How Capitalism Works

August 31, 2011 at 09:17:27

How Capitalism Works

By Bruce Morgan (about the author)

There is a lot of misinformation and there are even outright lies being perpetuated by the media about the economy. Similar observations even show up in the liberal blogosphere. In this article I will offer a different, uncomplicated perspective. My purpose is to make a deliberately abstruse topic more easily understandable. I will try to avoid value judgments, and simply report on the way I have observed the economy to behave. It is not meant to be an economic treatise, nor to advance any particular school of thought, such as Neoclassicism, Keynesianism, the Chicago School, the Austrian School or Marxism. I hope my observations will be of use to some, though I am sure many will take exception to my comments.

Because of capitalist hegemony, I will restrict my comments to capitalism; specifically laissez-faire capitalism since the U.S. economy is headed in that direction.

There are really only two things that most people need to know about laissez-faire capitalism (in the future, when I mention capitalism, I will mean laissez-faire capitalism.)

Principles:

First, under capitalism, only money has value.

Corollaries:

1. Other items have value only to the extent they can be converted to money or can generate money. This includes things such as labor, commodities and property.
2. What cannot be converted to money has no value and is often eliminated. This can include people.
3. Profits are more valuable than the ecosystem or worker safety.

Second, the purpose of capitalism is to move as much money to the top 0.1% of society, from those who are not (and will never be) at or near the top.

Corollaries:

1. Wealthy individuals, with few exceptions, do not come by their fortune by their own productive labor. Instead, they appropriate as much as possible from other people's productive labor. Capitalists themselves believe that they are entitled to this wealth; even if they did little to earn it.
2. Illegality for the elites is inconsequential. Even if something is technically illegal, if it is not prosecuted it becomes de facto legal.
3. Governments work either for their people or for the rich, they cannot work for both. In virtually all western societies, the ultra rich (individuals and corporations) have captured their governments, to a greater or lesser degree. For the U.S. federal government, this capture is virtually complete. Once the privileged class has control of the government, they can have whatever laws passed that they want, including those that make their crimes retroactively legal.

There, in 241 words (Principles and Corollaries,) is the essence of capitalism as actually practiced. Once these points are understood, the machinations behind current events in the areas of economics, politics and foreign affairs become evident.

This article was deliberately presented in black and white. Those who want grey can get it from the main stream media.

Bruce is a retired university professor who has been actively supporting populist progressive positions for the past ten years. Besides teaching, he has spent almost ten years in the Marine Corps, including more than two years in combat, and has (more...)

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