Friday, 12 August 2011
CAPITALISM WILL EAT ITSELF
Unconstrained capitalism contains within itself its own inevitable destruction.
Despite the current emphasis on money markets, capitalism relies on two, far more basic, things for its continuation - production and consumption, and the greatest of these is consumption. Without real production and real consumption, the international money market is nothing more than a game of "Monopoly." Capitalism is only healthy when production and consumption are perfectly balanced.
Within the capitalist system, consumption is made possible by the making of a profit on production. This profit is shared between the bosses and the workers. However, as individual bosses tend to take a greater share of the profit than individual workers there is an inevitable movement of wealth into the bank accounts of the bosses. As efficiency leads to fewer and fewer bosses as companies are merged, fewer and fewer extremely rich people become the owners of most of the wealth of the world. It is this fact that has led to the situation in which western capitalism now finds itself - watching and enabling its own death throes.
It is not only efficiency in production that is necessary for the success of capitalism. Efficiency in consumption is equally necessary. The most efficient consumers are workers on slightly above average salaries. This is because the vast majority of their wealth has to be spent on real, constantly needed, commodities such as food, clothing, housing, the utilities and transport. The purchase of necessary products by workers is what powers capitalism.
The least efficient consumers are the extremely wealthy. They are simply unable to spend the vast majority of their individual wealth on necessary products so they either stockpile their wealth or spend it on "unreal" commodities such as obscenely expensive works of art. Such luxury products tend to require very few workers in their production and so the profits made on the purchase of such items are not passed on to many, if any, efficient consumers. Alternatively, the wealthy will gamble their wealth on the money markets which is no different to working people handing their wealth over to bookmakers or shoving it, coin by coin, into casino fruit machines.
Driven by the, almost unopposed, free market ideologies of Margaret Thatcher and U.S. right wingers, capitalism has now put most of the world's wealth into the ownership of a very few, extremely inefficient consumers. The increasing impoverishment of the world's workers has stalled consumption of production right at the heart of the engine of capitalism. Poverty, as has been shown over and over again, also leads to less production as workers have no incentive to be efficient in their production of goods. It is this inefficiency in both production and consumption that has led to the meltdown in the world's economy and the current recession which, I fear, is just the beginning of something much worse. We are living through a moment in time very similar to the fall of the Roman Empire and the outcome will be just as world changing.
The most infuriating thing about the collapse of most of the world's economy is that we are aware of the fact that unbridled capitalism is ultimately destructive and works contrary to the goals of capitalism. The wars and depressions of the 20th. Century were all, primarily, the result of inefficient distribution of the wealth created by the capitalist system. Furthermore, we were shown that controlled capitalism was the only way out of such wars and depressions. It was the imposition of "social capitalism" (my term for controlled capitalism that deliberately sets out to enrich workers so that they can consume efficiently and power the economy) that rescued the U.K. and Germany (amongst other countries) after WWII and, irony of ironies, the U.S.A. during the Roosevelt years. It was also what made Sweden the nation with one of the highest standards of living in history, in the second half of the century. Not only is this infuriating it is also emphasises the tragic element of the U.S. administrations recent decision to to try and save it's economy by enriching the already rich and impoverishing the workers of their country. In taking this road, the U.S.A. has signed its own death warrant as a world power and now faces a future of poverty and social anarchy. It will, of course, take the rest of the developed nations down with it. The only nation that will weather the economic storm of the next few years will be China. They will achieve this because they have studied the history of capitalism during the last hundred years or so and have deliberately embraced social capitalism, albeit a extremely nationalistic form of social capitalism (which is worrying).
Pray for your children and your children's children, as they are the ones that the greed of our rich and the stupidity of our poor have condemned to the new dark ages.
Posted by MadPriest at 12:14