JRRZZ blog

It’s everywhere. Capitalism is the driving engine behind our economy and has been for centuries. It has given us prosperity, wealth and freedom. The very foundation of our modern society is capitalism. Without capitalism we will fall back and become a soviet society.

Is all of that true? This is what many of us believe, because it is what we are being told.

To clarify what capitalism means to us, we should first define capitalism. Find out what it actually means. Wikipedia defines capitalism as:

Capitalism refers to an economic and social system in which the means of production are predominantly private owned and operated, and in which investments, distribution, income, production and pricing of goods and services are determined through the operation of a market economy. It is usually considered to involve the right of individuals and groups of individuals acting as “legal persons” or corporations to trade capital goods, labor, land and money.

A dictionary defines it as:

A competitive social system, emerging in the seventeenth century in Europe, based on commodiftcation and the drive of the owners of the means of production to maximize the profits of their companies.

And another one:

An economic system in which capital is mostly owned by private individuals and corporations. Contrasts with communism.

So, there are several definitions, all of them true. If we combine them we can conclude this:

Capitalism is an economical and social system wherein people, whether acting alone or in a group, privately own and operate the economical means to gain profit. These means include goods, labor, land and money. In a free market economy these people compete one another with the sole purpose of maximizing profit.

When we look closely to how capitalism works in our society the belief that it’s a good system quickly changes to skepticism. A free market can only operate when there are enough competitors. Imagine a market with three competitors, all selling apples. People buy apples from the salesman with the lowest prices. Eventually there will be a situation where one of them takes the upper hand. What happens next is the beginning of the end of the free market. The winner of the competition will use his profits to enlarge his market influence by buying more apples, which will lower his prices. Simply because a larger market share means a larger profit. The losers in the market will simply go bankrupt by the loss of customers or they get swallowed by the winner, who only cares for the customers of the bankrupt salesman. This system works quite well because now there’s room for competition which will balance out the system again. But what if the competition doesn’t arrive in time? The start capital you’ll need as an apples salesman to even make a chance against this guy is too big for you to finance. You could get a loan at the bank, but that’s a big risk. A risk not everybody is willing to take. This story can be applied to higher level markets. The apples salesman starts competing other apples salesmen in other districts. Eventually there’s only one apples salesman left in the entire city. The free market has vanished. Luckily it doesn’t go this far all of the time. Usually the free market keeps enough room for people to start their own competitive business.

I hope you can see the danger of complete capitalism. Capitalism is the logical product of a free market society, but also it’s biggest threat. A free market has the tendency to implode. A good example of an imploded market is the desktop operating system market. Microsoft dominates this market and abuses it’s monopoly to maintain it’s dominating position.

This is where the government should act and ensure the market is kept free. A free market results in a healthy economy, resulting in an increase of prosperity. This is also where things get creepy. In several capitalist nations, with the United States as the prime example, businesses have political power. They have the power to steer the political agenda to their needs in stead of the people’s. And this is exactly what happened in the United States in the last fifty years or so. Every single war, without exception, has been a war for profit and self interest. The corporations abuse their political influence to keep the war machine rolling. President Truman warned for this to happen, and he was right. The United States have become a terrorist nation without a real democracy. Politicians have been reduced to puppets, the people are being kept in the dark and every single value the nation stood for has been reduced to mere propaganda. One can only hope the newly elected president will restore the United States to it’s former state.

Please watch the BBC documentary Why we Fight to get the long version of what I’m trying to tell you here.

I think it should become illegal for politicians to have any ties to businesses. That would save both democracy and the free market. And behold, this has been written by a socialist.

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