2.2.1 Capitalism
Capitalism is a
socio-economic system in which the means of production are privately owned. The
father of the modern capitalist economy is Adam Smith. He presented the market
economy of capitalism as the “invisible hand,” which leads private
producers to promote the public interest through the implementation of
self-interest. The principle inherent in the commodity market is that consumers
freely purchase the goods that suit them best while producers try to produce
commodities more suitable to consumers. Thus, society achieves great purchasing
benefits.
Capital owners are
forced to responsibly direct their production because they must cover any
failure in production with their capital. Workers are forced to work
responsibly or otherwise; they lose their jobs. The capitalistic form of
production creates systemic responsibility that achieves high productivity. The
great technological discoveries of the history of humankind, such as the steam
engine, electricity and information technology, always brought along an enormous
rise in productivity for the economy, which increased consumption
substantially. Higher productivity brings higher profits to producers, who purchase
more, and the process grows progressively. The economy then experiences an
expansion in production. When production develops, strong demand for a skilled
labour force also emerges. If the labour market exceeds its supply, the workers
may choose the work posts that bring them more conveniences and demand adequate
wages. Society generally prospers in economic terms.
However, capitalism
also has its very dark side. When the demand for labour becomes less than the
supply, workers must accept poorly paid wages to earn a living. Then employers underpay
workers so they can make more profit. This creates injustice in the production
process, known as the exploitation of workers. In capitalism, jobs are almost
always more in demand than workers, which ensures the permanent exploitation of
workers. This is the source of great problems in capitalism.
When workers do not have enough purchasing power,
they cannot buy enough goods. Reduced demand for labour products brings
problems to the economy because it makes it harder to sell the economy’s
products. If the economy fails to find production demand, it must reduce
productivity to avoid losses. Then the economy experiences a recession. A recession in a market economy results in a reduction in
corporate profits. Insufficiently productive companies cannot secure their
economic existence, which results in their bankruptcies. In a production recession,
workers lose their jobs and do not earn money. The less workers earn, the lower
the purchasing power of society, so the demand for labour products decreases,
which leads to a more significant recession.
During the
recession of a market economy, the differences appearing in the distribution of
the conveniences in the society are much more significant than those that the community
aspiring for its prosperity needs to allow. On one side are people without
fundamental human rights to ensure economic survival and on the other side are
wealthy people who have much more than they objectively need. It is not a sound
basis for a promising future.
The market economy
of capitalism does not have sufficient control over transitions between
expansion and recession in production. The market solves these disorders by
establishing a painful balance where the disempowered workers suffer the most.
The market economy of capitalism cannot provide stable employment for workers,
steady production, or distribution. Therefore, it cannot achieve a stable
society.
***
The winners of the
free market get richer while the losers fail. With the help of the new wealth,
the winners build greater production power and suppress more companies from the
market. Thus, large corporations take over the market, and small companies lose
market share. The owners of corporations become increasingly wealthy while the
people become poorer and poorer.
To stimulate the
working activity of citizens from which capitalists draw out benefits, they
have suppressed the principles of cooperation among the people and have imposed
a system of competition. This results in fear for survival and egotism, in
which an individual becomes a wolf to another individual. Everyone fights for
survival. Consequently, it destroys good social relationships practically in
all fields of social behaviour.
The capitalist
propaganda propagates the system of liberal capitalism as a system that offers
equal opportunity to everybody. This is not true since the rich hold a markedly
privileged position in any respect. Privileges are based on substantial capital
that helps them push the competition away. The system is ruthless towards the
losers, which can be seen well in the example of the United States of America. The
United States of America is the wealthiest country globally. However, this
state has enormous social problems
People work hard
for low wages and live in permanent fear of losing their job. As a general
rule, they do not have adequate health insurance because it is costly. About
20% of the citizens of the US do not have any health insurance. In 1993, a
worker with a minimum wage income in the USA, one of many in that bracket,
earned a personal salary 60,000 times smaller than the President and the CEO of
Walt Disney Corporation.
The enormous social
differences develop crime in the United States. Americans often do not leave
their homes after it gets dark because they do not feel safe. Almost 1% of the
US population is in prison, and the same percentage is under criminal proceedings.
It is a matter of nearly 5 million people, and therefore one cannot speak of
criminal problems but about the political problem of the unhealthy social
system.
The average
American is a modern slave of the rich, and propaganda has persuaded them that
they are free. The propaganda brainwashes them, so they do not even know that
the situation can be better. The USA is probably the most alienated country globally,
full of stress, patients with psychological diseases, a state with a high rate
of alcoholism, drug addiction and crime, the land of broken marriages, loners, and
eccentric people. Annually one of ten thousand inhabitants of the USA commits
suicide. The information provided is found in the book “Dirty Truths” by Michael Parenti.[1]
There is no visible way out
of the problem of capitalism. This is because wealthy people suppress the
knowledge needed to improve society. This repression is organized through the
media, politics, and education system. The main subject in all schools is learning
obedience to authorities. Through education, students learn that capitalism is
the most prosperous social system, so they do not try to change it but instead
try their best to adapt to the imposed goals of capitalism. Thus education
becomes the foundation of the alienation of society. Alienated people are
prevented from finding a good life.
***
Capitalism has
internal contradictions that constantly drag it into crises. Today one can witness
extreme economic disparities among countries and people. This outlines
significant problems in the future, starting with crime and uncontrolled
migration to all kinds of wars. Moreover, capitalism is built on the massive
production, which wastes our natural resources senselessly. The wasteful
spending of natural resources inevitably leads people to fight for economic survival.
If something does not significantly change sooner or later, it will lead to
wars in which a large part of humanity will be erased from the face of the
earth. It must be prevented by forming a far better society.
The ideology of
capitalist liberalism can no longer contribute to the development of society.
The time has come to let it go. What preserves capitalism mostly is the lack of
a better system to replace it. This book represents good capitalism that will
be a turning point in the development of society. Good capitalism must contribute
to the development of equal rights among people. It will shorten the working
hours of workers to let all people have the right to work. The elimination of
unemployment will increase the demand for workers, making them earn more money.
The quality of life for all people will improve. It is not an easy task for
capitalism. To improve human life and the environment in which people live, the
future of humankind will require the introduction of cooperation between
workers, companies and states. The latter is an impossible task for capitalism,
which means that radical changes in the political and economic system are
necessary for achieving a better future for humanity.
C
