Why Capitalism Sucks: Part 3 – Definitions: Capitalism


The goal of capitalism is to pay the cheapest wages, use the cheapest materials and processes and sell the results for the highest possible price, to result in the most profit or capital, which is then supposed to be reinvested to make more of the same.

We know what the results of largely unregulated capitalism are, since we saw them in the early part of the 20th century: rampant 14-hour workdays, child labor, crappy dangerous working conditions, no breaks or relief, monopolies and nowhere else to go.

The minute one company gets bigger than another, it gets more purchasing and negotiating power, giving it more leverage over the market. The subsequent goal is to start buying up all the competition to eliminate the competition, monopolizing the suppliers and customers so you can name your own prices, which actually ends up overriding the market instead of being subject to it. As we know this leads to monopolies, as was shown in the early part of the 20th century.

Capitalism is supposed to maintain a balance through competition. But for an individual or corporation and their goals, if capitalism "works," eventually one person will own everything, price everyone else out, and pay the lowest wages possible to maximize the profits for themselves because nobody has anywhere else to go. We’re perilously close to that point now, as only a low percent of the population owns and controls everything.

Capitalism can easily become a race to the bottom since as soon as one company pays cheaper wages or increases profits by cheating or shortcuts such as toxic dumping, moving their accounts or jobs overseas, then other companies basically have to do the same in order to compete. Only we the people can collectively stop them by passing socialist and communist regulations such as anti-trust laws and oversight that reign in that system of “competition.”  And capitalism itself simply does not care about you if you're old or crippled and you can’t produce capital, whereas “morally” those people are equal to anyone else.

The only modifications currently sustaining capitalism as a system are the elements of socialism and communism that we've incorporated. That’s why Karl Marx wrote that capitalism shouldn’t be watered down, because if we mix in socialism and communism, as we have, people will actually think capitalism still works!!! But alone it doesn’t.

The Big Three

  • Capitalism is based on money, not just money but extra money (capital). We are subject to the forces (laws) of supply and demand, which decide the value of human beings based on how common (and how much in demand) their skills are.
  • Socialism is based on society, the interaction of the people as a whole. We are subject to each other.
  • Communism is based on the community. We are subject to each other.

Which system(s) are better? Isn't it obvious?

The combination of the three (Capitalism, Socialism and Communism) that we have now actually works pretty well!

Where is the society where we are subject to our individual selves only?
It doesn’t exist. However that is the ideal of Anarchy or Libertarianism, depending on what side of the spectrum a person is from, but they meet around the back of the ideological circle as the same thing. Those systems only work if we care about and respect each other more, and put our own rules and limitations on our behavior, because there is no one else doing it for us. Otherwise the “stronger” (more economic power or earning potential) will just subjugate the weak (less economic power or earning potential).

Most systems become dysfunctional without some altruism.

From a Christian perspective, since capitalism by the definition of the word puts the most worth (Old English weorthscipe =  worth + ship) on Capital, instead of valuing God first (or due to the separation of church and state, doesn’t value what God would value first, which is people), it is similar to Mammon, contrary to God, and therefore idolatry. You can’t love God and Mammon (Matt 6:24, Luke 16:13). You can't love God and capitalism as long is the goal is money and earthly goods and it doesn’t value people equally like God does.

Description of “Mammon” From Wikipedia:
“Etymologically, the word is assumed to derive from Late Latin ‘mammon’, from Greek ‘μαμμωνάς’, Syriac ‘mámóna’ (riches), and was an Aramaic loan word in Hebrew meaning wealth or possessions, although it may also have meant ‘that in which one trusts’.

The Greek word for “Mammon”, μαμμωνάς, occurs in the Sermon on the Mount (during the discourse on ostentation) and in the parable of the Unjust Steward (Luke 16:9-13). The Authorized Version keeps the Syriac word. John Wycliffe uses “richessis”.

The Christians began to use the name of Mammon as a pejorative, a term that was used to describe gluttony and unjust worldly gain in Biblical literature. It was personified as a false god in the New Testament.{Mt.6.24; Lk.16.13} The term is often used to refer to excessive materialism or greed as a negative influence….

…In the Bible, Mammon is personified in Luke 16:13, and Matthew 6:24, the latter verse repeating Luke 16:13. In the Greek, Luke 16:9 and Luke 16:11 also personify Mammon.”


Public vs. Private

Anytime anything is public, we all have an equal say in what happens (supposedly), and we are sharing. Once something is privatized, nobody has a say at all except the owner(s). People can “speak” with their wallets or pocketbooks, but that’s back to favoring whoever has the most money, giving them more free speech than others. Anytime anything is left to the “free market” (such as school vouchers, unless regulated, more socialism) it will always benefit the richer few over the poorer many, even though the many work just as hard, if not harder.

It’s been said: "The government can’t give to anybody anything that the government doesn’t first take from somebody else. But capitalism can’t give to anybody anything that capitalism didn’t take from someone first either! They take our work and give us our pay. Or they take investors' money and pay it back later with interest. Those situations are voluntary, if there are other jobs or wages available, but we (supposedly) have a vote in taxes too.

Also, there is absolutely nothing that the private sector can do, that the government can’t do also (“we the people” do together). The government creates jobs. We decide we want a road built and we (the government) hire people to do it. Jobs created! The difference is when the government does it, we ALL have a say in where the road is built!  Yes because of that it may take longer. The “government” also hires private contractors to do work, but they have to do it the way we want.

Job creators? Don’t make me laugh!
“During the 1980's and 1990's, the United States underwent the largest "wealth transfer' in our history; the assets of the top 1% of our country rose 17% and the assets of the bottom 40% dropped 80%.  In the words of the prophet Amos, the corporate and public policies of our nation have created a situation in which the wealthy "tread upon the poor" and "sell the needy for a pair of sandals." [Priceless: On Knowing the Price of Everything and the Value of Nothing", by Frank Ackerman and Lisa Heinzerling (The New Press, 2004)].

If giving rich people more money creates jobs, where are all the freakin' jobs!!?  (I wrote this around 2009)

Workers create jobs by creating value which is then sold to make profits, which pays their wages.


“Free Market” is an Oxymoron

There’s not really any such thing as a free market or economy. By definition the market is the opposite of free, since it is completely “trapped” by the LAWS of supply and demand: charge too much and nobody buys, charge too little and go bust too. Don’t people who start companies have the right to decide how much to pay their employees? The problem is they really don’t have much of a choice - pay too much you won’t be able to compete with other businesses, pay too little you’ll get crappy employees and go out of business. The market decides the value of the workers and leaves us little leeway. Although, the owner of Costco seems to pay his empoyees well and it works!

Before owners hire workers, they don’t have any labor at all (besides themselves). Once they hire folks, then they can run the business, make profits and pay back their investors – it is the workers who earned the money that pays their own wages! Why don’t THEY get to decide how much they get?

The whole economy is at least micro-managed on an hourly basis by the Federal Reserve as it monitors data and sets interest rates.  Or they just print money to make up for it. Aren’t people horrified that all our tax money is handled by a few private (and unelected) bankers that don’t really answer to us at all? And all the interest on our debt goes to the bank! Since capitalism values human beings based on supply and demand, that by itself is a principle that rules us and keeps us from being free! Free to set our OWN VALUE!!!

Quota-ble Labor

We can’t call our market “free” if the flow of labor is not, as it is part of the supply and demand principles.Labor should balance itself out as money and goods should. We put immigration quotas in place in the 1920s and created an artificially high wage structure inside our country, that became increasingly out of balance with the outside. That seemed OK when we were or could remain somewhat isolated, but as the world shrinks and everything becomes global it is impossible. This resulted in the export of jobs as companies, in order to compete, found cheap labor elsewhere, because that is their job under capitalism.

Remember back when so many things were “made in Japan”? Eventually with all that influx of wage money they caught up with us, and for cheap labor we had to go to China, Vietnam, India and elsewhere. Pretty soon they will catch up and there will be nowhere to go for cheaper labor! There is no way to stop the outflux of jobs by penalties and border taxes, because any penalties on companies drive up their prices just as keeping jobs here would have. Tariffs end up increasing the costs of imported materials that we use to make products, driving up our prices as well. Other methods such as targeted tax breaks and incentives, are socialism.

This is a more or less random end to the definition of capitalism, as the discussion continues with...

Up next: Part 4 - Systems, Identity & Motivation