Capitalism

From a Google Image Search – GreenBiz

In a capitalist system “a country’s trade and industry are controlled by private owners for profit, rather than by the state.”

“Capitalism is often thought of as an economic system in which private actors own and control property in accord with their interests, and demand and supply freely set prices in markets in a way that can serve the best interests of society. The essential feature of capitalism is the motive to make a profit.”

Capitalism has been around for ages. The stock market began when the Dutch East India Company began selling shares out of Amsterdam. When other countries saw how this increased profits, they adopted the same model in their own countries. Even in nations governed by monarchs there was some private enterprise, small businesses offering the services of artisans, bakers, farmer’s markets, cobblers, tanners, silversmiths, and so on. Although the king or queen took a share, the owner of the business kept most of the profits. 

However, when steam engines and then combustion engines came along, as monarchies began to fail, get overthrown, or become less responsible for governing and more titular in nature, we started to see capitalism on steroids. This was an age of invention and innovation, with machines, improvements on machines, improvements on ways to fuel machines, new designs to produce with machines, and finally assembly lines which followed immediately after Ford’s example. Wheels turned on new cars, on railroad trains, boats got engines, the world practically bustled with industry, at least in Europe, America, Canada, and some of South America. Streets turned gritty with ashy remnants of burning coal and later gas and oil. Even electricity often had to be fueled with fossil fuels, although hydropower was also used and did not foul the air. There was work for everyone and there were no rules.

These days capitalism may be a problem the world faces, rather than the engine of prosperity. Both definitions I found use the term control. Private owners control trade and industry, supply and demand. Both definitions claim that the state (the government) does not have a role in business. Capitalism would be fine, but capitalism with no controls, no rules, no regulations is untenable. Conservatives stridently insist that we must have free markets, we must have an unregulated business scenario if we want booming profits. America’s economic problems are not necessarily with capitalism. It is just a system for doing business. The system doesn’t require any ‘purity’ in order to function, and since it is an idea, it has no values of its own. The values belong to those private owners who say that profits are highest when business is unregulated. It is the way humans interpret capitalism that makes the system problematic. 

If profits are all that matters, then every nation could just be run by corporations, and everyone would buy from the company store, and all the profits would accrue to the owners. Since there would be no central government corporations would probably run their own little kingdoms and perhaps have wars with each other. Capitalism does not, in and of itself, offer any governance, allow for a civilized society, leave room for small businesses. Left to their own devices corporate owners would not concern themselves with anyone’s quality of life, except the owner’s own quality of life.

But capitalism is not our system of government; it is simply the way we do business. Totally unregulated capitalism is incompatible with democracy. We see what happens with too much market freedom. Wealth pools at the top. A system for conducting business may not be greedy, but the people who own the parts of the system can be. They can be cruel and uncaring, and they can begin to feel that they are above government and above workers; above it all. Even people who seem civil may still believe that all the wealth accruing to them is theirs by right. After all, they started the company, or s/he started the company. Owners forget that their business could not have expanded to provide ever greater profits unless they hired people to help them. They did not see the people as helpers; they are workers, lesser beings, to be paid as little as the owner can get away with and still attract the quality of help s/he needs.

Conservatives have come to be the American citizens who insist that business can only operate if government keeps hands off. They act as if the definition of capitalism is absolute and not mutable. They act as if business profits everyone if there are no rules and regulations, if we let supply and demand control the marketplace, if trade is freely determined by owners of corporations, and if it is up to corporate leaders to decide how trade will be conducted. (Do they get together and decide, or is it every business for itself?) Conservatives insist that if governments keep their “mitts off” business, the profits will be so great that they will overflow and trickle down on workers. They never describe how small that trickle will be.

It is a myth that capitalism only functions or functions best when there are no rules. Free markets and unregulated capitalism have not produced market stability or enough trickle down to reach those at the bottom of the culture. We have seen markets experience cycles of boom, recession, and even depression without some oversight. These cycles don’t always exempt the wealthy owners either. Even the rich can lose everything and, in fact, they have a lot farther to fall.

Our economy will not survive the current conservative messaging on corporations and businesses. Just as conservatives seek an originalist interpretation of the Constitution, they seek totally unfettered capitalism. “Fettered” capitalism works just fine. Harness capitalism a bit and it can serve everyone in a society and not just those at the top. If the thirst for profits of those at the top of corporations gets too heavy, then it robs everyone at the bottom. If those on the bottom cannot perform their role in a capitalist system as consumers, then there is no demand for goods. Regardless of the supply side options no one can afford to buy whatever is on offer, and capitalism dies, the economy dies. Greed at the top will kill the economy just as surely as too much regulation. 

Conservatives say that Democrats will ruin the economy. They want to allow the government to exercise control over business by making rules and regulations about things like masking and vaccinations. Even before the pandemic, Conservatives said that Democrats liked to make up all kinds of rules to hamstring owners of businesses. They want to raise taxes on the wealthy. Conservatives say, if we call it “redistribution” and label it as “socialism” people will climb on board with us to fight the Democrats, even if they are low wage workers. This is exactly what has happened.

Too much regulation can also be bad for a capitalist economy, but there is a whole lot of room between no control and too much control. The economy will show us when the balance is right. There will be a more even distribution of money, a prospering middle class, and no poverty. But those at the top will still be wealthy, just a bit less wealthy. These are the signs of a healthy economy. These are signs that taxes and regulations are set at appropriate levels.    

If you look at our historical record on booms, or prosperous times, and recessions and depressions, it tells a tale. Recessions and depressions tended to occur after Republicans were in power. Steady progress tended to occur when Democrats were in power. Capitalism should not conform to an absolute definition, it should conform to reality, to conducting the system in a manner that will achieve balance, and a healthy planet. With all the great minds that have delivered us to the brink of the technological age you would think there would be a plan for a sustainable business model that is not totally out of balance, as well as a sustainable planet. Those of us who are not wealthy could stop enabling wealthy corporations that are hoarding profits. We could support laws that help workers, and we could insist on more balance in pay and in taxes.

Just out today, Sunday, October 3, 2021

https://www.washingtonpost.com/business/interactive/2021/pandora-papers-offshore-finance/

December 19, 2016 – Unfettered Capitalism Wins

It is December 19, 2016, the day America’s electors decide whether to break with tradition to keep a crazy authoritarian leader from running our nation or not. I am sure that no one is brave enough to keep this man out of office. My mind cannot help but move ahead into the future we are about to usher in, although our reasons are good ones because we are between a rock and a hard place. We take a chance on destroying our nation either way. But this is also a referendum on Capitalism and our global environments.

Even as I await the surely inevitable results an image comes alive in my mind of the conference table at the G8 Summit (yes we are back to eight nations because I am certain that DT will reinstate Russia). At one end of the conference table will be Putie and at the other end The Donald, finally face to face and, for the moment, sharing power. Each of these men is determined that fossil fuels and GDP and military might will still determine which nations are most powerful. If we switch away from fossil fuels how will the order of power among nations be determined?

So the G8 has changed its mission statement and has become the Board of Directors of Planet Earth. It plans to make sure that gas and oil continue to be a currency mill pumping money into the economies of the eight member nations. This old energy, fossil fuel energy will be used to bring back an Industrial age that has been rapidly morphing into something else, some je ne sais quoi. We know that industry is being turned over to robots, with less human fodder required to run the world’s engines of manufacturing and commerce, and soon even in the service sectors. Perhaps we will turn away from robotics for decades so that the Board can find a use for all of the world’s extraneous masses.

Because with an exploding world population and less and less work for humans to do what will the leaders do to keep the thumbs of  their power on the people, to keep them as useful consumers, but to never allow them to believe that they can have something for nothing. Life should be a “beach” for the wealthy, but for the poor it should be a struggle. We can’t have people enjoying themselves all over the place on the public dime. And that will not even be acceptable to poor folks. Most of us expect to have to pay our way in life. But we do not expect the obstacles to be so strong that we cannot get over or around them with a reasonable amount of effort.

So given all that, what will this G8 Board of Directors do in this all-Capitalist-all-the-time world if we are still earthbound with no technology to expand into space? I don’t think it will be pretty for anyone except the top 1%. Human life will be cheap. We will be cheap labor and no one will mind if our lives become hamster lives – running endlessly on a wheel to nowhere. Perhaps drugs will become plentiful, but I don’t think these folks will offer the new peasant class any way out of their servitude.

And when I say that life will be cheap that means that our new Board of Directors will not care if we live or die – in fairly large numbers. Disease may wipe out huge sectors of the population. Violence will also be quite common. Why would the Board require order when they do not have to live anywhere the rest of us live? Perhaps building walls will become common – walls to keep us out.

But what will the upper echelons do with their money in such a world. Perhaps they will not go this far just so they still have the world they are used to in which to enjoy their power and success and people to envy them and wish to join them. Perhaps there will be chances to climb out of the muck and revel in life at the top. Nine billion people is a really big audience though. Probably too big. Many of us will have to die to keep the population of the planet within comfortable limits. Perhaps the population will always be set to what it was in 1950.

Will there be any concession to keeping environmental conditions that offer beauty, biological diversity, and fresh air and water? If the Board of Directors is limited to living within the confines of this planet it is safe to say that they will have to find a way to balance their avarice with their survival. It will be interesting to see how they create that equilibrium.

A Capitalist dream may take over the minds and hearts of our new global Board of Directors for a while but even they will soon discover the disadvantages of fouling their own nest. Will they get it in time to save the planet? Maybe not. It does seem as if money makes you stupid.

[The Group of Eight (G8) refers to the group of eight highly industrialized nations—France, Germany, Italy, the United Kingdom, Japan, the United States, Canada, and Russia—that hold an annual meeting to foster consensus on global issues like economic growth and crisis management, global security, energy, and terrorism.]

http://www.cfr.org/international-organizations-and-alliances/group-eight-g8-industrialized-nations/p10647