Capitalism is a powerful force.
Simplistically, it mobilises funds — capital — to secure peoples time and effort — labour — that converts or generates goods and services, often from a natural resource or two, that when sold becomes more capital.
The basic idea is the conversion of one thing to another for monetary gain.
The deal with capitalism is that for this process to work, the enriching part, some capital is needed to begin the process. There is an investment required in the extraction or conversion or creation of a resource that can be rented or sold.
How to start becomes the problem if you have no access to capital.
Hence for centuries workers felt exploited as they lacked access to the monies to get themselves off the treadmill. In modern times more westerners feel they have access to capital, sufficient at least for a house, a car, and the luxuries of life.
That they are indentured to the banks for this cash seems to pass them by as they trudge along to the workplace as enslaved as the poor buggers who used to do it for peanuts. Quite literally in the slave systems of the 1800s.
Then there is the inbuilt reality to capitalism that is starting to bite very hard.
When capital is used to create more capital, the original owners of the capital stand to gain the most from the process — the rich get richer.
The argument that wealth creation raises all boats, the more money made, the more money there is to pay workers and their lives improve is also true to a degree. The average wage in mature economies tends to rise over time and the standards of living along with them.
The problem is that individual enrichment is still at the core of the process. The owners of the capital gain the most, the get bigger boats as all the little rowboats slosh about on the tide.
A report published by Oxfam in January 2020 ‘Time to care’ found that the world’s 2,153 billionaires have more wealth than 4.6 billion people.
In other words, a little over 2,000 people hold more wealth than over 60% of the world’s population.
These numbers show what has and continues to happen. Fewer and fewer people have a greater and greater proportion of the wealth.
Suppose the board of a large company has seen some good numbers from the CFO and decides to redistribute some of the profit to the workforce as a bonus.
Rather than do this on some arbitrary merit score they decide to give everyone at the company a one-off bonus that is 10% of their gross salary.
Is this fair?
Check out one answer at the end of the post.
A moral conundrum
Should this aspect capitalism be allowed to continue, this appropriation that is an inevitable consequence of the paradigm?
Well, obviously there are plenty of people busting everything to be one of the 2,000 with more money than any one person could realistically spend.
Then there is just about everyone else who would like more money than they have. They might not need billions, even millions, but most people would like even a little bit more to help with the school fees, the rent and maybe even a holiday sometime.
The 4 billion people living on less than $10 per day certainly would. For them over half the money they earn is likely to go on food.
The 800 million of these people that the United Nations says live in extreme poverty are desperate for more cash simply to not go to sleep hungry and maybe a leg up to get themselves out of their poverty.
Unless there is a better way to redistribute, it would seem that we need an alternative to creating wealth for these people.
Are there alternatives to capitalism?
A question asked many times by folk far more erudite in these matters than Alloporus will ever be.
The answer is, of course, several alternatives. Here are a few of the common ones.
Communism was tried and failed the pub test. People hate being told what to do, especially when it comes to money.
Variants on the tried communist model have been proposed including a few based on anarchism
- Anarchist communism, that advocates decision making by consensus democracy, the abolition of the state, and the abolition of private ownership of the means of production.
- Post-scarcity anarchism, an economic system based on social ecology, libertarian municipalism and an abundance of fundamental resources.
- Anarcho-syndicalism, an ideology centred on self-management of labour, socialism and direct democracy.
Heritage Check System
Then there is the retention of the market economy but with banks stripped of their lending power and with constraints on governments printing money and when they do the money is only used to “buy materials to back the currency, pay for government programs in lieu of taxes, with the remainder to be split evenly among all citizens to stimulate the economy”. This is termed a “heritage check”.
No doubt the originator Robert Heinlein, the American science-fiction author, knew what he meant.
Economic democracy is where the workers control the companies in some sort of democratic system and social investment is carried out by a network of public banks.
Sounds good until we all suffer death by democracy for the crowd is not always operating in its own best interest let alone the interest of the individual.
In a book Post-Capitalist Society published in 1993, Peter Drucker described a possible evolution of capitalistic society where knowledge, rather than capital, land, or labour, is the new basis of wealth.
The thing about this option is not everyone, including an orange-haired president and his supporters, respect knowledge enough. People are quite good at rejecting evidence they don’t like.
We could go on for there are dozens of others and maybe one day there will be one that has a chance.
That system will have to allow people the chance for betterment no matter where they currently sit within the system. This is the essence of capitalisms success — even the lowly janitor has a chance of making it.
It’s a slim chance but it is not zero.
This is how people are at the core. They want, desire, need the opportunity to get better, to be better and to live better.
This great urge for betterment is understandable for those whose life is a struggle. However, it does not stop when you get the Porsche and the air-conditioned mansion with heated indoor pool
Maybe not even when your incense burns and your chakras are in blessed harmony, for your ego will still be lurking somewhere deep in your psyche just waiting for you to slip out of nirvana.
Whatever the system it has to allow for individual enrichment.
Answer to the riddle
Is a 10% pay rise across the company fair?
Well, it sounds fair enough. But 10% for the office junior might buy a weekly trip to the fast-food court. The CEO, on the other hand, gets a new car.
Not so fair after all.
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