If you were taught the same way I was, Capitalism was always explained with the fable of the lemonade stand. The false fable was so popular, they even had an educational video game designed around the idea called “Lemonade Stand.” You can find an online version here.
But the lemonade stand is a lie. If you want Capitalism to work the way it does in the fairy tale, it needs a well and equally regulated economy. It needs built in protections for small businesses and workers.
"Don't we already have built in pro-"
Hahahahaha, of course not.
What our economy needs is -Gasp!- Socialism!
More below the fold.
The Lie of the Lemonade stand is best illustrated by one bit of advertising from 1947. You should read it out loud to yourself in your best Captain America voice, for full effect.
Captain of Industry
Butch wants a bicycle! Lots of lawn and lemonade and baby-sitting lie between Butch and that bike, but we’re betting on the boy. He has energy, vision, and our national habit of working hard for what he wants. He’s American business – in miniature.
There are many names for Butch’s philosophy. You can call it Free Enterprise, Opportunity, Democracy, or Capitalism, if you want.
But whatever the name, America owes it much. For our most valuable natural resource lies in the ambition and initiative of Americans like Butch.
As great publications have grown from the dreams of young men with old hand-presses – the electric industry had small beginnings, too. A few men with vision strung the first short lines. People with faith risked their savings. Better and better service, at lower and lower cost, created more and more jobs – and carried the benefits of electric living to more and more people.
Free enterprise—and hard work—will bring Butch and his bike together. They are what built America and the American way of life. No nation on earth has found a satisfactory substitute for that combination.
-General Electric Company
What a delightful fairytale. Like most fairytales, we all wish it were true. When we read this, I'm sure one small part of each of us wants to believe it. Sadly, it it's just a story. America has almost always been about the rich getting richer.
When the unthinkable happens, when one of the peasants actually manages to pull himself up by the bootstraps, fight through all the trials, and make something truly incredible of himself, we make movies about it. We tell stories about the man (and I do mean 'man,' though it's not for lack of effort or intelligence.) The rare exception to the rule has become the promised norm in the land of opportunity. Unless we fundamentally alter the way that our economic system works, the promise of a better life, the American dream, will be nothing but a lie.
So here's how Lemonade Stands actually work in modern “Capitalist” America. If you're trying to set up a lemonade stand in modern America, you're going to need a few things. Cups, Lemons, Sugar, Water and Ice.
You'll find very quickly that the big box store next to you can get all these things far cheaper than you can because they buy in bulk, so they're able to sell lemonade at a fraction of the cost. Your other neighbor is a small operation that uses a made-in-china chemical slurry (1 Part Artifical Lemon Flavor, 1 Part Rice Starch, 1 Part Nerve Toxin™ Brand Artificial Sweetener, 1 Part Lemming, 1 part Asbestos) and is able to sell lemonade for 15 cents a cup at a 200% profit. Meanwhile, if you drop below 30 cents a cup, you'll go into the red, because climate change caused a freeze that killed half of the lemon crop last week and lemons are going at about a dollar a piece. So you drop your quality by switching to “'Actual' Lemon Juice™” bought at the grocery store, which is also made in China and contains 10% Juice Like Product. You head back to your lemonade stand where you are promptly shut down by the health inspector, not for being unsafe, but for not paying the $150 license fee that the big box store lobbied the county government to create.
Yes, those are two links to two stories about health inspectors shutting down childrens' lemonade stands for not paying the $150 Temprary Restauraunt License Fee. “The Public's health comes first,” said one. I don't see how the public is protected by paying fees. Maybe if you inspected her stand and discovered that her ingredient list included goat urine, you'd have a case for shutting her down. I'm not saying don't check her out and make sure she's being sanitary, I'm saying that you shouldn't ask a kid making lemonade for 50 Cents a cup to pay license fees.
That's American Mercantilism. Favored companies do whatever they want and write their own rules, and the rest of us can go to hell.
How do we fix it?
Well, we need a market that is free from interference from international companies that don't have the same food safety requirements we do. Protectionism. The Chinese can either produce, monitor, and inspect their own food and food-like products to our satisfaction, or go to hell. Because in this case, the public's health actually does come first. The EU Currently bans US beef because it doesn't meet EU standards. Any of it. So there won't be an international uproar if we decide to take this route. China will complain, but when aren't they whining about something?
Second, we make sure that big box stores don't have any unfair, monopolistic advantages over smaller stores. The best way to do this is to ask small companies, even the bad ones using the now-banned chemical, to pay almost no taxes, while taxing larger companies appropriately. That means taxing them to pay for the infrastructure they use, from roads (for the trucks carrying their bulk lemons picked by migrant workers in squalid conditions), to schools (who educated their lemonade mixer operation specialists), to government administration (like the folks who are making sure they're keeping their stores clean).
That's a lot more than we tax them now.
We also have to make sure that every American is paid a living wage by these big companies, and we could institute grants to make sure that small businesses could afford the labor cost. As the price of commodities wouldn't be affected too much by a living wage, the smaller businesses would eventually be able to increase their prices to keep up with wages. Then, we'd pin the minimum wage to the average of wages in the US, so that as rich folks pay themselves more, they're required to pay more for labor.
This way we protect the American people, and ensure a fair marketplace. It was one of the rights that FDR wanted added to the constitution in the second bill of rights.
We need to protect both workers, and small businesses.
This, the tea party and Joe the Liar would point out, is SOCIALISM! (Oh no!)
But Ollie, I hear you asking, Don't we already protect small businesses? Don't they pay almost no taxes?
Haha, no. No we don't. We require S-Corps to pay little or no taxes, while actual small businesses pay an arm and a leg to local and state authorities in taxes for licensing fees, equipment taxes, labor taxes, restaurant taxes, building repair and upkeep taxes. Meanwhile, the big box store strategically located itself outside of the municipal limits so that their competition has to pay all of the city and county taxes, but the big box store can write them off for charitable donations to local soccer teams/free advertising.
And this mess exists without even delving into corruption and bribes, which are distressingly common on the local level. Check out the Miami herald. It makes you wonder what your local paper isn't investigating.
S-Corps, or what republicans call small businesses, are companies that have fewer than 100 owners. They include Fortune 500 companies, like Koch Industries.
I'm not kidding. The republicans consider Koch Industries a small business. It was at this point in my research that I had what I will politely describe as a rage moment, and wrote a diary about S-Corps, which can be found here.
This all proves one thing: Unless we stick up for the little guys, for small business, for labor, we'll all be crushed by the 800 pound gorillas.
We need to have our governments mandate protection from predatory industries, and close the loopholes that are killing our economy, and creating deficits by limiting revenue.
Either that, or we can all veg out, and watch Hulu. DiGiorno pizza with tomato-like sauce and Wyngz reconstituted chicken product, anyone?