Reinventing Capitalism?

It is argued that Capitalism is the single most effective engine for change we’ve ever invented but it’s also been instrumental in creating the very challenges that threaten our continued survival: climate change, the impending energy crisis, even over-population.

Does capitalism’s focus need to be changed – from short-term stock prices, valuing profits over people, and costs deferred to future generations – to some more alluring system if this system exists.

I personally believe that anything we will do to reign on Capitalism will stifle the wonders that it produces. I also believe that the so-called “problems of capitalism” are not from capitalism itself, but from attempts to “improve” on the free market in an attempt to better some particular interest group by redistribution from some other lesser interest group, at the point of a gun. Capitalism is simplicity itself, and any complication makes it worse. The philosophy is very simple: individuals trade with one another only when it is mutually beneficial, and their interaction does not harm the person or property of any third party.

Of course, we must understand that economic systems are the slaves of political systems. If we want to solve the catastrophic problems flowing from what passes for capitalism in the early 21st century, we must first correct the flaws in the political system that nurtures it.

In the United States, where political parties sell legislation to vested interests and maintain ‘party whips’ to ensure that party-controlled representatives enact the legislation they’ve sold, gigantic corporations control the economic system and manipulate it to their own advantage. I believe that is the root cause of the failure of capitalism.

As long as political parties control the legislative and executive branches of our government, and through them the judicial branch, it will not be possible to change our pseudo-capitalistic system.

Until we reinvent our political system we cannot take the simple and obvious step of laying a progressive tax on the gross receipts of corporations. At present, humans are subject to a progressive tax, but corporations are not, thus allowing their parasitic growth. When they are subject to a progressive tax on their gross receipts, it will break up companies that are ‘Too Big To Fail’, it will revitalize our economy by ensuring competition, it will improve our employment by preventing the suffocation of the small businesses that have long been known to provide more employment, it will allow the surviving companies to maintain their own direct employment as well as the indirect employment of the support services that supply them and their employees, it will spread prosperity by preventing the obscene concentration of wealth that marks our present system, and it will inhibit the inflation that has such a vicious effect on the poorest people.

Throughout nature there are moderating influences to inhibit excessive growth; living organisms of all kinds are kept in check by competition for foodstuffs, predators, the force of gravity, the need for mobility, and a multitude of other controlling factors. Under capitalism, the only natural constraint on excessive growth is competition. The quest for profit is the driving force of capitalism and competition is the leavening force that prevents the excesses inherent in the system. Competition is a necessary ingredient that ensures quality products and fair pricing. When the political system lets corporate giants absorb or suppress their competitors, they eliminate the only protection available to the people in a capitalist system.

Bottom Line: I believe Capitalism doesn’t have to be reinvented, merely properly regulated. Free Markets are real good, but they’re not perfect. We must though carefully guard against their excesses.

Share your thoughts.

Written by

Ziad Abdelnour is a political activist and is the Founder and President of the United States Committee for a Free Lebanon.

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