Capitalism

Capitalism is about, making money and hoarding money. It is about investing money to make more money without working. Capitalism is about controlling resources including the human resources needed to make and sell goods so that capitalists have more money to make more money and grow wealthy.  This is a good system if you are rich and a bad system if you are poor.

The economics of capitalism has become attached to democracy, although the connection is neither inevitable, nor even workable. In capitalistic theory, every newborn has the opportunity to become rich, even if his or her parents are poor. The trick is to master the techniques of using money to make money, leaving behind any quaint notions of trading time, effort and skill for money.

One basic strategy is to buy for less and sell for more. Another is to purchase property and services that others will rent or consume on a continuing basis, so that you make money while you sleep. Another strategy is to use some money or capital assets as leverage to borrow and invest more money, increasing your net worth.  The 2008 collapse of financial institutions in the US and elsewhere could be attributed to many layers of “leverage” that concealed the basic fact that individuals and corporations were surviving on loans they could not repay.

I write from a perspective of a comfortable, safe citizen of a country that combines capitalism and socialism with relatively good results. While Canada is not perfect, it is a country that looks viable in the long term, given stability of its neighbor, the USA. The US in contrast is in recession in 2008 with a failing infrastructure and out of control government spending on a futile war in Iraq that was based on lies and promises that could not be realized.

Corporations fail as they grow too large and inefficient. Corporations also fail because their executive officers are greedy, incompetent and sometimes resort to criminal behavior to get more than their share of the corporate wealth. The benefits and vices of a “capitalist” economy are most clearly manifest in the USA.

Different economic systems have evolved with the expanding human population. Different economic ideas in the best case compete to influence government policies. In the worst case, economic ideas conflict with disastrous consequences. The battle between the communist Soviet Union and the capitalist USA dominated world events in the latter half of the 20th century.

The soviet system collapsed, leaving the impression that capitalistic democracies are the best way to run countries, but there are serious problems that in 2008 appear to be fatal. It is likely that capitalistic economies have gone past peak performance, heading for a continuing decline. While these economies have had cyclic behaviors during the 20th century and have recovered after recessions, times are changing. The big problems of the 21st century have never been seen before.

Anderson summarized the analysis of several deep thinkers in his book, Democratic Capitalism and Its Discontents. He stated:” liberal democracy had set loose an egalitarian spirit that it could never fully tame. The notion of the universal equality of man, which liberal democracy claims as its foundation, easily becomes subject to egalitarian overbidding. Equality constantly finds itself undermined by the freedoms that the liberal order secures. The liberty to pursue wealth, to seek to better one's condition, to create, to strive for power or achievement-all these freedoms unceasingly generate inequality, since not all people are equally gifted, equally nurtured, equally hardworking, equally lucky. Equality works in democratic capitalist societies like an imaginary horizon, forever retreating as one approaches it.” 

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Group Dynamics

Group Dynamics is part of the  Psychology & Philosophy series, developed by Persona Digital Books. We encourage readers to quote and paraphrase topics from Group Dynamics published online and expect proper citations to accompany all derivative writings. The author is Stephen Gislason and the publisher is Persona Digital Books. The most recent date of publication is 2010.  The URL to the book description is http://www.personadigital.net/Persona/groupdynamics/