Capitalism is a system which effectively allows rich people to legally rob wealth away from
poor people.
The wealthiest 62 people in the world have the same amount of wealth as the bottom 50%
of the population of the planet (that is, 3.5 billion people).
That is obscene!
How can we allow such a high level of inequality?
People who defend this system are either rich themselves, or ignorant of the facts.
How Does Capitalism Work?
Imagine that somebody owns a factory that manufactures products which are then sold
for a profit.
In order for those products to be made, staff have to be employed.
Just say you get a job producing televisions for $20 an hour.
Now we all know, at least in the back of our minds, that if the company is paying you $20
an hour, then they must be earning more than that.
Of course they are!
If you use profit as a guide, some companies might be getting upward of $150 or $200 an
hour for every hour of work you put in.
But they only pay you $20!
In recent times, the $20 an hour scenario is not even true any more.
Most companies have realised to make more profits, they need to find cheaper workers.
They do this by ‘offshoring’, that is, moving their factories overseas where labour
costs are low.
This has resulted in many western countries losing most of their manufacturing industry.
The manufacturing industry in Australia in the 1960s made up about 25% of the country’s
gross domestic product.
Now it is less than 10%.
This chart shows the fall in Australian manufacturing profits in recent years.
The problem with capitalism is if other companies offshore their production, then you must offshore
your production too.
If you don’t, you’ll probably be undercut and lose market share.
It’s a vicious circle that ultimately leads to companies racing to the bottom, that is,
who can find the cheapest labour.
Externalities
Externalities, as the name suggests, are external costs or benefits that affect a third party
who did not choose to be affected.
One common example is pollution.
If you go to any big city in China, you’ll soon be breathing in the fresh scent of capitalism.
Air pollution is rife, not to mention ground and water pollution.
Externalities are generally not paid for.
Big companies that pump out millions of litres of poison into the air are often doing so
without any cost to them.
Factories in China often pump liquid waste into waterways simply by paying off the local
politician – a small price to pay for the amount of profits they earn.
But of course, pollution isn’t free.
Maybe the companies aren’t paying for it, but society as a whole certainly is.
Rates of cancer and lung infections have greatly increased in China in recent years.
My wife’s family know of many of their friends and classmates who are dying of various types
of cancer.
But nobody seems to want to stand up and say anything is wrong, or more likely, anybody
who does stand up is quickly quashed.
The rise of the Chinese economy is seen as more important than any individual’s health.
These externalities don’t just affect developing countries like China.
Even in my home country, the heavily rules-regulated Australia, coal miners have been coming out
with black lung, a potentially fatal disease with no known cure.
Children in the small mining city of Mount Isa have been found to have elevated levels
of lead in their little bodies – just another price to pay to keep capitalism going.
Another negative externality is overfishing.
This is an example of a shared common resource that is abused by many parties until all parties
are adversely affected.
Overfishing might temporarily give a company increased profits, but ultimately will lead
to a collapse of the industry.
This is known as the Tragedy of the commons.
Other examples include human overpopulation, deforestation, and antibiotic resistance.
Excuses
Many people, especially rich people, will fight for capitalism tooth and nail.
Here are some of the commonly used excuses.
I earned my money!
This argument suggests that rich people worked hard for their money and therefore shows that
capitalism works.
If they can become millionaires, then anybody can.
But this couldn’t be further from the truth.
A farmer in Africa probably works as hard as any Wall Street stock broker, but barely
has enough money to support his family.
He will probably never have the opportunity to leave the farm, let alone start a successful
IT company!
In recent years, many rich people could be classified as rentiers.
That is, they earn a lot of their money just by owning property, factories, and companies.
Rentiers do not actually contribute anything to society.
They literally sit back and reap the profits.
It doesn’t require any work except by having lots of money and choosing where to invest.
Some company owners may have never even stepped inside their factories.
They probably don’t even care what happens there as long as they keep getting an income.
To say that these people are somehow “earning” their money is a blatant lie.
They are abusing the people who do the actual work and robbing the profits created by their
employees.
Just look at any CEO salary in Australia or the US – multi-million dollar salaries that
are hundreds of times larger than the average wage.
Exploitation at its best.
Poor people are lazy!
A common myth is that poor people are poor because they don’t know how to work hard.
It’s entirely rubbish and constantly regurgitated by rich people so they can defend their wealth.
Inequality breeds resentment.
If poor people see rich people driving around in expensive cars and eating expensive foods,
they will eventually become angry and overthrow the people who exploit them.
It’s not good for society despite the feelings of the wealthy.
Efficiency.
It’s often said that capitalism is extremely efficient.
That is, if something is not of any value to anyone, it simply will not be produced
as there is no profit involved.
This means only things of value are produced in large numbers, efficiently and cheaply.
While somewhat true, markets generally don’t behave this way.
Look at Microsoft Windows for example.
For quite a long time, Microsoft had a monopoly on the PC operating system market.
You literally could not buy a PC without Windows being pre-installed.
Because they had a monopoly, they over-charged.
To actually produce a Windows CD is extremely cheap, but of course they didn’t want to
just “get by” – they wanted to make HUGE profits – and they did.
In theory, vaccines could be produced extremely cheaply and supplied to all those who need
them.
But this isn’t the case.
Companies sit back manipulating prices trying to make the most profits by exploiting people
in need.
Just look at Martin Shkreli who infamously increased the price of the anti-parasite medication
Daraprim from roughly $13.50 to $750 in a single day.
He was not thinking, “How can I help the most people?”, of course not.
He was thinking, “How can I squeeze the most money out of people?”.
That is capitalism in a nutshell.
Exploitation.
Alternatives
The obvious alternative to capitalism is socialism, that is where people own the means of production.
Just imagine if you owned a company with 400 others in your town.
You all worked on the floor boxing fresh local produce and shipping it around the country.
Not only do you own part of the company – you work there too – as do your friends and
family.
Now, would offshoring ever be a problem?
Of course not!
Who would voluntarily give up their job to give it to a person in a foreign country?
Nobody!
It wouldn’t make any sense!
But that’s exactly what companies do in our capitalist world.
They do not care for their workers despite what they say.
They simply care about profits.
They’ll exploit everyone in their production chain as much as possible.
That’s the only way they can increase their earnings.
We have got to wake up as a society.
We can’t keep getting exploited like this.
Yes, rich people will constantly try to convince us that the system is sound.
But just remember, most politicians are rich too.
They have a vested interest in keeping property prices high and making people do demeaning
and dangerous jobs.
They want to be well-off and the only way to achieve this, at least in their minds,
is to exploit people.
Luckily, our attitudes are changing.
In the last five years, people have been protesting this massive inequality.
There is only one outcome for capitalism – to die.
And it will.
It will die a slow and painful death because it is simply not the best way for our society
to function.
Here is a link to an episode of the Empire Files titled Marxism 101: How Capitalism is
Killing Itself with Dr. Richard Wolff.
It outlines many of the points that I have just mentioned.
Please enjoy.