Super-capitalism meltdown

19th Century economics worked pretty (at least for the West) up until the late 20th century.  Companies for the most part, stayed-at-home in Europe and North America.  Where they could count on: all categories of skilled labour and management, research facilities/Universities, infrastructure, business-friendly governments, stable banking, a reliable supply chain of energy, raw materials and parts, an enormous market close by and complimentary industries.  But above all, a stable government that would not nationalize or confiscate their assets and would intervene in foreign countries who did.

 When they made a profit, they re-invested it, grew, hired more people and created a relatively secure society and life-style for themselves and anyone willing to learn and work.  (In fact this is still the model Germany uses today.)

 Then something changed.  The demise of the Soviet Union and thus the Cold War, the transformation of China into a capitalist state (albeit state administered - who can refuse to let their currency float), and Globalization, freed the corporations from the need to locate where they had been given the legal right and all the advantages to flourish.

 Anti-trust laws were enacted beginning in the late 1800’s to prevent monopolies and quasi-monopolies from stifling true competition.  But these are no longer enforced, the excuse being, ‘mergers are needed to compete on a global scale’.  The result is, we are ruled by an oligarchy of corporations who face limited competition.  Money is power.       

 Now in the 21st century the mission of a foreign subsidiary is to extract as much money from whatever country it operates in, and pay the minimum of tax.  By creative cost-accounting, trading assets and liabilities back and forth between parent company and subsidiaries, they are able to reduce or eliminate taxes in any country and show the profits appearing either in a tax-haven, or in the U.S.A.; where they can use them to lobby for even more advantages and write-off the cost at the same time.

 The objective of top executives now: is not to grow a company steadily, but to extract as much personal money as quickly as possible before moving on to their next executive job at another corporation.  If there is a downturn, they cut staff, show briefly a greater profit and take home a huge executive bonus.  If there is an upturn they actively promote the stock value, with embellished reports and in both cases: before the perennial dirt hits the fan – they sell off all the stock they received as compensation.  And take home a huge profit.  What happens to the company and the employees is of no concern.

Although generalizations, these are some (not all) of the mechanisms by which more and more wealth is being concentrated in fewer and fewer hands, and the middle class and thus the general economy is contracting.