Social Democracy: A Threat to Black Self-Determination (Part I)

By m

May 29, 2017

Good Intentions

In 1904, American writer Upton Sinclair took up work in assorted meatpacking plants around Chicago in order to conduct research for a novel he was working on. An outspoken socialist, he sought to expose the extremely unfavorable lives and working conditions of immigrants and indeed the working class in American cities.

The novel, titled The Jungle, was published in 1906 to critical acclaim - and as intended, great public outrage. However, where that outrage was directed was not so intended, nor were its consequences.

Appalling working conditions overlooked, Sinclair's vivid depictions of the utter lack of sanitation in the meatpacking process captured the attention of readers and became the focal point of a nationwide outcry regarding the quality of the meat they were consuming. Reaching the highest levels of government, President Theodore Roosevelt sent investigators to Chicago to investigate facilities. Though the most damning allegations raised in The Jungle were deemed unfounded by the federal inspection, an assortment of new regulations on the food industry were passed in subsequent years.

These measures were criticized by Sinclair himself, as they ultimately benefited the large meatpacking businesses he sought to challenge. The burden of inspection for quality, originally an operating cost of the businesses themselves, were shouldered by taxpayers instead, while consumer faith in the meatpacking industry was artificially restored and consolidated by the federal certification of their compliance.

Not the first landmark legislation addressing the question of contaminated meat, the meatpacking industry was subject to additional layers of complexity on an ever-growing mountain of expensive regulations. Previous legislation was usually lobbied for by the large businesses themselves in order to secure their access to European markets. Smaller businesses - competitors to the larger businesses - were driven out of business over time.

The practices used by federal inspectors themselves not only occasionally contributed to spreading contamination, but failed to address less visible forms of contamination such as that of microbiology. However, this was not a concern to the businesses now, the trust of their consumers ensured by their compliance with subpar regulatory standards rather than fundamentally improving their processes and striving to conform to the specific quality demands of their consumers. Outbreaks stemming from contamination of this nature persist to this day, and their faithful consumers fall ill and even die as a result. Bon appétit.

A Rigged System

The developments within this sector were not, and are not an isolated incident. If corporate lobbies routinely buy conservative politicians to gain favorable tax breaks, they also routinely buy progressive politicians in order to impose anticompetitive regulations upon sectors.

If an emerging business, sector, or economic trend poses a threat to an established interest, that interest will leverage its connections to push regulations that undermine the growth potential of that threat, politically framing the regulation as beneficial to the American people – or as is commonplace in this day and age, the environment.

Business regulations and the tax code are inherently riddled with loopholes. While small businesses must sacrifice a significant amount on lawyers to merely comply with that code, large businesses with abundant resources can afford to hire the most competent legal teams in order to not only navigate the code, but to identify the aforementioned loopholes. With these loopholes, large businesses may legally minimize taxes paid and the degree to which they comply with regulations.

The only way for many smaller businesses to survive in the most regulated sectors and states is to seek capital investment, or to merge with more established entities. In capital investment, business owners cede a significant share of ownership and thus control to investors or investment firms in return for funding. Meanwhile, a large number of mergers and acquisitions in a regulated market effectively reduce the number of competing entities within a sector, eventually leading to monopolies.

With organic competition effectively barred from the playing field, the big businesses that emerge and thrive within highly regulated sectors have free rein to gouge prices for their potentially subpar services and products, adversely affecting customers and consumers that depend on them.

This has proven especially disastrous in the healthcare sector, where compliance is extraordinarily complicated, competition is artificially limited, and prices are high, all to the detriment of those who depend on it the most. To “reduce” the costs associated with these services, insurance companies pool funds from many customers over time, negotiating down prices and partially covering the cost of services. However, to manage and/or reduce risk, they often have complex terms that disqualify existing customers and outright discriminate against would-be customers. A high-profile example of this is denying coverage for those with pre-existing conditions. As society debates ad nauseaum about the cost of health insurance, scrutiny of the fundamental problems making insurance necessary falls by the wayside – and that's precisely how the largest businesses in the industry want things to be.

As businesses from assorted sectors pay more for the goods and services of businesses in other sectors, the overall cost of living – otherwise inclined to decline with time as businesses compete to offer goods and services at lower prices to attract customers – rises within a given economy, as does what constitutes a livable wage with respect to workers.

With respect to economic freedom, the metaphorical deck of the representative democracy in the United States is stacked against the common man, having shot himself in the foot as a result of voting away his livelihood in the hopes of state-provided comfort and peace of mind. For the black man and woman, the situation is much worse.

State of the Nation

In a given year, Black Americans constitute around a tenth of the United States' economic output. However, our cumulative net worth falls far short of this, and is a fraction of what we earn each year. That is to say, we are not saving our incomes, we are not investing our savings, and we have by far the greatest intragroup economic inequality, with the normal distribution of our incomes heavily left-skewed.

Among the assortment of factors that this may be attributed to is our deficiency in cultural capital – knowledge and skills that when applied, facilitate pragmatic ends. Between this and a comparable deficiency in social capital, or the relationships and networks that facilitate pragmatic ends, employment prospects are comparatively limited for those within black communities, and with the absence of gainful employment comes social malaise.

Compounding this situation is the fact that many businesses refuse to open shop within these communities, and when they do, are less inclined to hire locals. Consequently, the money earned by these businesses from the patronage of locals leave the communities, rather than circulating and facilitating reinvestment and development of individuals, institutions, and infrastructure. To remedy this situation, communities and their denizens have often come to depend on funding and services from the government, which is neither particularly responsive nor has their well-being in mind – only their vote, which their party and representatives take for granted by virtue of being the lesser of two evils. After all, who else will cater to the needs of the community?

Black-owned businesses, then, are imperative as a means of bringing revenue and gainful employment to black communities. Furthermore, by hiring, training and educating, and coordinating with other locals, communities develop their own cultural and social capital. Ownership of capital – in the form of business or land – and indeed serving the community has historically been the means by which black Americans have liberated themselves from the oppression of circumstance, de facto and de jure, and helped black Americans to establish their stake in the greater economy. It is no surprise that during times of economic adversity, whether during the state-imposed segregation of yesteryear or the recession in the past decade, black businesses emerge to address and even rectify what wider society cannot or will not.

This has not come without its own set of challenges. If the cost of conforming to government regulations is a burden on established businesses, it is a nightmare for entrepreneurs and small business owners from economically disadvantaged backgrounds and areas. Regulations also restrict what kind of activities individuals and businesses may partake in. A noteworthy example of this is the widespread restriction on urban farming, which would be an invaluable means of rectifying the food desert epidemic that plagues low-income areas. Maintenance of crumbling but vital infrastructure also usually requires expensive government permits. As the number of regulations on businesses has skyrocketed over the decades, the well-being of black-owned businesses and the communities they have served has plummeted, succumbing to financial ruin or being acquired by larger businesses.

The only chance black communities have at any semblance of self-sufficiency within a zeitgeist that neglects them at best and subjugates them at worst is through ownership of the services they require, but liberation from the burden of government regulation is a necessary prerequisite for this to be optimally realized.

m is a small business owner and avid shitposter.