Wednesday, April 25, 2012

The Predatory Nature of Capitalism

If you strip capitalism down to its bare concepts two things become obvious. One if everyone had equal amounts of resources (capital, money, fiat currency, what ever you want to call it), then the price of goods or services would be relative to the total volume of capital and based solely on value. Second, in the current model the rich really depend on the poor to be poor in order to keep the price of goods and services down. This sets up a model where the wider the gap between rich and poor, the more value the rich get for their capital. This leads to necessary condition of disenfranchisement of the working class or developing nations.

Another factor to consider is the often touted growth. Growth is really the only way to break through the wealth gap. If you are poor but figure out how to disenfranchise a segment of a population and harvest profit from them, you will become relatively rich compared to the segment you are now leveraging. This is exemplified by switching to importing goods from areas of cheep labor instead of manufacturing them in the market location.

Financiers have this honed to art form. They have leverage against the highest income brackets, giving them a wealth gap above a group supported by a wealth gap. The earth however is not infinite, so sooner or later growth into new markets (new populations to segment for marginalization) will end, and the top predators will start feeding on other predators lower on the food chain. Examples of this can be seen in modern banking systems in consolidation via leveraged buy outs.

This model works on all levels, the hot dog vendor sells dogs himself and makes a little profit, if he reinvests that into a second cart and can hire someone for a barely livable wage, he is creating a wealth gap between himself and the (very small) segment he has now disfranchised. The larger the population under his leverage (ie the more carts and minimum wage employees he has) the larger his wealth gap is likely to grow. A national big box retailer could have a population of tens of thousands leveraged; people in other countries providing cheep labor, and you can bet they are as stingy as possible with their own domestic labor force.

What can we do about it? Stop playing their game. It depends a lot on our complicity as consumers and aspiring leveragers. Stop purchasing anything new unless it is absolutely essential (like food). Expand your skills and join or form a secondary barter community. Often hand crafted goods from an artisan are going to be of much better quality than anything mass produced, thereby imparting more value to something to compensate for a higher price. Second hand goods are also a good strategy. If an item has already passed through the consumer market intact, it is likely going to be of better quality and most likely inexpensive in a second hand shop.

These are hard concepts for someone steeped in the social norms of america of today to embrace. Societal  pressures have been co-opted for the purposes of marketing so long now that even the most trivial of things seem like necessities. On a subconscious level we are compelled to have this seasons fashions or the newest gadget accessory in order to fit in with the world we see broadcast to us as "normal". I don't even have a phone, haven't for months, and I can assure you I am still alive and well. I haven't had a television for more than a decade, and I feel none the worse for wear for it. The last non-consumable item I purchased new was a book about six months ago. So it can be done.

Lets hit them where it really hurts, in the pocket book, the more people turn to a secondary economy, second had lifestyle and local first mindset, the less stable the platform of the wealthy will become. Make less and consume less, and we'll starve the bastards out.

1 comment:

  1. I was just thinking about this, and as a model, freemarket economics functions best in a petri dish, but with out room for expansion, it will inevitably become dominated by one or two (usually the most viscous and predatory) types of bacteria. Capitalism as it is practiced in america is the economic philosophy of animals or savages, fighting with one another to eek out an advantage. You would think humanity as a species is capable of generating a more positive model for economic success, where collaborative efforts breeds sustainable solutions for all.