Capitalism

I think that capitalists hope to turn the whole world into paved cities, with everyone working for his/her living and purchasing large amounts of consumer goods. A select few, huge multinational corporations (HMCs) will run the commerce of the world. Resources will be under the control of HMCs, not national governments. Under this model, HMCs will be able to make huge profits and distribute consumer goods at the lowest prices. In our current global economy, this is termed “Free Market” economics.

“Free Market” economics assumes that what is good for a corporation is good for the public. Often this is the case, in the short term, but HMCs are very narrow in their vision. The chief executives and the board of directors view everything in terms of maximizing profits for THEIR corporation. If their corporation is profitable, then they can supply jobs. The less restrictions they have, the more profits they can make. The part that gets left out is that if corporations hire fewer people at lower wages, they can make larger profits.

     There seems to be a presumption that HMCs lead to more jobs. In fact, it should be apparent that HMCs move jobs to the cheapest labor markets, which results in fewer jobs in more expensive labor markets. Jobs that left the United States and went to Mexico are leaving Mexico and moving to China. Also, just as the cotton gin replaced hundreds of thousands of jobs, technology will constantly replace thousands of current jobs. High unemployment is beneficial for corporations, since high unemployment means people are willing to work harder for less money. 

Most people think that HMCs make a better society, but if HMCs are only concerned about their own narrow interests, then HMCs might be a parasite on society. A parasite is an organism that feeds off the host, with little or no benefit to the host. HMCs consume the natural resources and people, as cheaply as possible, then moves on to another country. If HMC logging companies had their way, they would clear cut all of the forests, and replace them with tree farms. 

Just as monopolies were seen as dangerous, and our government created laws to keep them in check, HMCs need to be restricted. Unfortunately, many now think that our government has been bought out by HMCs. Since the cost of winning a major election is so expensive, a million dollar buys a lot of influence. Campaign Finance Reform is meant to limit corporations from buying influence, but congress has become so addicted that they are willing to continue to take the money (see Campaign Finance Reform).

Capitalism has serious flaws that are becoming all too obvious in the news: corrupt corporate executives, corrupt lawyers, vast inequality of wealth and power, diminishing civil rights, etc. Some would say that because it is in the news, proves something is being done about it. In reality, only a small number of the cases are publicized and revealed. Every year, the U.S. trade deficit increases by about 200 billion dollars, and may reach a total of one trillion dollars in the coming years. Capitalism is being propped up by U.S. consumerism, military weapons sales, financial loans, and foreign investments in U.S. stocks. On the surface, that might seem fine, except military weapons are mainly being used to oppress real democracy in most countries, and financial loans are made for unwise purchases (like expensive military weapons) which places a huge burden on regular production (it takes a lot of coffee beans to pay for a jet fighter). The lack of U.S. exported goods is resulting in fewer U.S. manufacturing jobs. Our huge trade deficit is offset by foreign investments in the U.S. stocks, but every economist knows that investing in the U.S. economy will become less appealing as the deficit increases. A huge sell off of U.S. investments will lead to a global recession, devaluation of the dollar and an increase in interest rates, further depressing the economy.

Capitalism brought us slavery, child labor, tobacco sales, propaganda, toxic waste sites, and invasions for a greater empire. Capitalism made the U.S. rich, mainly during a time when we had a protectionist trade policy. But now that we are an affluent nation trying to compete in a global market, U.S. capitalism is running into problems. Manufacturing jobs are leaving the U.S. for low wage countries, so we are producing fewer goods to export. The service industry, which was expected to fill in for the loss in export, has failed to materialize. Corporations are merging and becoming more powerful. Capitalism encourages greed, which has lead to huge amounts of corruption and bankruptcies.

What is the solution? A certain group of capitalists sees the solution in taking control of all the branches of the government, thereby allowing them to do whatever they think best. They say that what is good for business is good for the country. What they want is for corporations to operate without any regulations. If we need something like raw materials or oil, we use our financial and military power to get them, one way or another (see Neo-cons).

In reality, businesses care more about profits than their workers. That is evident every time a corporation leaves one country, for a cheaper labor market. The problem with the Neo-con plan is that executives make poor decisions, lie, and then walk off with tens of millions of dollars while workers get laid off, and the remaining workers must take pay cuts in order to keep the company afloat. The problem is that this is all too easy and happens all too frequently. The problem is that greed is not going to lead us to a solution. Greed will just result in more corruption and workers loosing their savings and their jobs. 

Don’t get me wrong; capitalism has resulted in a tremendous amount of prosperity. In no way am I saying dump capitalism for something else. I am just saying that capitalism’s flaws are now painfully obvious (corporate bankruptcies with CEOs walking away with tens of millions, jobs moving to other countries, a dependence on arms sales, a huge trade deficit, etc.). At this moment in time, we can either choose to start to fix these problems, or ignore them and face the increasingly painful consequences later. It is only intelligent to start to fix the problems now.