Capitalism .

The problem with capitalism is its strength; capitalism lets companies create new markets and temporary monopolies, creating wealth and jobs; however, these monopolies then try to keep their position as leader in the market at all costs, killing the competition and resorting to immoral activities such as tax minimization and salary freezes. Instead of sharing and paying a social part to contribute to society, they use all and every opportunity to reduce the tax and salaries they pay. If there is a way, they will use and abuse it.

Companies like Apple, Facebook and Amazon all use or used Irish tax laws to pay as little tax as possible. Starbucks did the same.

So markets then need managing and regulating. We need a way of forcing big players to contribute to the well-being of society, as they use the fruits of society to run their business. Health care, education and even defense are all paid through taxation, and when big companies avoid tax and then send a message to their investors that it’s an acceptable thing to do, the investors do the same and then finally, its those who cannot avoid the tax who pay more. People on low salaries and who work long hours have a higher tax burden than the big companies. The independent bookshop on the high street has to pay his tax, but Amazon does not. The independent coffee shop on the high street too. When people refuse to pay their share, then the result is a race to the bottom as others will say that the playing field is not level.

 

Free markets work when the economy is the same everywhere. Today, we have convergence but not equality. It’s not something that can be sustainable however; if companies refuse to contribute to society and the humans it holds. We have to stop hoarding our wealth and start sharing more. Pumping 15% of profit to investors is a ridiculous idea if we don’t pump 15% to the staff as well, and invest 15% in research and 15% in capital. That still leaves 40% for the owner.

 

Companies who refuse to contribute fully to society are the new slave drivers. They want their riches at the cost of society.

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9 thoughts on “Capitalism .

  1. The free market is like free speech. Sometimes people do things you don’t like – sometimes people say things you don’t like. That’s why it’s free. The benefit of a free market is that it maximises economic growth. The benefit of free speech is that it avoids dictatorship and cultural stagnation.

    In a free market, successful companies will displace unsuccessful ones. New ideas will transform companies, markets and entire industries. Old monopolies will die and be replaced by innovative start-ups. That is how economic growth happens. That’s why we’re richer now than a century ago.

  2. But there is a hole in my bucket, Dear Lisa…….

    The market isn’t free because humans want to maximize the money from the products they sell. Politicians need to ensure that the products are safe to use and meet certain standards, so they legislate, and the market isn’t free. Society also needs certain things, education, defense, health, and tax pays for these, so companies have to contribute, so standards have to apply. Asking for a free market is asking for anarchy. If we don’t have regulations, then snake oil salesmen rule the world( or they do already, discuss)
    Completely free markets aren’t possible because the population look to politicians to stop buccaneers running away with cash. Buccaneers running away with the cash is why the wealth doesn’t get shared.
    “We are all richer’ is just plain nonsense if you look at the twisted logic of it all. Yes, Society as a whole is richer; But 60 % of the wealth goes to 5% of the population.The Guardian article may well be spurious but its also rings true!

    • Nobody wants snake oil salesmen to rule the world. Free markets require laws for them to operate effectively. Standards, weights and measures, currency exchanges, pricing clarity, consumer protection laws, environmental legislation, etc. These promote effective competition and benefit suppliers and consumers alike.

      Modern societies require taxes, and these should be applied equally to all.

      We are all richer AND 60% of the wealth goes to 5% of the population (or whatever the numbers happen to be). Yes, both of these statements are true.

      • And, the reason I support free market capitalism is because I want to raise the living standards of the poorest in society. No other economic system can do this. A century of communism left the world’s poorest poorer than ever.

  3. But it clearly doesn’t do what you say, or only as a by product of a race to the bottom, rather than as a deliberate attempt to improve the world…
    Yes, I agree communism left people poorer, but was that due to corruption and abuse or communism?
    When China abandoned Communism, millions came out of poverty. But will this last, and are there still millions left to come out of poverty?

    I was watching a great TED talk by Hans Rosling on this very topic, http://www.ted.com/talks/hans_rosling_shows_the_best_stats_you_ve_ever_seen.html

    hes done a few talks like this,

    very interesting

    Thanks!

    • “But it clearly doesn’t do what you say” – sorry, idreamofthought, but I just don’t understand this statement.

      “Communism left people poorer. Was that due to corruption/abuse or communism?” – Hard to say, as the two things always go together. Hayek argued that Communism inevitably leads to corruption and abuse, and that’s what history shows us.

      “When China abandoned Communism, millions came out of poverty.” – so I think we agree on a lot of things 😉

      I like Hans Rosling. He has a lot of interesting facts.

      • I think we agree an a lot, but I think you (and Me too) should question capitalism ( or socialism or whatever) more than you(or I) do and try to keep an open mind. Economics is, after all, the ‘forgotten’ science.

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