Capitalism does not work in practice

Oct 16th, 2009 | By | Category: Uncategorized

by Mike Courson

Humans ruin everything. Today at work, I chatted with a not-uneducated coworker about some of the major theories of society. She could not believe some prominent media figure suggest capitalism does not work.

She is a conservative, and that is fine. Though I do not agree with most of her views, one can generally find a base principle or other similar characteristic in opposing viewpoints. Though she may not have agreed (she may have), she at least remained civil when I suggested the capitalism is just one idea that does not work because the human race is involved.

Capitalism is a good idea. Let the people run the show, and the free market will regulate itself. If a company sells worthless goods, people will shop elsewhere. If a store has overpriced items, consumers will go to another store. These concepts and others will lead to reliable and cheap products. These ideas work in a fair society.

Unfortunately, humans are anything but fair. Let’s say a company does sell worthless goods. Maybe they are toxic. Maybe they fall apart. What if, due to volume of sales and cheap manufacturing, this company has more money than the competition to promote its products. What if it has the power to run smaller businesses out of town?

The argument may be that it’s not possible for a company like this to thrive. It would not be if things were fair, but again, they are not. Take a woman shopping for clothes. The nice clothes, made by workers who are paid and treated properly, and whose fabrics and threads are of high quality, naturally cost a lot of money. This woman, unfortunately, works for a company that does not pay her well, even though she works very hard. On top of that, she has been sick lately and has to pay high medical bills (that capitalism did not do a very good job of regulating). Though she is a worker, and though she wants the nicer clothes, her situation is not dictated by what she wants but rather what she can afford. Through really no choice of her own, she perpetuates the cycle of abused employees and cheap products. Take this woman times hundreds of millions of people on the planet and capitalism clearly begins to benefit a certain group.

That is just one example of how a less-than-ideal business can thrive in a free market. The market is not based on what is best for consumers, but what is best for business. Therein lies the flaw. Businesses, run by humans, can corrupt the system by controlling the variables that dictate behavior. If the above woman’s employer paid her what she truly earned, she could afford more expensive clothes, and the store exploiting cheap labor and products would have to up its ante to compete. Instead, the cheap store usually wins out with sheer volume merely because it can run the other shops out of business.

True capitalism assumes there are standards by which businesses work. Perhaps in the beginning, this was the case. In 2009, that is no longer the case. Mass media makes possible countless ways of advertising. Again, the company with the most money, which is often not the best company for the people, has the most ability to promote itself.

Fortunately, our system is not true capitalism. We have regulation. Though we have become a fine print society, at least companies are forced to tell the truth in some twisted form. Unfortunately, we do not have enough regulation. This is why companies can continue to exploit workers and consumers.

That is the other part of capitalism: the consumer. Why feel sorry for the consumer? It is up to him/her to control the market. The people working for companies that do not pay well must deserve the substandard pay. To the contrary, those earning high salaries, through school, hard work, or other ways, earn their pay. It is the common psychological principle that good traits are credited internally (I work hard, therefore I make a lot of money), and bad traits are external (He does not make a lot of money, therefore he must not work hard).

When this mindset is added to the other capitalistic equations, you end up with a society that does not care for one another. Instead of improving the plights of others, maybe with higher pay, more nutritious foods, etc., the lesser groups are viewed as inferior. The become tools to further individual growth. This explains how so few in a society can grow so wealthy while the masses get progressively poorer.

When all is said and done, a capitalistic society is supposed to create wealth for some. If fairness were incorporated completely, we would not see the levels of wealth and poverty we see today. The salaries of company owners would be limited because of fair pay to employees who run the company. But, somehow, we do not see that capitalism is not a fair idea, and we have allowed many dishonest companies and people to take advantage of others, resulting in the growing disparity between the rich and the poor.

Humans ruin capitalism for two reasons: greed and ignorance. One group uses whatever tools it can to gain more. The other group does not realize the power of itself and begins to listen to the viewpoints that ultimately benefit the class in power. How else could a worker with two jobs vote for candidates that vote against a wage increase?

What is the answer? Time has all but proven that western ideas do not work. Communism is another great idea. Individuals work for a collective good. Like other systems, this always results in a certain power structure. Power corrupts, and soon you have a class of people taking advantage of another class.

Religion is but another good idea gone wrong at the hands of humans. Instead of being used to increase the quality of life, certain humans use it as justification to hurt others. Religion, money, and nationality are the three main causes of war in history.

It seems there is no answer, but there is: regulation. Call it socialism, call it whatever you want. With an independent body to govern greed and force honesty, a society can create a natural series of checks and balances. If the body is failing, it can be replaced through election. Sound familiar? Vaguely, but it is not the American system, which is controlled not by everyday people, but by special interest.

Again, call it socialism, but there is another name for a truly independent government that looks out for all and not just a few: fair.

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  1. The unfettered pursuit of profit we call capitalism is also destroying the environment, and has upset the equilibrium of the planet to a point where we have passed the watershed mark for sustainability. http://www.footprintnetwork.org/en/index.php/GFN/page/earth_overshoot_day/

    Communism is not the answer, as Marx’s theories on proletarian assignment of labor to maximize production in a communal faction. The largest simplification we can make is that the state system and economic globalization is intertwining the societies of the world to push for even greater degrees of factory farming, private sector growth and industrialization, which rarely lends itself towards efforts of “sustainability,” a pithy attempt to minimize the exploitation of the earth. Read Daniel Quinn.

    We are facing a future of exponential damage to our ecology, and we will be lucky if there is anything left for the next generation. Like the inhabitants of Easter Island, who immigrated to the island, used up the timber and deforested the island, were unable to build boats to escape, and resorted to cannibalism before extinction, humanity has emerged from prehistory to record a long and gradual appointment with disaster.