The Growing Crisis of Capitalism

The existing economic status quo is in need of reform. Capitalism possesses a number of systemic flaws which inflict harm on society. Capitalism fails to generate profit to those that are in greatest need. Instead it creates a new type of inequality that is not based on appearance, but rather one that reinforces class distinction. How bad is the current situation? In the period 1979-2000 in the United States, the real income of the poorest of American households rose by a meagre 6.4%, while that of the top fifth rose by 70%.[1] And most disheartening of all the top 1% rose by an amazing 184%.[2] This suggests that the overwhelming amount of economic growth in society is being achieved in the upper classes of society. Can this by considered progress? This can hardly be seen as a dynamic society. This has created a two-tier society consisting of the capitalist kings who roam in their palaces and honest-hard working people who often live in slums and working class neighbourhoods that don’t have the best schools and have higher crime rates as compared to wealthy neighbourhood. This is known as economic segregation. Therefore, if capitalism is socialism for the rich, then what we need is socialism for the poor.

The complete reliance on private capital possessed by a minority in society to stimulate the economy is unstable and irresponsible. This reality has become steadily worse with the advent of the neo-liberal market, which undermines it’s notions of liberty by creating large firms that stunt competition rather then promote it. Also, the concentration of wealth in private institutions creates a disparity in wealth which stunts economic growth and creates an employment floor. This usually creates rigidity in the economy. It is far more rational and responsible if the bulk of the wealth in society is allocated to those who need it the most and would create the greatest benefit in society. This section will outline various ways in which capitalism creates inequality in our society and fails to promote the common good.

On the democratic front, capitalism is incompatible with democracy because it does not allow democracy to reach its full potential. This is due to the fact that capitalism is competitive while democracy is meant to be cooperative. The two main principles of democracy are freedom and equality. Capitalism upholds the freedom aspect of democracy, albeit only economic freedom, but completely rejects the equality aspect. Unlike democracy, Capitalism thrives under inequality. It is democracy that keeps capitalism from truly becoming “creative destruction”. Democracy is what keeps capitalism on its heals. This combined with the fact that capitalism has never been effective without state interference. Democracy is meant to generate good in the economy by giving everyone rights as well as freedom, while capitalism largely undermines many democratic principles, most notable equality. Instead, capitalism creates conflict in society by pinning citizens against one another in the pursuit for capital. Inequality in our society today is based on capital accumulation as capitalism has created a money-driven society. Also, capitalism is elitist in the sense that it creates a new aristocracy or ruling class that is based on capital accumulation in a modern democracy. Although some modern democracies have tried and partly succeeded in curving this reality but it does exist in large part, particularly in the United States. In American universities only one out of 30 students comes from the poorest quarter of society.[3] This reflects the myth of social mobility. Therefore, capitalism fails to produce enough social climbers as well as a legitimate ruling legion that would represent all walks of life in a given democratic society. This can be described as democracy at its height which has never existed.

Capitalism exploits the disadvantaged in society by paying the neediest less, in order to boost profits. In a capitalist free market the wages are not regulated and as a result discrimination is common, particularly discrimination based on sex, race and age. As a result of this, many of the disadvantaged are left behind in society, creating apathy for their needs. Its notion is one in which the wealthy become wealthy through the labour of the poor, whom they employ. In order to prevent this exploitation the state should regulate wages by measuring the value of a specific job. In addition, assure that the labour laws are strict and very pro-worker. Under Neo-liberalism the number of unions has declined and as a result we have a less worker-oriented economy. We need to increase the number of unions and strengthen labour laws to suit the worker. In addition, in a free market the worker’s are often at the mercy of employers and often settle for a lower wage because of the scarcity in employment that capitalism often creates.
The powerful multi-national corporations that capitalism creates often act out of self-interest and never out of the common good. They fail to support social justice and are so powerful in the era of globalization that they can greatly influence the policy of governments while preventing equality and social justice that conflicts with their economic interests. As a result, the rights of citizens are often harmed by these practices. Not to mention, these corporations are often not law-abiding and they successfully find loopholes in laws that exonerates their wrong-doings. Furthermore, many politicians are wealthy and have business links when going into politics. As a result, this prevents them from acting out of the best interests of their constituents; instead they protect business interests in hopes that major corporations will fund their campaign.

[1] Anonymous. The Economist, America’s Great Sorting Out: The Missing Rungs in the Ladder. July 16, 2005. Pg. 17.
[2] Ibid.
[3] Ibid.

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"In the kingdom of the blind, the one-eyed man is king."

http://www.communalknighthood.blogspot.com/

While companies set records in profits

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Real wages for most Americans have been negative in every year since 99 and poverty has been increasing for the last four to five years at least. I wont get into a philisophical debate about whether this is acceptable or not, because there is no way to objectively decide, but as a practical matter if this type of reality continues there is going to be signficant civil turmoil eventually.

Americans are not going to accept forever a system where prosperity for a few is accompanied by stagnation or retreat for most. In most advanced industrial societies this would have created signficant turmoil already.

Amen, we need new politicians instead of "dollar politicians". Americans first; we need to control our politicians and our economy. We need to put America back in the hands of the people.

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“Capitalism cannot reform itself; it is doomed to self-destruction. No universal selfishness can bring social good to all.” —Dr. W.E.B. Du Bois

Winterhaze, your idealism amuses me. You are such a typical reformist. The program of reforming capitalism is stupid because the inherit nature of the system itself is to create profit. If you try to take that away or redistribute this profit all you will do is prolong the inevitable which is the same situation occuring right now. Redistributing the wealth is not going to solve the underlying problem in society. If money solves all our problems then this problem would of never existed in the first place.

There is no good nature in capitalism, especially since it is predatory in nature. If you want to make true change you must cut the source of it. When you find it that's when your idealism will vanish. I could tell you on how I got it but that wouldn't matter to you since you full heartedly believe that capitalism can be reformed.

I think there is definitely room for improvement. The minimum wage increase placebo isn't fixing anything...Middle class get's a 2 dollar an hour demotion until employers (eventually) catch up, Inflation skyrockets and no problem is solved. Instead of a minimum wage increase, or socialism how about just require employers to provide ALL their employees with equal health benefits, not just full time ones..This would fix our ailing health care system as well as actually helping out the poor without Taxing us out of existence. We could balance out the cost to manufacturers by requiring 100% of all containers coming into the country to be inspected thoroughly (at the cost of the importers) . That would also help out national security. Capitalism isn't the problem, Trying to compete with 3rd world countries who have no standards is.

Interesting solution to what you are saying. When 3rd world countries try to industrialize lets smack them with protectionist tariffs so that they can remain poor. You cannot inspect every single cargo that is imported into the United States, it is just impossible because there are so many ships and those ships carry so much more cargo that not everyone can inspect them. Even if you could inspect them don't you think something could still get through? The whole thing about reforming capitalism as you want to do is impractical because employers are not going to pay for every employee's health care, especially since it is very expensive. American companies such as General Motors, Lockheed, and Wal-Mart do not want to take out their profits for their workers health plans. They would prefer national health care. I'm guessing the author of this article much like the person who posted this wanted to get to the core reason of why these things happen. Protectionism is always a one way street which in the long run hurts both economies but primarily the smaller economy.

So then Capitalism isn't really the problem. Our responsibility to care for 3rd world countries as well as our own is? I'm not saying that we don't have a responsibility to help these people. I'm saying that we (Capitalist America) are usually stepping up to the plate. But as we do, don't blame us for not being able to handle our own. As I showed you above, we certainly can take care of ourselves quite well under capitalism and capitalism ISN'T the problem.
Of course some stuff will get through..searching every container at the expense of the importer is just going to help national security. It even's out the cost of imports in comparison to requiring (under law-they dont' get a choice as you implied) that all manufacturers provide equal healthcare benefits to all employees not just full time employees. I'm not trying to punish imports, just even the playing field with american manufacturers trying to compete with imports with the added cost of health care to all employers (under my idea).
I'm not attacking you. I think you misunderstood my proposal. I'm open minded and a rational thinking person..I'm just not a socialist, that's all.

Yes, but not in the way you mean. We need more capitalism, not less.

But that's because those who are in need are necessarily those who do not get a large share of the profit. Your claim will be true so long as anyone is in need, and is thereby misleading. What you mean is that under capitalism, some people have more than others.

Absolutely.

No, we need capitalism for the rich too.

It is the only method which can possibly be stable, and no alternative is less irresponsible.

The bulk of the wealth is already allocated to those who create the greatest benefit to society. The fact that they create the most benefit is why they have the most wealth.

Capitalism has never been without state interference, but as government interference decreases, the success of capitalism increases.

If you want more social climbers, you need more capitalism, not less.

Under capitalism, the least productive are paid the least in order to keep costs down. These people, in virtue of being less productive, become more needy.

This is impossible for the state to do. The only way to measure the value of a job is to see what others on the market offer for it.

Why should the laws favor workers rather than employers? Everyone should be equal under the law.

If we need more unions, workers should form more unions. Workers in a particular trade can tell better whether or not they need a union than outsiders who don't know the specific conditions in that industry. A

To the extent to which this is true, it can be remedied by unions.

In sum, capitalism is wonderful, and all possible alternatives are worse.

Your proposal to "care" for 3rd world IS the problem. The advanced industrialized nations "help" the underdeveloped nations through loans and charity money. These type of assistance does no good when the industrialized nations have so many advantages such as the ability to create more capital when needed. Another advantage is the neo-colonial manner of running things (which is the paternalistic attitude). You did not convince me on the inspection of imports argument and "how its just going to help" argument. I don't believe there is a competition of goods between imports and domestic companies. If there is then obviously imports would cost more for other countries since they do not have the best technology available to make goods at optimal levels. Though you claim not to be a protectionist you still sound like one by saying that you "want to even the playing field" I'm not trying to make you seem like a bad person. The thing is that either your language are coming off wrong to me or you might have protectionist sympathies. If the the case is to level the playing field then we need to start sending all our capital to 3rd world countries so they can be even with us!

Whether your a socialist or not is not the issue. I'm trying to address the point of the article who wrote this. I do not particularly like the authors writing because of this discussion we are having right now. The arguments are so weak that anyone can break them apart. My comments are biased to the art of debating not on the position of the article.

If American Manufactures wanted to compete with 3rd world countries there would be no ability to resist the juggernaut production of the U.S. American products can flood the market all over the world if they wanted to but the problem is that if they do that, the cost will remain the same but profit will cease to exist and therefore no reason to continue on. Honestly do not believe this stuff about companies going under because of overseas competition. It is companies who want to bust union jobs so as to make it cheaper. Look at Toyota, Honda, and Nissan: their vehicles are now starting to be made in the U.S. they are no longer imports because its cheaper to produce them in the U.S. than making in Japan and exporting them to the U.S. not by tariffs but by overall cost of production.

I could show you different articles on why there is outsourcing in the U.S. and they all point to one thing; Free Trade (Globalization) merges economies and shares production in a parasitic way. Wealth is created in the 3rd world countries but the capital is exported with it to the industrialized nations. It is always great to have these discussions with people who are given misinformation for whatever motives.

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How can you have any putin if you don't eat your meat? If you don't eat your meat you can't have any putin

Your proposal to "care" for 3rd world IS the problem. The advanced industrialized nations "help" the underdeveloped nations through loans and charity money. These type of assistance does no good when the industrialized nations have so many advantages such as the ability to create more capital when needed. Another advantage is the neo-colonial manner of running things (which is the paternalistic attitude). You did not convince me on the inspection of imports argument and "how its just going to help" argument. I don't believe there is a competition of goods between imports and domestic companies. If there is then obviously imports would cost more for other countries since they do not have the best technology available to make goods at optimal levels. Though you claim not to be a protectionist you still sound like one by saying that you "want to even the playing field" I'm not trying to make you seem like a bad person. The thing is that either your language are coming off wrong to me or you might have protectionist sympathies. If the the case is to level the playing field then we need to start sending all our capital to 3rd world countries so they can be even with us!

Whether your a socialist or not is not the issue. I'm trying to address the point of the article who wrote this. I do not particularly like the authors writing because of this discussion we are having right now. The arguments are so weak that anyone can break them apart. My comments are biased to the art of debating not on the position of the article.

If American Manufactures wanted to compete with 3rd world countries there would be no ability to resist the juggernaut production of the U.S. American products can flood the market all over the world if they wanted to but the problem is that if they do that, the cost will remain the same but profit will cease to exist and therefore no reason to continue on. Honestly do not believe this stuff about companies going under because of overseas competition. It is companies who want to bust union jobs so as to make it cheaper. Look at Toyota, Honda, and Nissan: their vehicles are now starting to be made in the U.S. they are no longer imports because its cheaper to produce them in the U.S. than making in Japan and exporting them to the U.S. not by tariffs but by overall cost of production.

I could show you different articles on why there is outsourcing in the U.S. and they all point to one thing; Free Trade (Globalization) merges economies and shares production in a parasitic way. Wealth is created in the 3rd world countries but the capital is exported with it to the industrialized nations. It is always great to have these discussions with people who are given misinformation for whatever motives.

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How can you have any putin if you don't eat your meat? If you don't eat your meat you can't have any putin