vital to have publicly-funded infrastructure, social services, and public planning. In the aftermath of
the hurricane, there is a growing demand for a massive relief effort by the government.
But many will not stop there. There will be profound questions raised about the twisted priorities of an unplanned,
anarchic system which pursues foreign wars of plunder yet is incapable of providing a decent or stable life for the
majority. The idea of a system based on human solidarity and the democratic running of society, socialism, will
increasingly gain support.
Join us in building a movement dedicated to sweeping away this rotten system!

September 18, 2005

								
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