What's with Capitalism?

Let’s talk about Capitalism, the free exchange of commodities between individuals. Commodities being: goods or services which are a conjunction of three things, labour, capital, and raw materials, of course we should see that raw materials are commodities as well which are at some point solely labour and capital, all the way down to the mine or forest or farm.  So the capitalist economy is the free exchange of labour and capital. Every economically active person takes part in the economy as a consumer (the exchange part) an owner (the capital) or a worker (the labour). Everyone is a consumer, many people are workers, some people are owners and many people do all three. I want to note white caller managerial work is work, as is its blue-collar brother.

Now there’s a problem with this system known as capitalism, and that is the way in which it rewards people. Workers are rewarded by means of wages, and owners are rewarded for their contribution in terms of profits. Now wait a minute, what do owners contribute, capital, capital is money. Capitalism is a system that rewards money. And beyond that it actually rewards money more than it rewards labour. Let’s think of the economy in terms of growth, growth being an annual increase in the entire amount of wealth or value in the economy, macro-economic growth is of course allowed for by improvements in technology or discovery of new resources. If the economy grows and that growth is not reflected in wages, then capital has been rewarded more than work, even if wages were to grow by an equal percentage to the entire economy, the gap between capital rewards and work rewards would still increase giving more of the growth to the capital.

Of course this could be counteracted by shrinking in the economy, in practice though this is an extremely rare event in fact there is not a solid 5 year consecutive period in US history where the economy has shrunk, even the great depression only showed 4 years of shrinking. And on a global scale the economy, has never shrunk to date. 1 2 3

 The only other way the gap between wage earnings and investment earnings wouldn’t grow apart would be if wages grew disproportionally faster than the economy, which would either run into mathematical issues as the lines cross, or more likely bring the economy to a state where everyone would have to be a worker/investor, which is exactly what we’re going for.

So if we understand that Capitalism is a system that rewards money, or more accurately put, it rewards people who have money by giving them more money without working for it what happens. What happens when people see that it is money and investment that will get them ahead and not hard work, we create an investment economy. Now there are two glaring historical examples of investment economies in North America, where the philosophy was to make your money work for you, because that’s where the reward was. Those are of course the 1920’s and the first decade of the 21^st century (right now). The great depression of the 1930’s and what’s beginning to happen now are the results of a system that rewards having money, over and above working hard.

*Some will claim that both of these events have been caused by corrupt banking systems, specifically the “fed,” but the point stands regardless: interest is the most basic example of money making money, if money makes money then there is no value created and it will devalue said money, value being created only through labour.

If an economy rewards work over capital it will not build the kind of investment economies that are guaranteed to collapse given sufficient time, because it will be based in real value. Value being a product not of investment and ownership, but of LABOUR.

If you have to spend money to make money, why bother with hard work, skill and creativity, just go and spend some money.

So capitalism is a system that rewards money over and above work, where the rich get richer, and where the only means of maintenance in the system are periodic recessions, crisis and depressions, which are unnecessary in other systems, and completely destructive to human well being, spirit, and life.

To solve this problem we must tie work and capital together, invest were you work, work where you invest, and thereby own what YOU make. We should have an economy that rewards hard work, skill, and creativity, not an economy that rewards already being rich.

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