We
have told ourselves a nice story about the economy. As we adopted the
Manchester School and made it into the 20th-century model, the market
became central. We renamed it into the neoliberal model. We forgot that
the economy is far more than just the work sphere, or the business
cycle.
I have written about this in the past because part of this is ideology.
We
ignored the centrality of home life to economic life. Why we have
stopped investing in those things that keep home life going.
We
see it with education, which we continue to shortchange. It was not
always this way. The launch of Sputnik led to a generalized panic. The
United States lost its technological edge. We had to do something! Part
of that something was a massive investment in public education. We
needed to get our children and young adults ready for what these days is
called science, technology, engineering, and mathematics; STEM for
short.
The
Russians launched Yury Gagarin soon after Sputnik; we knew we were
falling behind. Not only was the National Aeronautics and Space
Administration told, even ordered, to catch up. We started to do
something else. Basic and secondary education was prioritized, and budgets grew.
But
it was in the area of education that the impact of the Sputnik Crisis
was to be most felt. In 1958, the U.S. Congress passed the National
Defense Education Act in an effort to ensure that the highly trained
individuals would be available to help America compete with the Soviet
Union in scientific and technical fields.” In order to achieve this
goal, the act made provisions for loans and grants to institutions of
higher learning who wanted to improve their mathematics, science and
foreign language programs. Of course this made perfect sense; there was
no point setting up research and development bodies if there would be no
trained personnel to run them.
Consequently,
the National Science Foundation (NSF) was revamped and its budget
drastically increased. In 1959, Congress appropriated 134 million
dollars for the Foundation, almost a hundred million dollars more than
the previous year. By 1968, the Foundation was receiving about half a
billion dollars a year in federal funds; in fiscal 2012, the NSF had a
budget of some 7 billion dollars and provides the funds for
approximately 20 percent of all federally supported basic research
conducted in colleges and universities throughout America. In some
fields, such as mathematics and computer science, the NSF is the major
provider of federal support. At all events, in the decade between 1955
and 1965, federal expenditure on research and development rose from 2.7
billion dollars to more than 15 billion dollars, as old bodies, such as
the NSF, and new ones, such as NASA, competed to fund research of one
kind or another.
But
it was not just the government that was putting in new resources into
education. The system itself was enthusiastic in its determination to
take a giant leap forward, for practitioners of education in America
were by no means sanguine at the thought of being left behind by their
Soviet counterparts. James B Conant, a former President of Harvard
University carried out a detailed two year study of American high
schools with the support of the Carnegie Foundation in order to ensure
that all gifted children were being properly motivated to pursue higher
education; and in 1960 Harvard embarked on its biggest fund-raising up
till then for the purpose of reforming its whole approach to education.
The campaign raised 82.5 million dollars.
Less
than a decade later subsidies went to public colleges and universities.
This is the origin of well-funded systems like the University of
California, and the California State system. These subsidies allowed
students to attend colleges, and not go into massive debts. In fact,
most students who graduated from college did so without debt or very
little debt.
Compare
this to the present. We are in the midst of a planetary emergency. We
need people trained in the STEM fields. This is not because the Russians
launched a satellite into space, or beat us into manned. No, the planet
is in the midst of a crisis. And we may face extinction.
However,
we are cutting educational budgets at all levels, from pre-K to
graduate schools. States and the federal government have a problem
finding the money. Teachers are facing pay cuts and benefit cuts across
the board. The crisis is worse in some states than others, but it’s a
crisis.
As
a society, we decided that the market should take care of this. Why
many charter schools (who can choose their student body) are financed
with public funds but are run as private organizations. These schools
also lack in the area of certified teachers.
It
gets worst. The current administration is taking this effort to epic
levels. Why? Science could impinge on the market and its instincts. The
Environmental Protection Agency is preparing a new measure that will
exclude science from its rulemaking. According to the New York Times:
The
measure would make it more difficult to enact new clean air and water
rules because many studies detailing the links between pollution and
disease rely on personal health information gathered under
confidentiality agreements. And, unlike a version of the proposal that
surfaced in early 2018, this one could apply retroactively to public
health regulations already in place.
In
the final analysis, it is coming from our faith in the market, no
matter what. It is also a retreat from the role of government, which is
also part of the economy. Ultimately it is a product of corporate
capture.
It
is a rejection of the science that allowed us to clean this country’s
waterways. It is part of a pattern, which also doubts the existence of
the climate emergency. It is a complete surrender to the market.
So
what happens when we ignore the core economy? For starters, we see
increased insecurity and the costs of certain core services have gone
up.
The
transformation of the American economy into a market-centric system
where education was commoditized happened in the last forty years. It
creates not just distrust, but also insecurity. It is one of the reasons
behind the precariat.
Then
we have other issues that are part of this, the efforts to reduce the
already paltry safety net is not just an attack on good government. It
is also a direct affront to the core economy. If the elderly, for
example, have no means to take care of themselves, it will have a direct
effect on the rest of society. Just as we have some of the most
expensive pre-K in the world, we have a safety net that is dissolving in the name of the market. This takes away from the efficiency of workers in the private sector.
The inequality
in pre-k also keeps poor parents at home, or children are placed with
relatives. While children of well to do parents go to schools that could
cost as much as college. This deepens inequality and handicaps most.
This is problematic because those children show up to school not ready
to learn. They already are attending substandard schools. This is a cost
we all pay. It is also an early indicator of the school to prison
pipeline.
We also see this with health care.
We have the most expensive, least efficient system in the world. People
stay at a job to keep their insurance, as good or bad as it may be.
People fear to go to the hospital, because there will be a bill to pay,
and perhaps lose all they have worked for in their lives. This makes
society sicker and less able to function. Some in the market charging as
much as they can get away with, and lobbying politicians to prevent
them from imposing measures that would slow down, or reverse trends.
They include things like a maximum price for drugs, or being able to
negotiate for lower costs on all services.
We
have monetized and put in the hands of the market higher education,
healthcare, basic research. We forgot that our success in the 1950s and
60s came from a heavy investment in these areas by the government. No,
the private sector did not build the internet, which you are using right
now to read this piece. That was the Department of Defense. Granted,
ARPANET came from a need to survive a first, even second nuclear strike.
But it is the origin of the internet and the information economy.
Nor
did the GPS system we all use came from the private sector. In fact, it
is still a military system that we civilians use. It was the government
that invested in the basic science and technology needed to develop
this. Many of the medicines we use today started with basic research at
the National Institutes of Health. It was not the private sector that
did that, so when we are told by the industry that it costs a lot of
money to bring new medicines and procedures to market, they are correct,
but a lot of it came from the taxpayer.
Over the last few decades, our investment in basic research has gone down. These are the trends:
For
the first time in the post–World War II era, the federal government no
longer funds a majority of the basic research carried out in the United
States. Data from ongoing surveys by the National Science Foundation
(NSF) show that federal agencies provided only 44% of the $86 billion
spent on basic research in 2015. The federal share, which topped 70%
throughout the 1960s and ’70s, stood at 61% as recently as 2004 before
falling below 50% in 2013.
The
sharp drop in recent years is the result of two contrasting trends — a
flattening of federal spending on basic research over the past decade
and a significant rise in corporate funding of fundamental science since
2012. The first is a familiar story to most academic scientists, who
face stiffening competition for federal grants.
This
rise is coming from the pharmaceutical industry. It is not just because
they can get great profits from new drugs. But they can impose
intellectual property rights on these, avoiding the need to share. This
makes medicines that much more expensive for much longer.
When
combined with a lack of price controls in the United States this makes
it a very good business. And we are seeing it with old drugs, such as
insulin. Small changes in the drug allow them to patent the drug anew.
This is one reason insulin continues to rise in cost. Also, things like
the Epipen, originally developed by DoD scientists to treat troops
during a chemical attack, have gone into the stratosphere when it comes
to price.
When
Americans say that this is capitalism gone astray, they have a point.
This is a system where the regulatory bodies were captured. It is also a
system where profit is put ahead of human life affecting all spheres.
In particular the core, or household economy.
Basic
services are not there. Labor rights are under attack. Ultimately,
because of this, the planet is under attack. However, some people are
getting insanely rich. This will have negative effects on the overall
economy, as well as political stability.
Yes,
when Senator Elizabeth Warren or Bernie Sanders raised the issue of a
wealth tax, this is partially what they are addressing. We need to
rebalance our economy in ways that will redistribute wealth. But that
will also strengthen the role of government and re-regulate industries
towards the common good and away from pure profit-making. We also need
deep investment in green economies, meaning that subsidies to mature
industries (the fossil fuel industry) will need to go to the green
industries we need to survive as a species.
This
is precisely why those who benefited greatly from the centrality of the
market above all else are not happy. If you made a few billion under
the current system, higher taxation may cut your wealth growth curve. It
will not stop under either model but will slow it down.
Think
about this. How many cars, planes and homes can you own? How much
material stuff can you acquire? Psychologists have found that people who
are extremely wealthy have distorted views.
Several
studies have shown that wealth may be at odds with empathy and
compassion. Research published in the journal Psychological Science
found that people of lower economic status were better at reading
others’ facial expressions — an important marker of empathy — than
wealthier people.
A
lot of what we see is a baseline orientation for the lower class to be
more empathetic and the upper class to be less [so],” study co-author
Michael Kraus told Time. Lower-class environments are much different
from upper-class environments. Lower-class individuals have to respond
chronically to a number of vulnerabilities and social threats. You
really need to depend on others so they will tell you if a social threat
or opportunity is coming, and that makes you more perceptive of
emotions.”
They
may also develop an addiction to accumulating more money, which is a
problem. One reason why they may feel threatened by a wealth tax. It
will reduce the speed at which they get that money. Why they will fight
against this. Maybe even, run for office themselves.
We
need to recalibrate and re-regulate the economy to make it work better.
And by regulation I mean change how it works. Not just who is
regulated. But we also need to expand government investment in public
services, including education and healthcare. Chiefly, we must move away
from the market as the only way to run the economy.
