Why is Capitalism Failing Us?

[Joanne98]

by Doug Page / June 14th, 2008

Our critical human needs are not being met by our capitalist economy that is now pervasive throughout the planet. We humans do not have adequate medical care. A very large percentage of us humans cannot get enough food at a price we can afford, so that millions are dying and millions of others are malnourished. We are spending billions on foreign wars, while billions of people are hungry. It seems obvious that so long as our economic engine is fueled by greed for short term profit, and that the profiteers from this economic engine control our government, we shall never deal with Global Warming or planetary ecological damage. We face the three coinciding crises: Peak Oil, Fragile Economy, and Global Warming. We still have much freedom, but our effective democratic voting power is thwarted. What has gone wrong?

The basic question of political economy has always been: How shall we human beings organize our productive and creative abilities so as to work together to meet our needs?

The current critically important questions are: Is our present day economy meeting our human needs? Are there alternatives? To answer these questions, and even to understand what our economy is, we must analyze its dynamics, the way it really works.

It is critical at the outset that we state our own values. We seek, insofar as is possible, to meet the reasonable needs of all humans. No person should have more than he needs when others are needy. We seek caring, sharing and cooperation. We seek a sustainable civilized free existence for all humans on this planet. Only this sort of a Political Economy will be sustainable, consistent with our values, and consistent with the wisest values of our spiritual traditions. We are radical in the first dictionary definition of that term: “one who seeks roots or root causes.”

In considering the following analysis, please try to suspend conventional wisdom, and your present beliefs and opinions. Like most of us, you may have never known of an analysis like this one or you may have learned to regard it negatively. Therefore, please evaluate the following on the basis of your own personal experience, your personal judgment, and what you personally observe that seems to be happening.

As Doug Page understands them, the following are some of the main dynamics of capitalism:

1. The core dynamic of capitalism is this: A private person with money hires a person without money for the lowest possible wage, in order make as much profit as possible for the person who already has money.

a. It is the private hiring of human beings that fuels the economic engine. Slavery would also work for this purpose temporarily just as well were it not for the problem of where would slaves get the money to buy products from the slave master-employer?

b. Notice the internal contradiction: As Henry Ford observed in the 1920s, employers do not pay employees enough to buy all the products employees create.

c. Capitalism inevitably produces more than employees and others can afford to buy, thus leading to repeated cycles of overproduction, layoffs, unemployment and recession or depression.

http://www.dissidentvoice.org/2008/06/why-is-capitalism-failing-us/

[ChairmanAgnostic]

1. unregulated capitalism always fails, except for those at the very top

a well regulated capitalistic system has safety nets, margins for error, progressive taxes, and provides some planning in the economy.

A decade or so ago, I read about couple of towns which accepted Friedmanism, milton's ideas, when the started building. He said, no Zoning, it is socialist. So, they put in no zoning. He said, no road maintenance, let the users pay. Ditto. On and on, I understand both are ghost towns, totally unlivable.

[MrScorpio]

3. I'd like to read about those cities

More info please

[ChairmanAgnostic]

12. gots to do some digging, but I will do my best

of course, you can find tons of stuff on South America and the horrible results his theories caused there.

[MrScorpio]

2. Capitalism in America exemplifies its dog-eat-dog aspects

At least, in Europe they recognized that it not the best way to run a society

[Boojatta]

4. "No person should have more than he needs when others are needy."

Which of the following are needs?

1. Alcoholic beverages
2. Television broadcasts
3. Democratic Underground

Which of the above should be banned until no person on the planet is needy?

What should be done about the existence of countries (e.g. Burma) that have governments that prevent foreign aid from crossing the border?

[baldguy]

6. And the award for totally misunderstanding a statement goes to Boojatta

[Boojatta]

7. Did you write or edit the article?

If you wish to make claims about what is a correct or incorrect interpretation of an excerpt from the article, then it might be helpful for you to make a gesture of supporting your claims.

[baldguy]

11. Having simple reading comprehension skills doesn't require me to have written or edited it.

Just reading the article does.

It means that if I have a widget and you don't, you should have the first crack at the next one that comes along. I shouldn't be able to hoard them so nobody else can get them. It does NOT mean that I should destroy mine or be denied the use of it until two widgets come along together. This idea is even more imperative with true necessities: food, clothing, shelter, etc.

It's a simple concept, spelled out plainly in the very same paragraph:

It is critical at the outset that we state our own values. We seek, insofar as is possible, to meet the reasonable needs of all humans. No person should have more than he needs when others are needy. We seek caring, sharing and cooperation. We seek a sustainable civilized free existence for all humans on this planet. Only this sort of a Political Economy will be sustainable, consistent with our values, and consistent with the wisest values of our spiritual traditions. We are radical in the first dictionary definition of that term: “one who seeks roots or root causes.”

The author never talks of banning anything anywhere in the article. You either deliberately took the statement out of context & misrepresented it, or you didn't understand it on the first place.

[Boojatta]

15. "The author never talks of banning anything"

So? If resources are being used up to produce alcoholic beverages and alcoholic beverages aren't a need, then isn't that a problem if the resources could instead be used to satisfy some actual needs that aren't being taken care of?

[Boojatta]

16. "It means that if I have a widget and you don't, you should have the first crack..."

Does everyone need at least one widget?

[arendt]

5. Excellent piece. K&R and bookmarked for later reading. n/t

[patrice]

8. It's actually Socialism for big corporations and the Rat Race for the rest of us. We need a new

American Contract.

The old American Contract is: for your cooperation and obedience you MIGHT receive a job that can be taken away from you for reasons having nothing to do with your performance and a paycheck that has a completely arbitrary value controlled by players elsewhere manipulating abstractions that you have no part in defining. Plus, when there is only one choice "Paycheck for Work", that's not a choice at all, especially when that "choice", the paycheck, would not even exist in the first place without Work.

People should think: My body, my labor, my time, my skills and talents are my capital. Every American should demand REAL VALUE in return for their investment of their own REAL capital, not the phony values sketched above. In return for investment of the Real Value of my capital, I should demand Real Value in return: appropriate and complete Education, reasonable National Health Care, sane and financially responsible National Defense, egalitarian Economic Opportunities, Civil/Human Rights, TIME. These are the REAL values we should demand for our capital, not the phony values we've fooled ourselves into taking.

[justinaforjustice]

9. Capitalism"s Only Motive Force is Profit.

Thank you for your post. We need to re-examine the forces that are devastating our country and our world.

Capitalism's profits come from selling goods and services for more than it cost them to produce them, thus the incentive to pay workers as little as possible and purchase needed materials for as little as possible. This makes for exploited workers and shoddy goods, to say nothing of devastated environments.

Capitalist companies need to show short term profits, on a quarterly basis, to keep their stock prices high and thus keep stockholders happy. Many executives get paid partially in stock options, thus their incentive to inflate their profit statements. Enron is a good example of false inflation of profit statements.

There is no incentive to spend money to protect the environment or to provide quality products or services when the only important metric is profit.

We need to re-organize our economic system so fulfilling human and environmental needs are paramount over profits.
The first step is dismantling the mega-corporations which are causing global destitution and environmental destruction. When, for example, huge global conglomerates are determining the price of corn, the small farmers cannot compete with their prices and so are run out of business. The so-called "free market" is free only to the mega-corporations, not to the small companies and farmers who are unable to compete.

The "free trade" agreements make it easier for global companies to move their operations to third world countries with low labor and production costs, thus removing jobs from the advanced countries' workers while freeing the companies from the need to comply with environmental protection laws or to pay benefits to the poor country's' workers. Both groups are exploited.

Where the only incentive is increasing the profits to a relatively small group of individuals, the majority of the world's citizens are left in poverty. We need to create an economic system that serves the majority of people and places human values -- good housing, food, education, medial care and the like -- above profit statements and stock prices.

[ChairmanAgnostic]

13. the problem (or A problem) is that unbridled capitalism suffers from many

problems, not the least of which is the idea that in order to win, someone must lose. The zero sum game is wrong, on many levels. When planning, regulations, and reasonable rules and laws are applied, the whole society increases wealth and improves.

[blindpig]

10. Hmmm, sounds like Marx to me...

:bounce: :bounce: :bounce: :bounce: :bounce: :bounce: :bounce: :bounce: :bounce: :bounce:

:toast:

[patrice]

14. "ARe there alternatives?" ---> A budding alternative, similar to co-housing . . .

There would be individual equity in (specialized) Real estate:
http://www.ncbcapitalimpact.org/default.aspx?id=146

[OneBlueSky]

17. because it's based on an impossible premise, i.e. infinite growth in a finite world . . .

there's no such thing as a stable state economy in capitalism . . . there always has to be more -- more expansion, more growth, more and more profits . . . eventually, the raw materials needed for infinite growth are used up, and the whole system collapses . . . (as an example, look at what capitalism is doing to our oceans, and to the life forms that inhabit them) . . .

capitalism is predicated on infinite growth . . . and infinite growth in a finite world is impossible. . .

[Jade Fox]

18. Add to "c": Inflation and outsourcing.

[Joe Chi Minh]

19. Because it runs counter to Adam Smith's most explicit and emphatic warnings.

That is the simple but utterly seminal answer. Look no further.

[Grinchie]

20. It's the result of an undisciplined Fractional Reserve Monetary System

For a background that will open your eyes,

Search on Google for http://video.google.com/videoplay?docid=-9050474362583451279&q=%22money+as+debt%22&hl=en">Money As Debt 47:07:00

Money as Debt is a distilled essence of the video http://video.google.com/videoplay?docid=-515319560256183936&q=the+money+masters&ei=_xdUSIKlEoGKqAOH9tnvDg">How the International Bankers Gained Control of America 3:35:19 (3 and a half hours)

These two videos are key to understand why our politicians and Corporations are happy to destroy the earth in order to make a profit. The have no other choice.

The writing is on the wall. We are on the edge of hitting the limited resource wall, and the fact is that the transfer of wealth that is occurring is part of the shift to a new era.

The masters fear a well educated, attentive population. On the contrary, the more poorly educated, distracted people in the world, the easier they are to control and manipulate. They are easier to pay off when new technologies are invented. If they refuse to be paid off, there are hundreds of poorly educated miscreant that will kill for a few dollars without a thought of the ramifications of their actions.

People that do work for money, instead of making their money work for them are nothing more than slaves to the money masters.

We are bombarded with the mantra of consumption, yet we are never taught how money works. This is by design, to keep you in debt and forever bound to slavery.

[crikkett]

21. because it fostered a society based on greed and exploitation? n/t

[ladjf]

22. It is "failing" us due to the fact that it has morphed into fascism.

[Forrest Greene]

23. Because Capitalism

...is as transparent a racket as any sidewalk Three-Card Monte game.

[adnelson60087]

24. Unrestrained capitalism is like a cancer...it just spreads and spreads

with no interest in what it leaves in its wake. Look at China to see an example of such a situation. Greed will eventually eat itself, but by then the damage will be massive.