Why Capitalism isn't Working

The documentary 'Inequality for All', a hit at the Sundance film festival, argues that US capitalism has abandoned the middle classes while making the super-rich richer.

Shockingly, since the 1970s, while the middle class has shrunk and the average worker has gotten poorer, half of the US's total assets are now owned by only 400 people.

Any synopsis of the film runs the risk of making it seem dry again, but essentially it describes how the middle classes have come to have a smaller and smaller portion of the economic pie. And how, since 70% of the economy is based on the middle classes buying stuff, if they don't have any money to buy this stuff, it cannot grow.

Meanwhile, the government has allowed the super-rich, the "one per cent", to take more of the nation's wealth. Half of the US's total assets are now owned by just 400 people – 400! – and, Reich contests that this is not just a threat to the economy, but also to democracy.

In 1978, the typical male US worker was making $48,000 a year (adjusted for inflation). Meanwhile the average person in the top 1% was making $390,000. By 2010, the median wage had plummeted to $33,000, but at the top it had nearly trebled, to $1,100,000.

The Guardian

The average worker in the USA today is poorer than he was in 1978 (adjusted for inflation, average wages have dropped from $48,000 to $33,000), while the top 1% has seen their average income treble to $1,100,000.

Normal people introduced coping mechanism to deal with dropping incomes, including wives entering the workforce, longer working hours and borrowing on house equity.

...since the 1970s a combination of anti-union legislation and deregulation of the markets contrived to create a situation in which the economy boomed but less of the wealth trickled down. Though for a while, nobody noticed. There were "coping mechanisms". More women entered the workforce, creating dual-income families. Working hours rose. And increasing house prices enabled people to borrow.

And then, in 2007, this all came crashing to a halt.

The Guardian

In 2007, people could no longer borrow on the basis of rising house prices.

It must also be noticeable to everyone how polarized politics in the USA is today. The same thing happened after the last great era of income inequality, the aftermath of the Wall Street crash that brought in the great depression of the late 1920s and early 1930s.

One of the key pieces of research... ...is a study of tax data by Emmanuel Saez and Thomas Piketty which shows that the years of peak income inequality in America were in 1928 and 2007. Right before both crashes.

"The parallels are striking," he says. It's also striking what happened in the years after 1928.

How in Germany, to take a random example, worldwide depression also led to a vicious polarisation of right and left. And certain other outcomes.

The Guardian

Is Capitalism not working?

If the object is for wealth to be spread more evenly, rather than for the super rich to get richer while the average man gets poorer, then clearly American capitalism isn't working.

There is no country or market in the world that practices capitalism. All economies are centrally planned and regulated.

Blaming an economic model that doesn't even exist in practice? Good luck with that.

Originally posted by METACOMET
There is no country or market in the world that practices capitalism. All economies are centrally planned and regulated.

Blaming an economic model that doesn't even exist in practice? Good luck with that.

There is no country or market in the world that practices entirely free market capitalism.

In the USA we have a mixed economy:- part free market capitalism, part government controlled.

The professor behind the film argues that regulation of the free market by the state has been deficient in that the ordinary man since the 1970s has actually gotten poorer while the super rich have gotten much richer.

Ordinary people no longer see the USA as a land of opportunity. Well, maybe the super rich do.

Originally posted by ollncasino
There is no country or market in the world that practices entirely free market capitalism.

In the USA we have a mixed economy:- part free market capitalism, part government controlled.

The professor behind the film argues that regulation of the free market by the state is deficient.

Capitalism is a voluntary, consenting exchange of goods between two parties, for their own mutual benefit without the outside threat of force. There is no mixed economy, we have a fascist centrally planned economy.

“Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power” -Benito Mussolini, author of The Doctrine of Fascism, Italian Fascist Dictator

Capitalism does not involve a private central bank setting interest rates
Capitalism does not involve a private central bank adjusting the money supply
Capitalism does not involve a system of fiat currency that requires legal tender laws to make people use it
Capitalism does not involve bank bailouts
Capitalism does not involve government subsidies to industries
Capitalism does not involve using tax payer dollars to bail out or own sectors of the economy
Capitalism does not involve a heavy progressive income tax on labor

The communist manifesto does involve all of these things, however. This system we have now is not, and cannot be construed as capitalism in any way.

Originally posted by METACOMET

“Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power” -Benito Mussolini, author of The Doctrine of Fascism, Italian Fascist Dictator

Originally posted by METACOMET

This system we have now is not, and cannot be construed as capitalism in any way.

Certainly the current system in the USA is an unholy alliance of big business and the government.

Should I change the thread title to 'Why Fascist Corporatism isn't Working?'.

I like that.

reply to post by METACOMET


Yeah, I agree... you can't really call it capitalism when the currency is created out of debt, and for the profit of a private monopoly institution.

That's oligarchy, and plutocracy.... not capitalism.

reply to post by ollncasino


Capitalism is not working simply because it has not had a chance to for a very long time.
Early on in the republic we did not allow "corporations" other than for a small term run, now they are forever.
This must change or someday they will be deemed "too big to fail"...oops, see what happened???
Now there can be no capitalism as "croney capitalists" aka socialists rule the market.
This is exactly why capitalism cannot work, the socialists choked it to death a long time ago.

Originally posted by ollncasino
Certainly the current system in the USA is an unholy alliance of big business and the government.

Should I change the thread title to 'Why Fascist Corporatism isn't Working?'.

I like that.

Fascist Corporatism would be a more accurate title, but hating on capitalism has become such a popular sport for the mocking bird repeaters that you'd probably get more stars and flags if you kept the title the way it is.

I'm not sure how much South Africa is currently capitalist or socialist.

However we have a high rate of poverty and unemployment.

One could say that many people are fed up, and in some cases of strikes and unrest the state actually lost control, or misused it recently.

But one thing I cannot understand is how the government can spend R60 billion to buy weapons.

In 2010 our President Jacob Zuma gave a $30 million credit package to Cuba, and simply wrote off their debts!
That's all because of "struggle history" and socialist buddy systems.
www.boston.com...

Imagine, a country with massive squatter camps that already hosts millions of refugees from Zimbabwe, the Congo and Somalia handing out cash!

So capitalist countries cannot really work as long as they have to carry socialist and despotic freeloaders, like Mugabe's regime in Zimbabwe, or Cuba.

Originally posted by halfoldman
I'm not sure how much South Africa is currently capitalist or socialist.

The ANC is a member of the "socialist international". So its no surprise that they help out their socialist buddies around the world.

Originally posted by ollncasino
Shockingly, since the 1970s, while the middle class has shrunk and the average worker has gotten poorer, half of the US's total assets are now owned by only 400 people.

What is not mentioned is that many formerly middle class became upper-middle-class and upper-class. The middle class has not only shrunk because the rich got richer but because the middle-class got richer.An objective, non-scaremongering documentary ought to factor in all data.

Originally posted by ollncasino

If the object is for wealth to be spread more evenly, rather than for the super rich to get richer while the average man gets poorer, then clearly American capitalism isn't working.

Socialist thought is based on the idea that "if the rich get richer, the poor get poorer". Capitalist thinking denies that the poor get poorer if the rich get richer, denies zero-sum philosophy. My gain is not your pain. Not only is your own gain up to you but my gain can even be your benefit (if I become rich enough to employ you for instance). "Distributing money evenly", that is, having a central committee (Government) take from the successful and give to the poor, has not been shown to work because throwing money at the poor does not teach them the skills to fare for themselves. The actual cause of the poor getting poorer is not me getting richer, it is a plummeting of educational standards in the last 30 years.

Originally posted by Skyfloating

Socialist thought is based on the idea that "if the rich get richer, the poor get poorer". Capitalist thinking denies that the poor get poorer if the rich get richer, denies zero-sum philosophy.

I am no socialist myself but since 1978 (adjusted for inflation) the median average US worker's wage have dropped from $48,000 to $33,000.

The average worker really has gotten poorer.

In the same time period, the average person in the top 1% has seen his income triple.

Now, I'm not claiming that the two opposite movements in income are related, but it is looking suspicious.

Originally posted by Skyfloating

Originally posted by ollncasino
Shockingly, since the 1970s, while the middle class has shrunk and the average worker has gotten poorer, half of the US's total assets are now owned by only 400 people.

What is not mentioned is that many formerly middle class became upper-middle-class and upper-class. The middle class has not only shrunk because the rich got richer but because the middle-class got richer.An objective, non-scaremongering documentary ought to factor in all data.

I would like to see some evidence for this. This sounds untrue to me. Scaremongering? This sounds like something you would hear from Fox News, a lie followed by denegration of a truth teller.

Originally posted by Skyfloating

Originally posted by ollncasino

If the object is for wealth to be spread more evenly, rather than for the super rich to get richer while the average man gets poorer, then clearly American capitalism isn't working.

Socialist thought is based on the idea that "if the rich get richer, the poor get poorer". Capitalist thinking denies that the poor get poorer if the rich get richer, denies zero-sum philosophy. My gain is not your pain. Not only is your own gain up to you but my gain can even be your benefit (if I become rich enough to employ you for instance). "Distributing money evenly", that is, having a central committee (Government) take from the successful and give to the poor, has not been shown to work because throwing money at the poor does not teach them the skills to fare for themselves. The actual cause of the poor getting poorer is not me getting richer, it is a plummeting of educational standards in the last 30 years.

Throwing money at the poor....

...when did that happen ??...I must've missed that.

C...

reply to post by Skyfloating


Capitalism doesn't work. In order for someone to get richer, someone else has to get poorer. It's common sense. It's math. When the United States has prospered it has done so by exploiting other countries. Capitalism working was an illusion. It is a hunter-prey economic system. Other countries continue to be exploited by US corporations and government. Things have finally caught up with the United States. US economic and foreign policy can no longer sustain the United States. The middle class is turning into the poor class. This country is becoming a country of the rich 1 % and the poor 99%. We are reaching a point where it doesn't matter how much money, power, weapons, and intelligence the elite have, the other 99% of the people will seize power in a revolution and the rest of the world will revolt against US hegemony. The new order that is established may work for a while, but it will eventually resemble the old order and fail. The truth is there is no economic system that has been conceived that benefits all members of society. There must be poor people in order for there to be rich people.

We say we have a capitalistic system but we do not - we have a communistic system. Just like in Russia today. The politburo get richer and that's all. The politburo make laws that favor them and disfavor the working poor.
The working poor get poorer while the rich figure out new ways to scam the people.

Bailouts, soft fines, looking the other way at illegal activities - these are common place in communist countries as well as in America.

Elections are rigged in Russia and so are the one's here. Looked who has bought the presidency here and there in Russia and laugh about it when the pee-ons try to change the system or are shot for daring to question authority - just like in America.

TPTB have no ethics - they have no moral higher ground - like Idi Amin they eat their enemies - they are cannibals who serve golden gilt cooked babies to each other and eat with abandon.

If there are such things as demons or devils they inhabit TPTB - ALL OF THEM.

Originally posted by Adaluncatif

Capitalism doesn't work. In order for someone to get richer, someone else has to get poorer. It's common sense. It's math.

I buy a table off of you because you dont want the table, you prefer cash. I buy it off of you for $50. You are happy and richer. I go sell it to someone who really wants that table for $100. He is happy, his life is enriched. I made a profit of $50. I am happy and richer. I donate $10 of that to charity. They are happy. I invest $50 into another table, more are happy. I employ a table-maker for $40, he is happy and richer because he got a job. Capitalism benefits all involved. As I get richer others get richer. By one single table-transaction many are served.

The main problem with capitalism is:

A business starts up, it does very well, it buys other businesses and continues growing till eventually they own every single business in the world.

The eventual end of capitalism is a single business owning everything.

This is already happening in the food, banking, retail business etc.

Once you have a monopoly you cant dictate prices and wages.

Socialism refers to an economic system characterised by social ownership of the means of production and co-operative management of the economy. Source

Communism (from Latin communis - common, universal) is a revolutionary socialist movement to create a classless, moneyless[1][2] and stateless social order structured upon common ownership of the means of production, as well as a social, political and economic ideology that aims at the establishment of this social order.Source

The US is neither of these things. A fitting description would be corporate oligarchy, which means

Corporate oligarchy is a form of power, governmental or operational, where such power effectively rests with a small, elite group of inside individuals, sometimes from a small group of educational institutions, or influential economic entities or devices, such as banks, commercial entities, lobbyists that act in complicity with, or at the whim of the oligarchy, often with little or no regard for constitutionally protected prerogative. Source