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Race, Poverty, and Capital

Updated on November 3, 2013

Social Security, not Socialism Security

Sometimes it is hard to distinguish economics from politics, but in this case, there was no time for  subtleties.  People needed help and the government did not let them down.
Sometimes it is hard to distinguish economics from politics, but in this case, there was no time for subtleties. People needed help and the government did not let them down. | Source

Americans stick with capitalism, even when it does not appear to be working.

It is safe to say that Americans do not like Communism. Neither the government nor its citizenry will ever make an accommodation for it. That is, unless they are somehow tricked. That day will likely never arrive. But the flirtation with Socialism, beginning in the Great Depression, has only led to more and more socialistic practices. Like increasing taxes, there is just no getting rid of them. Social security is a prime example. Among all the socialistic mechanisms in existence, it is held separate, distinct, and nearly sacred. In reality, it might only have been a temporary adjustment to compensate for a slew of down-cycles. During the 1930s, the vast majority could not manage to either save or create a safety net for old age -- or find a job, for that matter. Many spent year after year standing in soup lines and riding the rails, occasionally finding employment. These were bad times indeed. But theoretically, had things been otherwise, the aged could have made private arrangements with employers, religious organizations, gray power, family, or, in rare cases, a shrewd investment house. Greater discounts for seniors is another idea. The fact that social security is a tax burden and not necessarily the remedy it once was never gets much press. But this is far from what I wanted to write about, which consists basically of random thoughts stimulated by Reservation Capitalism, Economic Development in Indian Country, by Robert J. Miller.

Miller is a member of the Eastern Shawnee Tribe. His book is thoroughly researched, informative, and moves impressively from one subject to another. It is not a large book, but it covers a substantial amount of ground. Anyone who wishes to contemplate capitalism in a wider and deeper sense than usual would benefit from this study. It begins in the minor key, as could be expected, lamenting the cupidity and rapine that forced Native Americans into nooks and crannies, almost literally, considering the harsh boundaries that defined their reservations. But within a couple a chapters, the author shows how injustices and failures have been turned around. It did not happen overnight. And contrary to popular wisdom, the establishment of casinos is merely a single factor among others.

The Allottment Act

Allottments for farming led to the sale of "surplus" Indian land.
Allottments for farming led to the sale of "surplus" Indian land. | Source

making amends

First, Native Americans were killed. Then, with Allottment, at approximately 160 acres per farmer, there was more land than could be equally distributed to a Native America whose population had been decimated. Therefore, the government sold land out from under them. This is only a single example of actions America has to face up to. The past is past, true enough. And the future does in fact look brighter. Care should be taken to sustain this vision.

FDR signs the Social Security Act

Reservation Capitalism to the Rescue

I probably have no right to even comment on Native American economic development. I am merely an outside observer looking in. Nevertheless, I find it interesting as well as uplifting to learn how a distressed people have managed to grapple against the odds and make real progress. The American Dream, according to an old hippie song, "includes Indians, too." The systematic dismantling of Native American life styles cannot be denied. But Native American resiliency also cannot be denied. Much of what was achieved happened in partnership with the federal government. A great deal of Native American land is legally owned, that is, held in trust, by the government. I do not have the expertise to completely understand this arrangement, but to my knowledge, a tax bailout was not the decisive factor. It may have been that the government had to step in since some corporations, in the past, did not pay Indian workers a fair wage or adequately compensate them for commodities such as metals.

Government's intrusion into the private sector is an exception to the rule, not a precedent. The argument against big government is not unrelated to America's rejection of Communism or its Socialist cousins. When Marxists write about the State, they imply big government or government in a big way. To date, however, the Communist State has been unable to fulfill its promise. The claim that it, unlike any other state, is beholden to those who, in a capitalist framework, would be consistently marginalized, disenfranchised, locked out, or simply ignored remains unproven.

The Chicago Mercantile Exchange

Day to day, our strong economy is always in good hands.  Right?
Day to day, our strong economy is always in good hands. Right? | Source

Capitalism has many faces -- now more than ever.

The collapse of the USSR brought with it an enormous outpouring of wrath. It came from citizens on the other side of the Iron Curtain. At first, the end of the Cold War seemed to ensure a global capitalism that would, in turn, ensure universal freedom. It would last forever, paying out reliable, eternal peace dividends. Unfortunately, what transpired was far more complex. Red China learned to master capitalistic enterprise. It badly beat out the competition in the manufacturing sector. It also acquired the skill of investing in those dubious markets that have to do with debt instruments. The renminbe, Chinese currency, has been a long-term source of pain and agony for the US. The US keeps pleading with China to devalue it and the Chinese steadfastly refuse. But that is also another matter.

There are countries, too, in the global capitalistic community that instead of promoting freedom, enchain their citizenry. Their lives are at best secondary to certain prized commodities such as oil, so highly valued (like blood diamonds, possibly) that the people have no voice whatsoever. The government in tandem with requisite businesses dictate and the people obey. At present, there is no way out. The world is addicted, not just to refined oil, but enriched uranium, too.

Toward a capitalism with heart, soul, and a more reasonable mind.

The major point is, capitalism changes as do its practitioners. This may not work for Europe, which had already made substantial strides toward Socialism in the 19th century. But Americans need not be concerned. Unless, of course, Communism returns to Russia, in which case Europe will have no recourse but acceptance and appeasement, having exhausted its will and strength in WWII. In addition, Socialism creates an environment vulnerable to Communist takeover. But a peaceful European continent is a great blessing, not to be scorned, however it came about. Its manifold countries will continue to experiment with all forms of socialism. America, however, should not follow suit. Its own foray into Socialism, beginning in the 1930s, has only led to a sluggish welfare state. To be sure, it has alleviated some bleak situations. But it relies on taxes that are already too high. Pound-of-flesh government is not what America is about.

Enter the Native American to show what can be done with honest labor, ingenuity, and a concerted effort. Many tribes were once completely bankrupt. Some of these same tribes now have operating budgets in the hundreds of millions. They did this in a variety of ways. Some reservations, such as the Hoopa in California, were too remote to operate casinos. So the Hoopa built logging roads and sold asphalt, gravel, and cement. The Umatilla busily restored fish runs in Oregon. Tribes own and operate filling stations and mini-markets. Gaming, controversial to the puritanical, is still a mainstay. It is profitable, and on reservations with high unemployment, has drastically reduced jobless percentages well over fifty percent to virtually zero. Bingo parlors might seem laughable until it is disclosed that they can bring in hundreds of thousands of dollars annually. The whole point is not to list the amount and kinds of businesses the 200+ Indian Nations are involved in, but simply to voice an appreciation for such diversity. It is truly stunning.

But it could never have happened in an atmosphere characterized by racial divides and unbending bias. Still today, there are many businesses that will not conduct business with very qualified, hard-working, and talented individuals. This is not just a problem having to do with Native America. Some businesses, moreover, are controlled, and not necessarily by organized crime. So-called free investment markets are overwhelmingly thought to be manipulated, and it is hard to argue with this sad assessment. Gone is the invisible hand of Adam Smith. Capitalism must address these issues and move forward. But the temptation to grow the government with Socialistic mechanisms at all costs must be resisted.

A lengthy but relevant U-Tube on Native America and the Nixon administration.


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