Capitalism is an economic system where money buys materials, tools, and/or machines (means of production) and labor power to produce products and services to sell at a profit.
Here’s a formula that demostrates this process created by Brendan Mcooney of Kapitalism101.
M - (MP + LP) - P - C1 - M1
Money ---buys---->Means of Production & Labor Power ---to Produce--->Commodities---to sell for--->Money+1 (Profit)
Capitalism, hands down, has been the most productive economic system society has ever used thus far. The system that was in place before it, Feudalism, only allowed a tiny minority access to a variety of luxuries and financial prosperity. If you were born poor, you died poor. If you were born rich, you died rich. Our economic status in those times were decided by inheritance. Only the rich had access to exotic and premium goods and services.
Capitalism enabled anyone who had capital to organize and create something of value to offer to the public. This empowered someone who was born poor the opportunity to surpass their class status if there was demand for what they produced. This also led to mass production, where lower class people gained access to a variety of goods and services previously only available to the upper classes. Therefore, Capitalism created a better standard of living for more people. This was a new and exciting game for the people to play! Unfortunately, this game became rigged by corporate interests controling two things: government and the currency.
Whoever controls the seeds, controls the farms. Whoever controls the farms, controls the stomachs.
Whoever controls the stomachs, controls the hearts and minds.
If we take a look at the formula of Capitalism again, we would see that it starts with money. To play the game, you need money to buy the materials and/or machines and labor power to produce a product or service to sell at a profit. How do we acquire the money to get started? Usually you’ll get it from the gatekeepers such as banks, venture capitalists, angel investors, and various types of funds. However, what if the gatekeepers don’t believe in the potential of your business or what if your business severely removes their control upon a particular industry? It’s highly unlikely that you would get funding to start your business (or play the game). So basically, everyone doesn’t have easy access to funds to start a business. Therefore, money controls labor. If you can’t get the finances to start a business, you’re forced to work for someone else.
In addition to the gatekeepers of money, the majority of national currencies are created through compound interest debt, which I believe is the main cause to the majority of problems we have in society. I will go further in depth with that in the next section “What is Money”.
In addition to the lack of access to capital, there’s other major problems with this system; first, the motivation of the self. According to one of the most well known theorists of Capitalism, Adam Smith, everyone in the marketplace is operating out of their own self-interest. That leads us to ask “What is the self?” Is the self an isolated body, independent of others? Or is the self a united body, interdependent of others?
Smith’s theory of the self breeds a view of the world that is based on ego consciousness, which is a belief system that everything is disconnected and people need to be in constant competition with each other. This belief system is false because there has been numerous studies that show everything in this universe is energy. If everything is made of the same thing, there’s no way everything is separate. If we see each other as a reflection of ourselves, how do you think our interactions with each other will be? Would we be more open to collaborate and cooperate instead of compete? Here’s a quote from a fellow Peer to Peer interest group member, Floris Koot, explaining his theory of the two types of Capitalism.
"Exclusive capitalism: What I got from you, is mine now. There's winners and losers and If you can't pay, you can't play.
Inclusive capitalism: What I got from you is what we have. We all benefit from the exchange. We are members of one codependent system. We all play, and money is but one of the factors to make that happen."
As stated earlier, the top 1% of Americans possessed 35.4% of the national net wealth, while the bottom 95% held 36.9%.This drastic inequality of the control of resources create the majority of the problems we have today. This breeds cut-throat competition which leads to crime, corruption, non-cooperative behavior, and many other negative side effects.
The traditional corporation that is publicly traded has legal authority to maximize shareholder value over any other purposes. Therefore, putting profit over people and the environment.
This leads to:
An example was the sale of Ben & Jerry’s Ice Cream to Unilever. Ben & Jerry’s had a social mission embedded into its enterprise. One of the companies that wanted to buy B & J would have kept their social mission in tact, but offered a lower price than Unilever. However, Unilever wanted to remove the social mission and seek higher profits. Due to corporate law, B&J was forced to take the higher bid at the expense of its social purpose. This example inspired the B Corporation movement, which is a corporate form that has a social mission designed into its articles of incorporation so the board of directors can’t be sued if they stick to their social mission in expense to seeking higher profit.
This leads to business interests only being concerned with efficiency, meaning operations being faster, cheaper, and better, but not concerned with the side effects of their business on humanity and the environment. Fictitious entities’ (corporations) needs become more important than human needs, than the ecosystem’s needs. Will this lead to everything being owned by a tiny minority? Or Is this already in place? Maybe delving into what money is will answer that question.
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