The fundamental flaw of our economic system

[Craig234]

We don't have a name for our economic system - only an attribution as the American or western system. We wrongly often call it 'capitalism', when it's really a hybrid system.

There are many good things about it. It's great at creating wealth if not distributing it, and has distributed it somewhat thanks to the 'hybrid' part.

A fundamental flaw in capitalism is that it's always concentrating wealth. Everything done is for 'profit', and so those with the most keep getting more. Unchecked, the result is to move to where fewer and fewer have more and more, until one person would own everything.

So, about those 'checks' to prevent that. One of them is anti-trust legislation. Monopoly is the Achilles heel of capitalism and anti-trust laws the blunt instrument to try to address it, with varying effectiveness largely depending on how indebted the
government is to the monopoly.

In the past one of the checks was that when a new territory opened, people could grab a piece to farm for themselves, rather than the land all being owned by one person who would reap the benefits (rather literally) of others farming it.

That's in contrast to where a US company could own most of the land in a central American country and reap those benefits, owning even idle land simply to prevent competition and keep the workers cheap and hungry; or the modern trend in the US toward corporate farming indeed reaping those benefits.

This is the basic issue: the system concentrates wealth more and more; all the rules in the system on things such as private property support the capitalism part that concentrates wealth, while all the 'checks' on the system concentrating wealth are 'squishy' ideas that are not well-defined and not part of the system that have to be imposed by a government - like those anti-trust laws, progressive taxes, and government programs for providing for people's needs.

People like neat and simple rules, so, not understanding this basic flaw in capitalism, they demand 'pure' capitalism without the check, not understanding what that would do. They just assume that the improvements the checks provide would just automatically happen anyway.

We would see more and more concentration of wealth, more poverty, more hunger, more crime, less education, less healthcare, short life spans, more brutishness, less productivity.

Because they aren't getting 'pure capitalism', what they are pushing for is closer to is - moving in the direction described above, but only somewhat. For example, the difference between 45 million uninsured before the ACA and 20 million after.

These people have no answers to any of these issues. They have no idea about how economics work, how society works, what policies really cause what effects. It's why they're so easily misled with propaganda such as trickle-down claims.

But while they are ignorant, they are a political force and they are causing great harm by fighting for purer capitalism and increasing plutocracy. They're about to cause $6 trillion more such harm to the American people.

Our economic system creates great wealth and puts it in few hands. That's the reason measures are needed to force some greater distribution of that wealth - to prevent poverty and misery for much of the country who helped create that wealth.

Slavery is a good example of the issue. Economically, it 'worked'. Morally, it did not. Economically, it created 'cheap labor' that created great wealth - but put it in the hand of only some. Similarly, after slavery, in the gilded age, great fortunes were created while parents worked for sustinence wages alongside their unschooled children for 12 hours a day 6 days a week in dangerous factories. What's the problem? Capitalism doesn't see any problem. Democracy does.

People who don't understand this are quick to say, 'but we don't have that now'. No, because of the checks that have been put into place - checks they fight.

The relentless concentration of wealth 'pure' capitalism causes needs some checks, and these people need to learn that, and to come up with such checks.

We are moving toward the capitalism side having more and more power and the democracy having less and less - pretty much taken over by the wealthy and serving them rather than the people, with voting almost an obsolete farce.

There is a fantasy the capitalists often have, that 'pure' capitalism with not only create great wealth but that it will somehow automatically be shared - ignoring the reality of the system, and the history showing it's not.

If they don't want to see the country become far worse and plutocratic, they need to address this flaw and the need for checks on the constant concentrating of wealth, whatever checks they select.

The alternative is a greatly harmed people, many being killed and many suffering. These checks are really win-win - 'pure' capitalism ultimately leads to few owning all of a small pie, while distributing the created wealth more broadly makes the society more productive for the benefit of everyone, a bigger pie more distributed.

This is a basic need for the public to understand, why 'pure' capitalism - the simple approach - does not work without checks, checks we now have somewhat, which they'd support, and why they should not just oppose them.

A good example perhaps would be that before the government program of Social Security, 90% of older Americans were in poverty. The 'pure capitalism' idea would say they could save for retirement and be fine. It didn't work that way.

Finally, this chart shows an area of a lack of understanding - the difference between what people think the distribution of wealth should be; what they think it is; and what it actually is.

https://s-media-cache-ak0.pinimg.com...b86f2b3798.jpg

[evince]

Caplitalism that works is for people

capitalism that eats its self is for the perspective new kings and queens


the first has to be WELL FETTERED

the second one unfettered



the founders fought the king and queen type