The Chart provides powerful evidence corroborating the fact that Capitalism has failed to deliver real and absolute increases in family income after 1973. Why? There are several possible reasons for this:

1. The Arab oil embargo -- the first significant blow to colonial exploitation of resources. The embargo was followed by increases in the price of oil and inflation.
2. The defeat of overt colonial exploitation -- marked by the fall of Saigon in 1975.
3. Misdirected investments. Substantial evidence corroborates overinvestments in commercial real estate at the expense of industrialization and technology.
4. The increase in the civilian labor force participation of women. Ironically, this led to the economic exploitation of women in the marketplace.
5. The increased resistance, mostly in the West, against the despoiling of nature by industry. Considerable evidence corroborates a substantial increase in the vulnerability of the planet to the hazards of global industrial pollution, etc.

Of the five reasons, none appears to be more potent than the Arab oil embargo. Why? Because the growth of industrial economies is predicated upon the availability of cheap energy. A linear regression indicates that world oil production explains 83.95% of the variation in personal disposable income per capita (indexes used). Without cheap energy, industrial economies falter. Without cheap oil, supergrowth in family income stops.

But what about misdirected investments? The Economic Report of the President (1997) claimed as follows: "From an accounting perspective, almost the entire slowdown [which began around 1973] is attributable to a decrease in multifactor productivity growth, that is, the efficiency with which capital and labor are used."⁵ This is only partially true. As will be shown in Book II, the real issue is not only efficiency, but, much more importantly, motives regarding the allotment of benefits.

And what about technology and innovation? IBM introduced the much touted PC in 1981. Did PCs increase real family income? The Chart shows clearly that the real average family income after tax did not increase after the introduction of the PC (it oscillated). Why? Because high-tech firms focus on what consumers could or would be made to buy -- and not necessarily on what is needed to secure and grow employment and income for others. Capitalists are driven by money: the primal goal is to increase profits and market share (dominion) -- not to create jobs for, or to increase the wealth of workers. Current Capitalist arrangements make it almost impossible for people to benefit from science and technology as increase in net wealth (the Myth of Progress is discussed in Book III).

A careful examination of family income, in both the U.S. and Canada, reveals that income has been oscillating since 1973 -- as if the economy were a PREDATOR-PREY process. The oscillations are not as evident prior to 1973 because the predation was masked by supergrowth fueled by colonial exploitation. When colonial exploitation became more costly and less secure, Capitalists shifted gears. Instead of limiting exploitation to "colonial outposts," transnationals would exploit the whole world,-- the GLOBAL MARKETPLACE.

Sources:
The indexes are derived from data from the following publications:
¹ R. Famighetti (ed.), The World Almanac and Book of Facts 1996, Funk & Wagnalls Corporation, 1995, at 505-510 (U.S. History), and 573-576 (World History); and J.R. Colombo (ed.), The 1996 Canadian Global Almanac, Macmillan Canada, 1996, at 295-306 (World History).
² C. Flavin, Oil Production Up, by C. Flavin, in Vital Signs 1995, at 46-47, L.R. Brown et al., Worldwatch Institute, 1995 (World Oil Production, 1960-1994; cited sources: API, Basic Petroleum Data Book (Washington DC, 1993), and Worldwatch estimates, based on BP and Oil & Gas Journal).
³ Statistics Canada, Canadian Economic Observer, Historical Statistical Supplement 1994/1995, No. 11-210 (personal disposable income, population, and CPI deflator).
⁴ Statistics Canada, Income After Tax, Distributions by Size in Canada 1993, June 1995, No. 13-210 (average family income after tax, in constant 1993 dollars).
⁵ See Economic Report of the President, transmitted to the Congress February 1997, at 28-37 (Growth), especially 30 (Box 1-1 -- Explaining the Productivity Slowdown).

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