A Citizen’s Guide to the American Economy

This year the gross national product of the United States will exceed one trillion dollars, while the economy will fail to meet a great many urgent human needs. This contrast between the statistics of growth and the fact of economic deprivation in America has become more and more evident to the public during the past decade—especially in such dramatic cases as that of the medical care industry, which has received vastly higher payments from both the government and patients, while the quality of medical care itself remains unchanged or has become worse. Indeed, the quality of life is deteriorating in so many ways that the traditional statistical measurements of the “standard of living” according to personal income, housing, ownership of cars and appliances, etc., have come to sound increasingly phony.

Nevertheless the methods used to understand the economic system have remained rigid ones. The current analyses of and arguments about “national income levels,” “inflation,” and “government spending” do little to trace the precise ways in which the operations of the economy affect the life of the consumer. Nor do such analyses make political judgments or assign responsibilities so as to effectively change the consumer’s situation. We have all heard arguments about the need to change national priorities in allocating public funds for defense, health, education, welfare, pollution control, etc. But such proposals have so far failed to take account of the ways in which portions of reallocated public funds may be siphoned off or misused before any are used for the purposes originally intended.

Meanwhile, the impact on our lives of the largest economic force of all, the corporate economy, has been badly neglected. Most formal inquiries into a more just and efficient use of national wealth have failed to measure how the citizen’s dollars are being wasted and depreciated in the market place and his taxes converted into corporate property and income. Instead these studies focus mainly on “aggregate consumer spending” without asking specifically what consumers receive in return.

What are needed now are analyses of the corporate economy that will do what economists for the most part have failed to do: show how corporations, by their control of both the market and government, have been able to divert scarce resources to uses that have little human benefit or are positively harmful. Such studies will have to take account of facts that economists now tend to ignore because they find them untidy or because they cannot fit them into prevailing economic theory. But as they are carried out, they will show the folly of pouring more dollars into the sieve of an irresponsible corporate system.

To encourage more inquiry into the institutionalized abuses of unchecked corporate power, I would like to outline some of the major categories in which the abuses fall and to give a few of the many possible examples of how they work. I call these categories “sub-economies.” In each case, the consumer’s dollars are inexcusably wasted or his taxes misused. To some extent these…

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