Capitalism

"All money is a matter of belief" - Adam Smith

Capitalism works on a basis of boom and bust cycles. So at times there will be boom years where times are good, people find themselves richer and manage to forget about the impending bust years. Now the boom years I don't have a problem with, just the bust years. Which as more reputable sources such as Karl Marx have said, is unavoidable in a capitalist system. This is to do with over supply, inflation, the psychology of capitalism, the greater fool theory (the idea that there will always be a bigger fool out there of whom you can make more money out of) and the fragility of the whole system. Things which no matter how much you regulate capitalism will always come together to cause frequent recessions.

I am not going to rant on about the failings of capitalism since I assume if you are reading this blog you already appreciate the need for an alternative to capitalism. but I will say: Capitalism is purely unsustainable - it is just plain wrong to ever base institutions around money. The free market based world that we live in today allows organizations with the most money to unfortunately have the largest voice and thus usually by default the largest power base. Now institutions represent the number of people who work for those institutions. True for nearly everything, but with one exception. Banks, banks are the heart of capitalism. We entrust them with our money for them to go and invest in other things. Now banks investing in business's I have no problem with, because what they invest in and how much can always be regulated. Although today we let the banks have free reign of everything. The problem I do have with capitalism - which as far as I can see can not change no matter how much you regulate banks - is that when it comes to banks getting their voice heard, because they have the most money, (because they are the ones who actually create the money) they have the loudest voice. And as a result any capitalist government will keep on giving them more and more power, further allowing big business/big banks to take control of our lives, and before we know it we end up like America.

"Capitalism can be sustainable" I hear some straggling reformists shout? No it cannot be, some people think that just because a sustainable system works with money it must be capitalism, it is not, I have also heard some people claim that an end to capitalism would mean an end to business. Which is just too absurd to even seriously contemplate. But these are the views that we anti-capitalists are up against. It seems the mainstream media has successfully brushed the failings of capitalism under the carpet and implanted false views into peoples minds.

Capitalism promotes the cult of self, which in turn promotes individualism. "The traits that can be seen in cult of self societies are parallel to those traits that can be seen in psychotic killers: superficial charm, grandiosity and self-importance; a need for constant stimulation; a penchant for lying, deception and manipulation; and the incapacity for remorse or guilt." - Anonymous. The purporaters of this "society" even encourage and create the belittting of fellow people in this celebrity driven soicety that now finds itself leading us, dragging us by our tongues; managing to pull us along with it and at the same time silencing us. It is no secret that this version of capitalism is wildly unsustainable. To keep up this level of luxury that the rich of the "developed" world are so accustomed to, we need to keep those poor people in Africa/Asia/South America who so desperately want to live in basic humanity in that level of extreme poverty.

Capitalism is like a pyramid with the poorest of the poor living at the bottom and the richest of the rich living at the top. This pyramid does not rely on geography but rather complex systems of ruthfulness, luck and individualism. If the people at the bottom of the pyramid choose to pull out and start  their own little self sustaining communities, which I am completely in favour of them doing - they have more than enough resources - then the western world would crumble. Inflation would go through the roof. Governments would not know what to do at all. And in all likeliness chaos would insue. Because the exploited population at the bottom of the pyramid is so large in proportion to the rich at the top relatively few would have to opt out of this system for this chaos to ensue. This has led many people to think that capitalism drives a war not only for profit but also to keep the exploiteds' minds on something other than the fact they are being exploited.

Capitalism is not only bad for the exploited but also bad for the exploitees.

In an unexploited version of society there could be no upper/rich class. It just would not work because comparitve materialistic wealth thrives on exploitation. However I think everyone could live as what we now deem middle class. Everyone contributes to society just enough as a "middle class" to keep the whole thing moving.

Capitalism at the moment, in the form of CDSs CDOs and the like are the mind games of bankers. The derivative market literally creates money out of thin air. It is estimated that the real wealth in this world at the moment is somewhere in the region of 70 Trillion USD. That is money that you can actually feel and is in circulation at the moment. But up to 10x this amount is tied up in property and business. And up to 1000 trillion USD is tied up in derivative markets. This money however no one will see. It is just for the mega rich to trade about in space, existing in nothing more than on a few computer screens and in the belief that it is there. The most upsetting thing about this is for me is that wars are based on this completely fictional money, peoples lives are ruined. If people want to play games with imaginary money then yea let them. Its no concern of mine if they just want to waste their time. But to let these people affect so many other peoples lives? To let them rule the world and do what ever they want? Something is deeply wrong there.

Capitalism rewards consumerism and punishes quality. Capitalism, to keep up with over production creates consumerism. If companies create products that are built to last are inevitably punished. They quite often go bankrupt. For example the company Crocs is at the moment in trouble financially. Even though pretty much everyone's got some, or at least knows someone who has got some. They are still failing because the shoes last for so long not enough people are making repeat buys. They have been flirting with bankruptcy for quite a few months now. So they are faced with a choice. Go bankrupt or down grade the quality of their shoes. Hmm no points for guessing which option they will choose.

Interest drives debt. You might think the interest that you pay on loans is vital for banks to stay afloat? In fact it is quite the opposite, and can quite often lead to their downfall. There is an international bank and when countries borrow money they too have to pay interest on their loans, just like us. But what happens at that point is that since only that international bank can lend to countries, it is pretty much controlling the money supply for the world. This means that in order to pay their interest they have to borrow more money. The country then theoretically cannot escape this cycle then because there is no where to get interest free money from so they need to print more money. Therefore we have a irremovable deficit, and debt will constantly be created in all parts of society as the governments try to use "clever" mechanisms to get the people to pay off the loans of the money they had to borrow in the first place.

I do have a bit more to say on capitalism, but these are the most important points I think. I don't often like to complain about systems, rather offer an alternative. It just seems there's a lot of confusion about capitalism at the moment. Over the centuries we have have numerous chances to enter an alternative system. Mainly these opportunities have been found in various bad recessions as people see the down side to capitalism. As we slowly start to recover from this recession I fear we shall miss a big opportunity to find something different.