Four Arguments for the Elimination of Television (17 page)

Chait went on: “Assets and profits are, of course, important measures of concentration in national economic life, but there are other very interesting indices. In 1963, for example, there were 112 industries in which 4 companies accounted for more than 50 percent of production. In 29 of these 112 industries, the top 4 companies accounted for more than 75 percent of production. By 1963, 30 percent of the volume of production of consumer goods came from industries in which the top 4 firms accounted for over 50 percent of production.”

Chait quoted economics professor Corwin Edwards to ex-plain why the larger corporations
inevitably
get larger during periods of economic growth, absorbing or driving out smaller ones: “In encounters with small enterprises it [the corporate conglomerate] can buy scarce materials and attractive sites, inventions and facilities; pre-empt the services of the most expensive technicians and executives; and acquire reserves of materials for the future. It can absorb losses that would consume the entire capital of a smaller rival. . . . Moment by moment the big company can outbid, out-spend in advertising, technology or talent, or out-lose the smaller ones; and from the series of such momentary advantages it derives an advantage in attaining its larger aggregate results.

“The sociologists may very well take exception to this trend,” Chait said, “but as pragmatists, we must recognize that this in fact is the direction in which the economic organization of our country is moving.” Finally, he quoted Dr. Edwin G. Nourse, who believes, “There are no discernible limits at which such concentrations of economic power, once fully underway, would automatically cease.”

A moving example of the way the process works is offered in
The American Farm
by Maisie and Richard Conrat. The authors point out that only two hundred years ago, 95 percent of the population of this country lived on farm land; now less than 5 percent do. The family farm is a creature of the past, and so is the moderately large farm. The economics of technological scale nourish only the hugest agribusinesses and their machines. The critical period in this change came immediately after World War II: “With astonishing rapidity, the 60 horsepower general purpose tractor was replaced by a new 140 horsepower model, then by a towering 235 horsepower machine with a $40,000 price tag. The single-row corn harvester gave place to machines that could handle four rows simultaneously, then eight rows. The cost of such new equipment made it economically imperative for farmers to take on more acreage. Between 1950 and 1975, the acreage of the average American farm doubled and the value of farm machinery trebled . . . those who could not keep up with the frenzied pace were shoved aside and forced to drop out. In the new agriculture there was no room for the man who simply wished to live on the land and work in the soil and sell enough to pay his bills. The dairyman with twenty cows was notified by his milk company that they would not be making pick-ups at his place anymore. From now on the company trucks were stopping only at the farms of the large operators. Small scale vegetable producers, orchardists, and general farmers found themselves underpriced and cut out of the market by supermarket chains and agribusiness corporations.”

What was true for farmers was true for all business as the rapid-growth phenomenon gave automatic advantage to the larger, better-financed, more technologically advanced elements of the system.

Smaller competitors were driven from competition by the mere scale of the expenditure required at every level, from the cost of automation to the salaries of executives to the availability of bank loans. Banks, recognizing very early that large companies are better loan risks than small ones, actively aided the advancing juggernaut. Smaller companies were wise to face the fact that it was usually better to sell out before things got worse.

Nowhere were the advantages of size more evident than in advertising.
Only
the largest corporations in the world have access to network television time because it can cost $ 120,000 per minute while reaching 30 million people. Television is the media counterpart to the eight-row corn harvester.

The Effect on Individuals

It was not only abstract entities like corporations that benefited disproportionately during the commodity boom. So did the people who owned the corporations.

Dr. Lester C. Thurow, professor of economics and management at MIT and former member of the Council of Economic Advisors, published some enlightening figures in the
Public Interest Economics Newsletter
of December 1975.

By 1962, says Thurow, during the final spurt of the greatest economic growth of any industrial nation in history: “The top 18 percent of all families owned 76.2 percent of all privately held wealth in the U.S., while the bottom 25 percent, roughly 50 million people, had no assets at all. . . . recent estimates suggest no significant change . . .”

Thurow continues: “The top 5 percent of the families own more wealth than the bottom 81 percent. The top .008 percent hold as many assets as the bottom half of the population.”

Thurow goes on to say that “wealth and power are even more concentrated than are indicated in these data, because of the inter-relationships among the wealthiest individuals and the large corporations they control.”

In other words, this .008 percent can, through their stock ownership and interlocking directorships, effectively dominate the few corporations that in turn dominate the economy.

I believe Thurow is suggesting conspiracy, or at least a startling degree of collaboration among these few. Perhaps his academic standing prevents him from putting it that way. Since I don’t have any academic standing, I am willing to draw the obvious conclusions.

Thurow goes on to talk about income: “The income gap between the bottom 5 percent [of the families] and the top 5 percent is 45 to 1, and the income gap between the bottom 1 percent and top 1 percent is 525 to 1. The top 1 percent received nearly three times as much income annually as the bottom 20 percent of the American population. The fact that only the government transfer payments [social security, welfare, food stamps] have kept the position of the lowest income groups from declining, indicates that the distribution of earnings by the private sector is becoming more and more unequal. . . . The lowest fifth of the population receives only 1.7 percent of the earnings as distributed by the market [private industry],
down from the already miserable 2.6 percent in 1943.
The top fifth receives through the market 28 times as much in wages and salaries as the lowest fifth.”

Thurow’s point is that if the government, that is, the taxpayer, didn’t pick up the slack which industrial growth has created, the widening gap between the rich and poor would be perfectly obvious. In the false belief that industrial growth will provide benefits to the poor and unemployed, we provide tax breaks to aid industrial growth. Meanwhile, with our own taxes, we feed the growing number of hungry and poor, who are blamed for the rising taxes. We pay for what is being taken away from us. At each turn of the cycle, the situation becomes more desperate.

What these figures reveal is that America is every bit as dominated and directed by a tiny minority of wealthy people as the Mexico and Nicaragua of my high school teacher’s fantasy. Looking at the past thirty years through our new reality of unemployment lines, bankrupted small businesses, and the immense profits of a handful of corporate giants, we can see that we are now much further away from an egalitarian society than we were a generation ago. The American Dream was a dream.

Flaws in the Fantasy

Since the dream was packaged and sold by advertising people, it ought to be no surprise that the flaws in it were never mentioned. It is inherent in the advertising process to tell only those parts of the story that encourage the desired belief.

Two major flaws were covered over. The first was that commodity consumption and economic growth, even if beneficial, could not go on forever. The second was that economic flow in a private enterprise economy, during periods of rapid growth, is inexorably distorted to favor the rich.

Unlimited economic growth is a planetary impossibility. It could only have been conceived by minds out of touch with natural limits. It is dependent upon a suicidal overuse of resources and an impossible rate of commodity consumption. It depends upon all elements of the resource-production-consumption cycle operating at an accelerated rate that cannot be maintained in the long run.

At the initial signs of raw materials shortages, of which oil and copper were only the first, production began to decline, jobs were lost, buying power decreased, while, contrary to the textbook laws of supply and demand, prices went up. The handful of corporations that totally dominate supply were able to raise prices, getting more money from the ever-shrinking number of people who could afford to pay.

In addition, many of our client governments abroad, which had been paving our way to
their
resources, began to fall to revolutionary movements. This was particularly true in African, Asian, and Middle Eastern nations, bringing into view the bottom of the bottomless pit of goodies.

Meanwhile the limits of commodity consumption were appearing. People cannot buy two new cars every year forever. Nor can road builders keep building roads once the landscape is mostly covered. People cannot replace their living-room furnishings, microwave ovens or television sets annually, no matter how much advertising they see. Eventually, purchase rates slow down. There is an end to the consumption process. Markets
can
be overexploited.

While many Americans do not realize that this is what has happened, the largest corporations have known it for some time. Many of them, seeing a burned-out market, have been dismantling their American operations and reestablishing themselves as transnational entities. The United States, with its ravaged cities and exploited landscapes, faces the prospect of becoming a sort of gigantic boomtown, exploited and abandoned.

With operations geared to nations that are just emerging as markets, the multinational corporations are taking television into places in Asia, Africa and South America where there are often no telephones or paved roads. Satellite television systems have been installed in many countries ahead of modern transportation or sanitation systems. TV provides pretraining for the commodity life that is coming up fast. People in villages where electricity has just arrived are watching ads filled with ecstatically happy people using artificial milk, Coca-Cola and electric shavers.

Even if economic growth could go on forever, it does not benefit all people. It benefits only the owners of businesses, not the working people, and it surely has nothing to offer the jobless. It doesn’t take a Marxist economist to explain why.

Such distinguished corporate experts as Louis Kelso have been predicting our present malaise for decades. In his brilliant
How to Turn Eighty Million Workers into Capitalists on Borrowed Money,
Kelso argues that as capitalist enterprise grows, the rich must get richer and the poor poorer because owners of businesses have more kinds of incomes. They have wage income, which is many times higher than that of the average wage earner, and they also have dividend income. Then, they have another advantage: In periods of economic growth, they enjoy large profits that may be used for further capital investment, which will provide additional profits at a later time.

Workers, whether blue- or white-collar, have only one income source: wages. There may be occasional wage hikes, but the rate of wage increases can never match the threefold opportunities of the business owners. The workers, therefore, fall further behind as time passes.

During the postwar period, while most of us were singing the praises of our expanding economy and buying toasters, washing machines, cars and gas-powered lawn mowers, all of which were designed to break down after a certain period, some people were able to use their double or triple incomes to build new plants and buy up small companies, labor-saving technology and raw materials such as Chilean mines, oil rights or Brazilian forests.

This is ignored by trickle-down theorists, who keep saying that the owners of the businesses use their extra wealth in reinvestments which expand job markets, suggesting that it is actually desirable that some people have more money than others. But investment in labor-saving technology
reduces
jobs. Expansion of overseas facilities reduces
American
jobs. The purchase of small companies means the merging or elimination of some production facilities, further reducing jobs.

Aside from this, much of the surplus wealth is not spent on capital investment. It is plowed into inflation hedges such as gems, art and land, driving the prices of those items further out of the reach of wage earners.

As often as not, the disparity in incomes increases while the total number of jobs is reduced. In an economic climate where a few large businesses control supply and prices, as the number of jobs declines any employee who becomes too uppity or too demanding can easily be ousted. Where unions are strong, whole businesses can be packed up and moved, for example, to South Korea or Hong Kong, where workers tolerate fourteen-hour days at forty cents an hour. American wage earners are left with their single incomes, their shrinking power, and a widening gap between them and the people who control their lives.

The Depression Never Ended

As we slowly begin to understand that the American Dream was not merely a dream but a hoax, and that far from benefiting economic democracy, it produced a terrifying concentration of wealth and power, we can also grasp the quality of our new dependency. It is similar to the old company-store syndrome. These few huge enterprises control the jobs, and as job competition increases, they also control the salaries.

As Tennessee Ernie Ford sang: We work for the company, we beg to keep our jobs, we don’t make trouble, and we buy at the company store.

In retrospect we can see what should have been obvious all along. The Great Depression of the 1930s never ended. It went underground, covered over by a war which created jobs and expanded industrial capacity, and then, when the war was over, by an advertising fantasy, a pipe dream sold to us with a purpose.