- Politics and Social Issues
Why Capitalism Increases Poverty for Most People
Why Capitalism Increases Poverty
Many people confuse capitalism with trade. Trade has been with us since the agricultural age, starting with barter for goods and eventually becoming the sophisticated system of money exchange we have today. Capitalism, however, is only three or four hundred years old. Before we had capitalism, we had a brief period of mercantilism, and before that feudalism (the middle ages).
Prior to capitalism, all the land was not owned by people or government personal. The land that was not taken by people living on it was called ‘the commons.’ All land that was not lived on or had homes or palaces or wasn’t farmland, etc. were shared by everybody. This meant one could grow veggies on it or graze one’s cattle on it. Land and water were not owned by anyone. This was all detailed in the Magna Carta on the 15 June 1215.
Capitalism changed this, and with the change, people internationally have become poorer and poorer.
Correlation isn't cause
Yes, there has been an immense advance in prosperity for many people during the last three hundred years. However, that prosperity has lessened during the past thirty years and more and more people are becoming poor. Internationally, the middle classes are shrinking.
There are several reasons for the advance in prosperity. I have listed some.
New World and unexploited resources. The Old World (Europe and Russia) were pretty much taken. There was no opportunity for people to find new minerals, hunt extensively, etc. These countries had been inhabited for 2000 or 3000 years. They had been fully exploited, more or less. With the increase in religious persecution, the increases of taxes by kings to fund their luxury lifestyle and wars, plus the greater availability of ships sailing to the New World, many went to the New World. When they arrived, they could pretty much take whatever land they wanted. They didn’t have to pay for it. They could hunt buffalo (virtually to extinction) and kill the inhabitants of the land who tried to stop them. They could mine gold (South Africa, California), raise sheep (Australia), and they didn’t have to pay a penny for it. Under those circumstances, it’s pretty easy to become prosperous.
However as more and more of these resources got taken and where one couldn’t just stake a claim, people had to start paying for their resources. While it was still relatively easy until about the 60s, by the 70s there were so many people and so much land had been appropriated by government and the rich that it wasn’t so easy to become prosperous anymore. For the last two generations, each generation has been poorer than the babyboomers.
"The world around us is entirely different to what we've been told"
Correlation... Just because success happened at the same time as capitalism doesn't mean the success was the result of capitalism.
Englightenment and increase in science and technology. The Enlightenment was the backlash against religion and the idea that we should use reason and evidence to establish factual information. As a result of this, science and technology came into its own. Consequently we were able to wipe out diseases like Small Pox and Polio with vaccinations, plus use the information we had to invent things like phones, electricity, trains, and more. By removing superstition from the mix and by preventing the Church and Kings from executing and imprisoning those of a scientific bent, the world moved forward.
Infrastructure. Without bridges, roads, dams, trains, passenger ocean liners (like the Tiitanic), cars, etc. movement and information could not flow. While some capitalists certainly built some products, it was essentially the State that laid the infrastructure and paid for it through the taxes of the people. Without that infrastructure, people couldn’t get to jobs, and goods couldn’t get to their market.
Land Ownership Yes, this was part of capitalism, and it most certainly did make some rich, but it was and is only part of the equation that has led to such prosperity. However land ownership by a few is now endangering the lives of the poor because there is no more ‘Commons’ where they can eke out a living.
Capitalism has run its course and is now making people poor
Imagine a game of Monopoly. Everybody starts out with the same amount of money. Then you throw the dice Some people land on good property and buy it and others land on poor property or no property at all. It had very little to do with their skill.
Some aspects of life are just plain luck!
Of course, there’s an element of skill to Monopoly as well. One has to know what to buy and what to sell, whether to build houses or not. Still the luck works with the skill to allow one to win the game.
However, not everybody can win the game. The board is finite. There is only so much property to be bought and so, after a while, even if one has the money, one cannot buy anymore.
This is what has happened in the last stages of Capitalism. We are in the ‘end game’ stages. Most of the land and the minerals have been exploited by people who came before us and are in their hands or the hands of their descendants. At this point, unless one has a substantial amount of money, one cannot buy in.
Capitalism is nothing more than a game of Monopoly – a three hundred year long game, but still a place where there’s a certain amount of land to exploit and things to take, but now most of the land is taken (or owned by government) and it’s no longer possible to go shoot wild animals and sell their skins.
Note something else about the Monopoly game. The richer one or two players became, the less money and land there was for the other players, until eventually the other players couldn’t play anymore because they had payed everything to the landowners.
This is what Thomas Piketty speaks about in his international bestselling book Capital in the 21st Century. The landowners (rentiers) are becoming richer and richer and everybody else is becoming poorer and poorer.
Who do you blame for the financial woes of so many?
The USA had protectionism for 150 years.
Much of modern American capitalism is built on the backs of misery in either the third world or the east. For instance, most computer companies use Foxtron to build their hardward. Foxtron has the most savage working conditions imaginable with workers sleeping on the property, sometimes working 16 hours a day, 7 days a week. Some have committed suicide as a result.
In addition, America has no labour protection. Business can fire employees at will and need not provide paid vacation leave or paid medical leave. No consideration is given that human beings aren't machines.
The reality is that half of Americans either work on the breadline ($15 per hour) or below the breadline. There is little room for joy. The high incidence of mental illness and physical disease is indicative of the stress that the majority live through on a daily basis.
This can hardly be called a successful economic model.
A successful economic model would mean that all the people of the country are well rested and provided for. It would mean that people in far away places had an equal share of the resources that people in the city had. It would mean that there were no potholes in the road and no slums for those so poverty stricken that they cannot afford decent housing.
Capitalism is not a successful economic model. When it focuses on what the market will bear, this means that only the rich can afford the goods, and when it is not profitable to provide for the outlying areas, then goods don't travel to the outlying areas.
Some points to remember about Capitalism
- It is virtually impossible in today’s world to become successful without resources. Studies show that it’s the kids who come from upper middle class families and rich families that tend to be successful.
- Studies show that people who are poor are so highly stressed that they cannot think creatively. That’s because the brain is used elsewhere. Capitalism causes stress because it’s competitive.
- If capitalism was so successful, people wouldn’t have to resort to crime to make money and the majority of the world’s people wouldn’t be poor. After all, Capitalism has had between 300 and 400 years to sort the issues It hasn’t.
- The idea that Capitalism sorts the sheep from the goats and that the stupid people/lazy people won’t be successful while the clever hardworkers will is without merit. By that measurement, criminals wouldn't be wealthy and the numerous studies which show that most billionaires and millionaires fall into the sociopathic category would need to be questioned. The reality is that people are poor because they didn’t have the opportunity to learn relevant skills, the capital to pay the necessary expenses to be successful, and/or the opportunities afforded to those who do become successful.
- Internationally, the middle classes are shrinking and earning less and less. This has been happening steadily for the past thirty years and is part of the ‘end game’ scenario. (Remember the Monopoly analogy?)
© 2015 Tessa Schlesinger