"Capitalism is the economic system in which the means of production are distributed to openly competing profit-seeking private persons and where investments, distribution, income, production and pricing of goods and services are predominantly determined through the operation of a market economy, in which anyone can participate in supply and demand and form contracts with each other, rather than by central economic planning. Capitalism is originally defined as a mode of production, where it is characterized by the predominant private ownership of the means of production, distribution and exchange in a mainly market economy. Capitalism is usually considered to involve the right of individuals and businesses to trade, incorporate, and employ workers, in goods, services (including finance), labour, and land. In modern "capitalist states", legislative action is confined to defining and enforcing the basic rules of the market though the state may provide a few basic public goods and infrastructure."
It should be understood that capitalism didn't begin as the definition above describes. Instead, this is what capitalism has evolved into, so far, since the 16th century. Originally, the private ownership of business was restricted to certain individuals or groups of individuals within the higher social classes (other than for very small scale businesses such as farming and cottage industries), which means that capitalism started out as monopolies. The private ownership of businesses is still restricted in certain ways, but we will discuss this in Part 2. Suffice to say that if it wasn't restricted, most people wouldn't be the workers in someone else's business. Also, monopolies still thrive today, in spite of various legislations to prevent them. In fact, without legislation, capitalism is doomed to end up as monopolies because powerful companies will always be able to out compete and subsume smaller companies, as was seen in the period referred to as monopoly capitalism of the late 19th century and early 20th century (which undoubtedly is still occurring to a fair extent).
Originally, the marketplace was by no means free. It was heavily controlled by tariffs, duties, and state controls (and it still is in some countries more than others). The concept of the free market didn't exist at all until the late 18th century. Therefore, the ideology of the marketplace determining the value of all commodities was also not initially a part of capitalism. Commodities also include labour, and in Part 3 we will discuss how labour is still not regulated by the free market, and why it is a great part of the capitalist scam to do so when it is.
Capitalism also arose without the existence or consideration of workers' unions or the political parties that arose from workers' unions, and this allowed the owners of private businesses to economically, socially, and physically abuse their workers to extreme, in order to make greater profits for themselves. The wages and working conditions that we now experience, while still substandard, were fought for by workers' unions, and they were definitely not created because of capitalism. They were created in spite of capitalism. Privately owned businesses and the governments who work for them have actually tried and succeeded in stopping workers uniting together for better pay and conditions. At various time and in various countries, including Britain, workers' unions have been or are outlawed. And without workers uniting together (whether in unions or political parties), conditions and wages would immediately begin to decline once more, because it will always be more profitable for businesses to do so. In fact, privately owned businesses and certain major political parties are still trying to do away with them for just this reason. For example, the Australian workplace agreements (AWAs) put in place by the conservative Howard government in Australia were a direct assault on the ability of workers to unite. Once the government saw that the majority of the public was stupid enough to accept AWAs (due to the short-term gains), the government then tried to install its Work Choices legislation, which began the process of stripping away workers' rights. Fortunately, the public then voted the Howard government out, although it is still disturbing to see that 46% of the voting public still voted for this conservative government.
Also, capitalism is often regarded as displacing the feudal system, but this is not so. Capitalism began as part of the feudal system, and it can and did exist quite well while there was monarchy rule. The British and other European feudal systems came to an end through other processes that happened to be occurring over the same several hundred years that capitalism was evolving. It is important to understand this because capitalism was not created by a new set of powerful people who overthrew to previous form of rule, thereby gaining control over the law and policy making processes within the society. Instead, capitalism arose because the existing elite (i.e. monarchies and their royal families) were greatly benefited by it themselves and therefore motivated to move in that direction. After saying this however, there were new groups of powerful people gaining more and more control over the law and policy making processes, and these people have substantially changed the how and who rules the elitist capitalist society. First, the extraordinary economic success of merchant capitalism and then industrial capitalism served to influence the creation of laws and policies that favoured those who were successful within the marketplace. Second, the formation of parliaments within the feudal system began the process of parliaments using their position of power within the feudal system to politically, legally, and militarily force successive monarchies to relinquish more and more power and control over to them, over several hundred years. With the feudal system in decline, new reasons for being elite needed to be created. Third, the House of Commons used its influential position to slowly create laws that gave it more and more control within parliament, in relation to the House of Lords, the house of the aristocracy.
Therefore, while capitalism began as part of the feudal system, capitalism and government rule served to create two new and very similar and highly inter-related groups of people who now had and still have the major share of control over the law and policy making processes (i.e. the owners of privately owned businesses and management, including politicians, the managers of the society).
Many people assume that democracy arose hand in hand with capitalism, or that democracy made capitalism possible, but this is not so either. During the late 18th century, still less than 3% of the population had the right to vote on who held seats within parliament.
The Motivations Underwriting the
Formation of Capitalism
We could view how and why capitalism (in isolation to democracy) arose from two opposing perspectives, light or dark, good or evil, or benevolent or ruthlessly self-interested.
If we view capitalism as being installed and maintained by people with good intentions, we could say that these people believed that capitalism would allow any man to make it to the top if he had what it takes, no matter what his social background. Therefore, social classes would eventually cease to exist. The reward of wealth would also drive technological advancements and an easier lifestyle for everybody. The competitive marketplace would ensure variety, quality, and fair prices. The consumer would be in control because consumer sales determine the success or failure of businesses. Therefore, the society would become a much nicer and better place to live in, and things would just keep getting better. Further, absolute power could not be passed from heir to heir, and therefore nobody and no family would have an absolute hold on power with which to abuse the citizens for self-interested reasons. Power would be distributed between many people within the society, thereby ensuring that we will never again suffer from the tyranny of self-interested leadership that is installed by force upon the people.
To a large extent, much of this had been gradually happening over hundreds of years during the feudal system. This is what enabled to the development of the new elite (capitalists). Much of what is discussed in Parts 2 and 3, negates all of these beneficial claims as well as the assumptions that underwrite capitalism.
Also, as mentioned earlier, these goals were certainly not the goals of the earlier periods of capitalism. In the earliest period of merchant (trade) capitalism during the 16th century; the industrial revolution, the scientific revolution, and even the earlier agricultural revolution that led to colonialism, were not yet envisaged. Neither was the capitalist mode of production. It was not until the late 18th century that the benefits (mentioned above) of capitalism began to be expressed. Therefore, any rationalisations that are proffered to support capitalism were created after the fact. We could say then, that these benefits are how later generations of capitalists have sought to justify the continuation of their own elitism, because it indeed was the promise of personal wealth and power that motivated these people to seek success within the marketplace.
A darker view of capitalism, and the view implied by the Theory of Elitism discussed on Why We Know that All Elitist Societies are Invalid, would see those people who slowly installed and maintain capitalism as doing what all people tend to do when they gain control over the law and policy making processes within the society. That is, they (knowingly or ignorantly) abused their control over the law and policy making processes within the society to economically, politically, socially, and legally advantage themselves in relation to everyone else. However, in the case of capitalism, the abuse of their control over the law and policy making process was done by the same people you abused their control over the law and policy making processes of the earlier feudal system. Never the less, elite capitalist achieved these advantages by doing the same things that other types of elite ruling classes did.
First, like other forms of elitism, capitalists accepted and increased the social and economic value of the types of people they were (or claimed to be), and/or the jobs they do and the skills that were required to do these jobs, and/or the compensation required for tolerating the working conditions that they endured. In the case of capitalism, these new elite were successful within the marketplace. Therefore, they accepted and gradually increased the economic value of the skills that are required for success within the marketplace, including politics (e.g. managerial, business, selling, legal and some other intellectual skills). They accepted and increased the high value of the compensation required for tolerating the conditions they endured to stay successful within the marketplace (e.g. being in charge of others, risking one's own capital, being educated and/or experienced, dealing with pressure, having more responsibility). They accepted and gradually institutionalised the means by which they become elite within the society society (e.g. private ownership of businesses, intellectual property rights). Conversely, they devalued what they were not, the jobs they didn't do, the skills they didn't require for their jobs, and the compensation required to tolerate the working conditions that they did not endure (e.g. trade skills, physical labour, non-management), and created laws and policies that helped keep the value of these skills as low as possible so that profits would be greater. That is, they sought and still seek to minimise expenses, including wages, just as vigorously as they did and do to increase profits. And they also gradually devalued what they were not and could never be (i.e. royalty).
There is little doubt that if plumbers gained control of the law and policy making processes within the society, they would be declaring that those who are the best plumbers deserve more than everybody else, because of the incredibly important services they provide to the society (e.g. preventing flooding, supplying water on tap to every home, supplying irrigation for agriculture, removing the stench and disease caused from millions of tons of effluent). They would also undoubtedly increase the value of the compensation required to tolerate the conditions of their job (e.g. dealing with effluent, dealing with water). There is also no doubt that they would devalue what they are not. Anybody can claim such things. It all depends upon who has control over the law and policy making processes. Abusing one's control over the law and policy making processes within the society, for self-interested reasons, is corruption. If all forms of elitism are created by corruption, it also means that in the case of capitalism, the means by which elitism is gained is also corruption. That is, there is no reason to accept the private ownership of businesses, or the private ownership of the means of production.
As also discussed on Why We Know that All Elitist Societies are Invalid, the way in which any form of elitism, including capitalism, is created (and justified), filters down throughout the society to explain why anybody has more or less than anyone else. In the case of capitalism, those who also succeed better within the marketplace will be rewarded more than those who are less successful. Those whose jobs require similar skills to those of our elite capitalists (including our politicians) will also be rewarded more than those who don't. Similar to most other forms of elitism, those who are higher in command will also be rewarded more than those who are lower in command within the capitalist society. Therefore, as with other forms of elitism, many other people within the capitalist society are also advantaged (to a lesser extent) by this form of corruption, and this serves to create support for it. Further, those who succeed within this or any other form of elitism, and who are therefore the most able people to speak out against the corruption, are the least motivated to do so. In the case of capitalism: those who have become elite within the society over the centuries, have hardly questioned the validity of the new class structure that has been created by capitalism, and have instead challenged the restrictions on access to the marketplace and the limitations of their ability to make more money. During the late 18th century, well after the beginning of the industrial revolution, this is what eventually led to the rise of the previously unrecognized concept of the free marketplace being the unbiased arbitrator of economic success or failure for anybody who wished to compete within it. When this abuse of power (i.e. corruption) is performed and maintained by a group of like-minded self-interested individuals, it is also collusion, whether it is organised or not.
As also mentioned in Why We Know that All Elitist Societies are Invalid, when a form of rule is ousted by powerful elites within that form of rule, the culture usually remains much the same. This is a very common occurrence, and typically, one tyrant (or group of tyrants) is replaced by another tyrant (or group of tyrants). This occurs because those who were successful within the domineering and corrupt pre-existing form of rule, succeeded because they were also domineering and corrupt. That is, these people had very similar values, ambitions, fantasies, beliefs, and desires to those of the pre-existing ruling class. One would expect that this would be particularly so when a new form of elitism wasn't installed by overthrowing the previous form of rule, but instead evolved from the previous form of elitism, as was the case for capitalism. Therefore, in the case of capitalism, the resulting democratic-capitalist constitution kept things pretty much the same as they had been during the feudal form of rule. In short, capitalism was made by the winners, the most ruthless of the ruthless who had clawed and fought their way to the top in the marketplace game. This was the game that they knew that they would continue to win. This was the game that they and their families already had an enormous head-start in. Therefore, the new elite wanted more of the severely economically/materially stratified society and they were blind to the institutionalised corruption that it was built up. These new capitalists became rich by being able to own businesses (including the long held tradition of owning land and properties from which to receive rent), and by being able to keep the profits of these businesses (after tax) within a poorly regulated consumer-based marketplace, with very few workers' rights (and no workers' unions). Not surprisingly, they especially wanted more of this. These people had also enjoyed higher wages that were based upon to their higher position within the hierarchical structure of companies or the society, and so this remained. They also liked that their wealth, possessions, and businesses could be passed on to their children through inheritance to create family based dynasties, in which they, like the royal family, could maintain their families' monopolies on wealth and power for generations, and so inheritance stayed as well. They liked that their children could go to private schools and afford better educations, which would allow their descendants to monopolise the higher valued positions within the society, and so these unfair advantages stayed too. All of these previously existing desires and ambitions etc form the basis of the capitalist aspect of our constitution, and as such, the rationalisations that supported them were already accepted or tolerated by most of us all long before the rise of capitalism.
It seems that the only thing these new capitalists resented about the feudal form of rule was that they had previously been denied access to power and wealth simply because they were not members of the royal family. This strangle hold on power and wealth was/is disliked by most of us, and therefore this ideal received and receives great public support. In fact, even the barons of the 13th century didn't like that the King had most of the power either. Therefore, this was the only part of the feudal system that capitalists rejected. As such, this was the only injustice/corruption that capitalism eventually put and end to. The only trouble is, we are now being dominated by a different group of people, people who have succeeded within the marketplace, people with certain skills and aptitudes. The accompanying democratic political system that eventually developed also reflects this theme, in that political success is measured by how successful a politician is at selling the most products or services (e.g. policies) to a particular marketplace called the voting public.
However, it seems to be forgotten that all these elitist features of the former feudal form of rule were created by blatant and brutal physical force, and not because they were good or fair or just (even though they were claimed to be). In the feudal system, power and wealth were acquired by the monarchy and the lords through military conquest, and to the victor went the spoils of war. Why? Because nobody was able to stop them, and so they behaved like schoolyard bullies who beat up and took from the weak and the small. And then they claimed that god wanted it that way, and used their enforced control over the law and policy making processes to enshrine this viewpoint in law. It should be mentioned that this conquest by war process is not actually a form of corruption. It may be true to say that the whole nation was better off and at peace because someone or some group of people gained complete control over everybody. It may also be necessary to claim this control by force, particularly when local groups were continuously fighting with each other. The corruption lies in abusing one's control over the law and policy making processes to grant one's self more wealth and more social advantages, and to create laws that serve to keep this power and wealth within the family forever more. It might also be true to say that in order to keep the peace, those in control needed to have more wealth at their disposal to pay for the military expenses associated with maintaining the peace. However, to keep or to spend this money on one's self is corruption, no matter what excuse is given for it. Typically, the excuse has been because of the important, responsible, and stressful job that the monarchy and their royal families did for the society. That is, they abused their control of the law and policy making processes to raise the value of what they did for a living, so that they could have more than everyone else. However, to deliberately attempt to gain more land via war, so that that one may gain more wealth and power for one's self has nothing to do with feeling the need to take on the responsibility of maintaining a stable society and everything to do with one's thirst for power and wealth. That is, these people took control so that they could have more than everyone else, not to provide stability or social benefit.
Making this corruption possible through conquest within the marketplace instead, doesn't now make the game any more good or just, or less socially dysfunctional, now matter who or how many people form the new elite. The monarchy only rewarded these new capitalist elites highly for the same reason it rewarded the earlier military elites of the royal family. That is, so that the royal family could continue and increase its strangle hold on power, control, and wealth. Essentially, the monarchy was buying protection for the monarchy and control over the masses, just as it did when it granted land to the barons. To remove the monarchy doesn't now make all these other aspects of the feudal or the capitalist society valid, good, fair, or just. It continues to be abuse of power (i.e. corruption), and it continues to be forced upon the society because, like in the case of the monarchy, nobody is (politically or economically) powerful enough to stop them. That is, we are now being dominated by economic and political bullies, and they suffer from the same lack of conscience, compassion, and maturity, and the same lust for control over others that schoolyard bullies do, which would make them the last people that you would want to have in control over you and your society.
The truth is that from the barons of the 13th century through to governments of the 19th century, all the people who managed to shift the direction of our society by gaining more and more control over the law and policy making processes, were not very nice people, and were instead the most ruthless of the ruthless in seeking more power and wealth for themselves. However, if the Theory of Elitism is correct, it means that most of us would think and behave in a similar way if we were placed into, or born into the same social positions, because one's social position serves to strongly influence one's attitudes, values, ambitions and fantasies etc. That is, we too would happily exploit our power to make men, women, and children work 12 to 18 hours a day, 7 days a week, for barely enough to live on, so that we could increase our own wealth and maintain our position of control over power. We too would never provide compensation and we would care little for those, and their families, who have been injured or killed within our companies. We too would happily destroy the environment or kill off species if this served to increases profits. We too would brutally enslave peoples from other lands to work for us. We too would never consider the provision of sick leave or holidays, let alone holiday pay. We too would believe that it is our right to hold and maintain our elite status, and that we deserved even more. We too would believe that it was best for the society that we held such power and control, and we too would do what was required to ensure that we remained in control. We too would create further laws and policies that permitted us even more power and wealth if we were capable of doing it. We too would believe that it is best to dominate the working class sheep, in order to keep them obedient and controllable. We too would despise workers' unions, those annoying undeserving people who have the hide to think that they can control us, the saviors of the universe who are responsible for keeping the economy afloat in these economic wars and provide people with jobs. We too would resent that we have to pay more tax than the the poor, and we too would seek to create laws and tax loopholes that would allow us to pay less tax. In short, the more successful we become within this business game (or any other form of elitist rule), the more we will believe in it, and we too would dismiss any talk about the feudal or the capitalist system being a form of institutionalised corruption.
Further, most of us would jump at the opportunity to do it now. We too fantasise about being rich too oneday. Most of us would love to own our own businesses so that we too could exploit the labour of others. This is not just because we are all easily corrupted, especially when we are poor, but also be cause we have also grown up to within an elitist society that has shaped our fantasies and desires. The is issue is discussed more on How the Existing Culture Shapes the Values, Beliefs, Desires, Fears, Fantasies, and Ambitions of the People, and How this Serves to Reproduce the Culture and Its Social Problems. In this web page, we discussed how hegemony shapes our minds, how the values of the elite become our values via hegemony, and how hegemony is not an accidental phenomenon, but deliberately undertaken to condition us to believe in any particular form of elitism. We discussed how we citizens can be conditioned to believe just about anything, including things that are complete nonsense, and to accept the completely unacceptable social problems that arise because of these dysfunctional elitist constitutions. We discussed how the ruling class abuses their power and control to manipulate social institutions, such as education, law, science, and religion, to support that particular form of elitist rule. We discussed how this process now make it difficult for us to make sense of the world unless we view from the perspective of that particular form of rule. We also discuss how the public now fears being without the elite experts and therefore doesn't dare to be without them even when the public knows it is being ripped off, and even when the public doesn't trust them or like a particular leader. We also discuss how there is an equally strong conditioning process to make one believe that all other forms of elitist rule, as well as Egalitarianism, are invalid, unworkable, unfair, corrupt etc. All these hegemonic processes are very evident within all capitalist societies (and some we will discuss more later). For example, we find it hard to understand our world unless we view it from a marketplace perspective. We accept literally hundreds of severe social problems created by capitalism. Our lives revolves around economics, and everything is economically rationalised. We rely upon the capitalist concept of credit more and more. We have taken on the philosophy of the capitalist elite by thinking self-interestedly and self-righteously, qualities that make us very corruptible. Our news media focuses on economic issues more than anything else. Our laws favour companies more than do people and workers. There is much less funding for sociological perspectives within our universities than there is for psychological perspectives (as capitalism is based upon a psychological perspective, but this will be discussed shortly). We are afraid to not pay our economic experts vast sums of money, because we fear the economic collapse of our society. Our institutionalised religion, and other religions that are allowed to exist here, support capitalism (and particularly the psychological perspective). Most of us believe what we have constantly been told since we were born, and we therefore accept or assume that the ideals of capitalism are fair and reasonable, and that all other forms of rule are corrupt or delusional etc. We despise the mafia and other types of organised crime, but not the capitalist form of organised crime. When the people are brought up to believe that corruption is not corruption, neither the new elite or the working classes perceive it as corruption. Incidentally, these hegemonic processes are also very evident in relation to our particular form of democracy (which is also a scam).
As mentioned, as part of the process of stopping rebellion and disenchantment, the elites within all forms of elitist societies declare that it is beneficial for the society that they be elite for the reasons that they are elite. Capitalism is no different. For example, while this is not any different to what was going on within the feudal system, Adam Smith, whose work is still of great influence today, wrote in his book, The Wealth of Nations (1776), that through the mechanism of the 'invisible hand' of the market, the quest for self-interest inadvertently creates benefit for the society. This was also used to support the idea of a free marketplace within which anybody could compete (i.e. anybody could own their own businesses). As such, what he is saying is that greed is good for the society if that greed is governed by the marketplace. And hey presto, so it was accepted and assumed true by all those who were already elite via the marketplace, by all the owners of privately owned businesses who had exploited the labour of others to extreme, by all those people whose elite wages would remain so or become of higher value within the marketplace, by all those people who had the most influence of the law and policy making processes within the society, by all those people who had large amounts of capital to invest in marketplace ventures, by all those people who had capital to lend to others. Interestingly, Mr. Howard, the previous conservative Liberal Party leader of the Australian government convinced Australians to vote his party into government with a similar argument: when business is doing well, so is the society. During his 12 year reign, business did do very well and so did the wealthy. However, homelessness doubled (at least); wages, pensions, and social security didn't keep up with the inflation rate; house and property prices skyrocketed making it now impossible for many people to buy homes; rent prices rose with house prices; chronic public housing shortages arose; public hospitals were in crisis all around the country; public school funding decreased in relation to private school funding; university fees doubled thereby serving to restrict access to higher education based on wealth; and interest rates eventually rose to unacceptable levels. It will take many years for Australia to dig itself out of this hole because the public spending that is required to do so will push up interest rates further, and this is not good for anybody either.
Perhaps it is because the idea that greed is said to be one of the seven deadly sins, that this rationalisation for the capitalist form of elitism is rarely mentioned, and is instead replaced by the moral rationalisation that individuals deserve to be rewarded for their efforts and successes (within the marketplace). This viewpoint omits self-interest and greed, and instead sees capitalism as a meritocracy (i.e. people are rewarded on merit). Once again, it is interesting to see that the Australian Liberal Party, who are now in opposition (minus John Howard who lost his own seat), no longer declare that if business is doing well, so is the society (but they will probably declare this again, just as soon as the public forgets how wrong it was last time and the time before that etc). Instead, they now focus almost exclusively on this moral rationalisation by continually expressing their belief in the right of the individual (to make their own career choices, to start their own businesses, and to be rewarded or not accordingly). This view, and meritocracies in general are based upon a psychological perspective (as opposed to a sociological perspective). Not surprisingly then, the psychological perspective is now fully embedded within the democratic-capitalist culture as though it is natural and rational. Unfortunately however, it is not natural or rational, and as we will discuss here and in Some Other Egalitarianist Perspectives on the Problems Associated with Capitalism, it is extremely socially dysfunctional and therefore creates many social problems. As discuss in On Social Problems, it is also completely useless when applied to solving social problems, but because our capitalist elite persist in denying that it is the wrong perspective for all social issues (in order to protect their own elitism), our social problems continue to be treated from a psychological perspective (e.g. to blame the victims), and therefore all our social problem continue to be reproduced.
Declaring that capitalism is a meritocracy instead of a society based upon self-interest, doesn't change anything with regards to how things turn out. Both perspectives motivate the same actions, and therefore create the same outcomes. One just sounds more morally acceptable than the other, and you can make anything sound morally acceptable, including mass murder, if you put your mind to it. Indeed, the game of politics and business usually entails making what one wants to do sound as virtuous as possible.
To declare that individuals deserve to be economically rewarded in relation to their successes, is to declare that this is more fair and just. The AEM and the Theory of Elitism dispute this claim, and instead declare that it is just another childish excuse to justify why one should be allowed to have more than others. That is, first there is the desire to be more powerful and wealthy, and this motivates people to create reasons for why one should be allowed to. Success (within the marketplace) is just another one of these excuses. As such, it is a scam.
Another part of the capitalist scam is that no limitations are put on how much an individual can be rewarded. It is impossible to believe that anybody's workplace effort could be more than ten times that of a full-time bricklayer (per hour). Twice as much seems unacceptable, even if you believed that certain people should be paid more for their extraordinary effort. Unfortunately however, the greed that underwrites this form of corruption knows no end, which is why the value of company executives and politicians (and related occupations such as lawyers and salespersons) has continued to increase year by year, and always will. This is why those people on elite wages can now receive up to one hundred times more than the average wage. However, this extreme corruption is a pittance compared to how much an owner of a privately owned business can acquire. Is their success really worth anywhere near as much as they are allowed to have? We say, of course it isn't. The work that underwrites success within the marketplace is not worth a cent more (per hour) than any other type of labour. It's just another type of job, which requires a particular type of aptitude. Therefore, allowing people to own businesses so that they may keep all the profits (after tax) is a scam (and particularly so when most businesses do not even attempt to create technological advancements). And if these people do not deserve as much as they receive for the effort and successes, then it is impossible to declare that the capitalist form of rule is fair and just. Further, from the known history, it is clear that the people who slowly created the capitalist constitution had no intention of creating a fair and just society. While some have at least tried to make the competition between privately owned businesses more fair, this is still a disastrous failure. No mater what laws and policies we now create, we will never achieve a fair and just society within this capitalist context. It's like trying to fit a round plug into a square hole. We will discuss this more in Parts 2 and 3.
Another part of the capitalist scam is to declare that privately owned businesses are required to advance technology. While this has been the main way of producing technological advancements up until now, it doesn't have to be this way and it can be done much better when privately owned businesses don't do it, but this will be discussed in Part 2. Further, most privately owned businesses are not involved in creating technological advances. They are involved in jumping on the bandwagon.
A similar argument exists for stratified wages. That is, we need higher wages to encourage people to educate themselves and take on positions of high responsibility? This is not true either and it is also a childish excuse, but this will be discussed in Part 3.
One should be always aware that no form of elitist rule is "what's supposed to be". We in the AEM go further, and declare that each form of elitism is just another institutionalised domination fantasy of those people who gain control of the law and policy-making processes, thereby shaping the society (including the values and beliefs of the society) to satisfy their own childish and immature self-interested desires and ambitions. Currently, we are living in the institutionalised economic domination fantasies of successful businesspeople and politicians (which also benefits lawyers, salesmen, and others to some extent).
You might suggest that if a political party declares that it represents the (real) workers, then the workers would tend to vote for them over those that don't. However, as there is currently no political party that is not taking advantage of this form of corruption and proposing equal wages, then there is no political party that is honestly representing the workers (except for the AEM, and we are not yet a political party, and nor will we become one until you support us).
Before we proceed further, it might be sensible to quickly explain why inheritance is in conflict with capitalism and why it should not be included within a capitalist constitution.
The Invalidity of Inheritance within
In our capitalist society, in which we are required to economically fend for ourselves, we peasants rarely knock back an economic windfall, and inheritance is one of these windfalls, no matter how small that inheritance is. However, inheritance serves to keep your descendants economically and socially subordinate to the descendants of the elite because the children of the elite will receive a much larger inheritance.
Even if the idea that individuals are economically rewarded in accordance to their level of skills, the working conditions of their jobs, or their success within the marketplace were valid, it is completely undermined by the corrupt feudal concept of inheritance. That is, if I leave my children twenty million dollars each, they will be twenty million dollars better off the your children even though they have not demonstrated anything exceptional, and twenty million dollars is a big head start in life. As such, the sp-called meritocracy of capitalism was deliberately corrupted from its outset because the creators of the capitalist constitutions insisted on keeping inheritance. If they, and all capitalists ever since, were sincere about their belief in the ideology of capitalism and the psychological perspective that underwrites it, they would not have allowed inheritance to continue. However, as mentioned, our constitution was created by greedy and ruthless people who were intent of keeping elitism within the family, and inheritance provided the means by which to allow their descendants to continue the economic domination of your descendants, just as the royal family did.
If inheritance were dropped, it would change our capitalist society dramatically. Wealth would be dispersed much more evenly throughout the society. Most big projects, such as mining, would require the cooperation and economic input of many more people contributing a smaller portion of the costs. Alternatively, the state would fund such projects because without inheritance, peoples' surplus wealth would go back to the state when they die.
In the AEM's Egalitarian society, there will eventually be no inheritance, and nobody will need inheritance because nobody will need to worry about their, or their children's economic future.
We can also say the same thing about private education. That is, there may be a case for children who do well in school to be offered more exclusive schooling, but to be allowed a private education because one's parents can afford it is to gain educational advantages without demonstrating any superior scholastic ability. and
Inheritance is also one of the reasons why many forms of elitism, including capitalism, become much more oppressive. As we discussed in Why We Know that All Elitist Societies are Invalid, when people know that they and their descendants are never going to be in the lower social classes, they never have to take this into consideration, and therefore the elitist form of rule tends to become much harsher and brutal for those people within the lower social classes. This is also true, to a lesser extent, when one's knows that one's children and grandchildren are unlikely to end up in these lower social classes. Also, many people within societies that are much less stable in relation to class, such as capitalism, feel duty bound to do their part to keep the dynasty powerful for future generations, or to leave their children a healthy nest egg. This feeling of duty often motivates people to pull no punches and to be more ruthless than they would have been if they only had themselves to worry about.
Some of the Cultural Problems
Created by the Capitalist Form of Elitism
We recommend that you first read Some Other Egalitarianist Perspectives on the Problems Associated with Capitalism, if you haven't already done so.
The minute you allow individuals to acquire more wealth than others, which also serves to provide a whole range of social advantages, ruthless and greedy people will do whatever is necessary to become, or to remain one of these economically elite people. In fact, it is impossible to avoid. And because these people are prepared to be ruthless, they tend to out compete those people who aren't. This is a particularly dangerous situation when those people in charge of the society are amongst the elite (which is normal in elitist societies) because it means that these ruthless people also tend to seek positions of leadership, so that they can deliberately create laws and policies that favour their own ambitions. Ruthless people being in charge of the law and policy-making processes is how elitism began in the first place (See Why We Know that All Elitist Societies are Invalid for more details). So, by supporting the economically stratified society, we are forever encouraging ruthless and greedy people to economically dominate us, rather than to create a fair and just society.
This ruthlessness is clearly reflected in the callous, carnivorous, and amoral nature of what is legally allowable in doing business. It is also reflected in the one and only goal of the private owners of business: to make as much profit as possible, no matter how painful it is for the workers or the consumers. In other words, the goal of business is to be a greedy as possible, and this forms the basis of our society. This ruthlessness is also clearly reflected in the laws that are required to stop many of the ruthless things that the owners and managers of privately business have done, and would happily do again, if these laws were not created. Sadly, if the owners of privately owned businesses and politicians were not consumers too, it is highly improbable that these laws would have been created, because we peasants don't have much influence on the creation of these laws. Unfortunately however, many of these laws are almost impossible to police, and often the authorities turn a blind-eye to it (for various ruthlessly corrupt reasons), and therefore many businesses still behave much more ruthlessly than is allowable. Many of these laws have only been created over the past century through to now, and many more still need to be created. Never the less, the greed underwriting privately owned businesses motivates many of them find ways around these laws legally, which is why corporate law is such a lucrative and thriving business, and why corporate law has become so incredibly complex. Domestically, corporate law, along with the many court cases involving businesses, would almost completely disappear within the AEMs Egalitarian society, saving the country billions of dollars annually.
For capitalist societies, the marketplace becomes of paramount importance. It is the measure of success and failure, and therefore the determinant of wealth and poverty. This marketplace is available to anybody who has the means to compete, which is a relatively small number of people because it costs money to start a business. Most people struggle to pay off their homes and raise a family. We do not have, or cannot borrow the substantial sums of money required to start even a small business. Never the less, the fact is that we all have no choice but to compete in this marketplace competition. That is, we are all endlessly competing against each other to acquire the lowest prices for every product that we use and the highest profits for the products or services we provide to the marketplace (whether or not it is reasonable to do so). If you are not fanatical about this, and don't make money your god and sell your sole for it, like the people who reach the top do, you lose no matter how hard you work. As discussed in Some Other Egalitarianist Perspectives on the Problems Associated with Capitalism, we are all involved in a multi-dimensional economic war against everyone else, and this economic war never ends. Therefore, our society can never slow down no matter how technologically advanced or wealthy our society becomes.
To be elite is to be one of a small minority group. If the elite are not a small minority group they would not be the elite. As such, in order for the elite to be and remain elite, the vast majority of us need to be inhibited or prevented from becoming elite, in spite of the rhetoric about how anybody can achieve elitism within the capitalist society if they believe in themselves and persist. This is why all forms of elitism (deliberately) create poverty and an underclass, as part of the process of reaping the wealth from the society, and as part of the process of securing one's elite status. The capitalist form of elitism also encourages the development of unemployment (which we will discuss when we discuss Privately Owned Businesses), and so too do capitalist governments, as part of the process of keeping wages down as low as possible, which is why you will never see the end of it. And these two social problems (i.e. poverty and unemployment) serve to create other social problems, such as property crime, black markets, boredom, suicide, helplessness, and the rejection of social norms (anomie). Unemployment especially, is not just a great drain on the national income, it also serves to waste the input of many people who could be contributing to the productivity of the nation, and it serves to prevent people from reaching their full potential, which is also unproductive for the country. In the AEM's Egalitarian society, there will be no underclass, and no person entering the workforce, and no person already within the workplace will ever experience unemployment. We say that society does owe you a job.
Within our economically stratified capitalist society, putting aside the issue of inheritance, everyone is left to economically fend for themselves, and this motivates everybody, if not forces everybody (from the very rich to the very poor) to be much more self-interested and much less concerned about the concerns of other people and social problems (unless one can make money out of it), including those problems that are created by everyone having to economically fend for themselves. That is, the culture becomes heartless and unfriendly, which is not the way to produce happy, well-adjusted, and healthy citizens, and it is not something to be proudly passing onto your descendants as though the culture is wonderful. And because we have become much more self-interested, it makes it even easier for the privately owned businesses and governments to economically, socially, and emotionally dominate isolated individuals and minority groups.
This lack of empathy, and even our distrust for our fellow citizens, and this self-interestedness serve to make people within our culture vindictive and self-righteous, which also doesn't sound like the way to create a happy, well-adjusted, supportive culture. This vindictiveness and self-righteousness is the direct result of the rather uncompassionate psychological perspective (i.e. We deserve what we've got and they deserve what they get). If you have read our A Sociological Perspective, you will be aware that the AEM regards the social environment as being the cause for the continual reproduction of most of our society's social problems, but the psychological perspective and the vindictiveness and self-righteousness it inspires, denies this. Self-righteousness and vindictiveness are being developed within each of us in several ways, such as....
- By the nature of our constitution and living within our self-interested economically stratified society in which we have to fend for ourselves,
- By our legal system that upholds the constitution and the laws thereof,
- By politicians who would rather blame and punish the victims of their mismanagement of the society than commit political suicide by accepting responsibility for it, or by blaming the constitution,
- By the media who continually incite peoples' anger and who often accuse the authorities of not being hard enough on those people who have become part of these social problems,
- By the democratic process, in which politicians win office by playing to the self-interests, self-righteousness, and fears of the majority of individuals.
And if it's OK for our media and political leaders to be self-righteous and vindictive, it must be okay for everybody to be, and so everybody is. And in blaming individuals for social problems, nobody moves to change the things that the society is doing to keep these social problems being redeveloped.
But self-interest, self-righteousness, and vindictiveness are not just limited to groups of people against other groups of people. As you probably know from your own experiences within our capitalist society, we could have filled up many web pages much longer than this one with quick examples of all the nasty things (including murder) that individuals have done to other individuals such as family members, best friends, ex-spouses, and complete strangers, over money and because everybody has to economically fend for themselves. We could have also filled many more equally long web pages with examples of people who have ruined their lives (and the lives of others) in their quest for money and/or power. All of these these human tragedies would never have occurred if it wasn't (remotely) possible to fulfill our childish fantasies of becoming an elite person in the first place.
When individuals are left to economically fend for themselves, it becomes much easier to bribe people, including those people who are in charge of money and/or making laws and policies, and the media. Some people will even solicit bribes. Other people become motivated to fiddle the books in order to steal money from the company or government. To say this another way, capitalist societies tend to be riddled with corruption and property crime.
The fact that certain people are allowed to possess more wealth than others sets up a culture of waste through displays of opulence. This began from the idea that a King must wear clothes fit for a King, live in a castle fit for a King, and ride in a carriage fit for a King, etc., and the next wealthiest people display their social and material status through displays of slightly lower levels of opulence, and so on. This common cultural occurrence serves to squander the more precious and rare of resources (and species), and every other resource much faster than if they were only being used for more functional purposes. These displays of opulence can and do occur between individuals, social groups, and societies/cultures. Seeing what those who have more wealth possess then creates dissatisfaction with what one has, even though they don't need what the elite are displaying they have. However, because the mass market serves to make production cheaper, eventually people with less money can afford these things, which serves to make us feel more successful. This is an endless game, which serves to continually raise the bar on what elites and average wage earners aspire to own, even though it is not essential to possess these products or more expensive products. For example, in our contemporary society many people have developed the desire to own prestigious 4-wheel drive vehicles even though they rarely have any intention of, or reason for driving on an off-road environment, and these cars don't carry more people than your average family station wagon. They are merely a means of displaying that one is successful, even though most people who own them earn little more than the average wage. As such, the production of these vehicles is a waste of valuable resources.
On our Some Other Egalitarianist Perspectives on the Problems Associated with Capitalism web page, there is a section titled, "Elitism is a Social Sickness." Here we discuss how elitism is a socially dysfunction, addictive, and contagious social sickness. Now that you have read the previous paragraph, we can inform you that our capitalist form of elitism causes a further addictive and contagious social sickness: over consumption. Western capitalist societies consume more per person than any other society in history, and the only thing that can stop this culture from increasing its rate of consumption is a shortage of resources, which, in the area of non-renewable resources, is fast approaching. This ever increasing rate of consumption is occurring because our economy runs on consumption. That is, capitalism is dependent upon consumers continuing to buy goods and services. As such, consumption is continually being encouraged. And we love to consume. It always makes us feel good when we buy something new, and many people have become very addicted to buying (and to showing off their possessions). Unfortunately, the thrill of buying something new doesn't usually last very long, and typically people feel the need to buy something else in order to regain this feeling of empowerment, and to feel good about themselves. Because consumers are constantly being encouraged to consume almost everything, the society becomes extremely self-indulgent, and this over-indulgence is now perceived as normal, and therefore we resist any restriction of this over-indulgence. To a large extent, we have become like spoilt children who throw tantrums when they can't have the latest toy. On the other side of the market, producers of goods and services become addicted to making larger and larger profits from consumers, and like most addicts, they are never satisfied. Capitalist governments become addicted to receiving increasingly larger taxes from these sales, and so capitalist governments encourage over consumption as well. While we are on the subject of tax, capitalist governments also profit, via taxes, when overcharging occurs, and they also have little incentive to limit the profit margins of the suppliers of goods and services.
The desire for more consumers (and taxes) is the primary motivations for population growth, and this is another problem created when elitism is created by consumption. We don't actually need to increase our population to maintain a progressive and modern society. Instead, businesses and shareholders (and governments) desire a bigger population because they desire to increase their profits (and taxes). This will also assist in making the nation more powerful in relation to other nations. Conversely, without population growth, we become less powerful in relation to those counties that are increasing their populations. And these economic (and military) desires win out over doing what is sensible, and population growth is certainly not sensible. Not only does it place more stress on our already stressed and fragile environment, the never-ending desire to make bigger profits (and more taxes) means that the desire for bigger populations will also never be satisfied. In the AEM's Egalitarian society, no individual will be able to make more money even if consumption increases, and as such, the desire for increasing our population will be diminished dramatically.
Because one of the ways of increasing wealth is by mining the nation's minerals, we create the situation whereby people become motivated to mine our minerals as fast as possible in order make money as fast as possible. This is another reason why our mineral reserves are dwindling at an alarming rate all around the world. It is the same story for land clearing and the over-usage of our water resources.
Unfortunately, possessing more wealth than others is not where the inequality ends, and nor is it intended to end there. For example,
- Children, who are not yet part of the capitalist rat race receive unequal educational opportunities because some children's parents can afford a lot more than other children's parents, which is one of the many circumstances that ultimately serves to maintain the gap between the rich and the poor from generation to generation. Education however, is only one issue in which the children of the elite are advantaged in relation to the children of the rest of society (e.g. healthcare, clothing, employment, pocket money, travel, toys, greater self-esteme).
- Wealthier people and companies can afford better legal representation than can poorer people and companies, which also serves to deter poorer people from legally challenging the wealthy, particularly when losing also means paying the wealthy peoples' legal fees.
- Wealthier people also gain more political clout, which has ultimately served to create laws and policies (and a culture) that favour the wealthy.
- People with surplus money can invest their money to make even more money without actually doing any work, which means that the elites become even more elite because they are elite.
- Wealthy males especially, are greatly advantaged in securing sexual and marital partners. This is particularly so in cultures where one of the only ways low-status women can become elite is by marrying into money, which serves to develop a prostitute mentality within the female population. A recent study concluded that over 30% of Australian men were not considering marriage or raising a family because they could not afford to. All of these men would therefore be much better off in an Egalitarian society.
People are not only expected to economically fend for themselves in the capitalist society, each person is also expected to purchase all the material resources that they need and want, and this not only creates further social advantages for the wealthy, it also serves to waste material resources. For example, most households need to buy their own tools for whatever project they need to do. While this serves to increase consumption and produce money for tool and equipment making companies and the government, it is not necessary. We could keep tools and equipment in a public storehouse, from which people could borrow or hire as they needed them, or alternatively we could make tools, equipment, and a place to do this work available to the public by making various workplaces available for public use. In our currently very self-interested society, this will never occur, but in an Egalitarian society it is very possible, and this would serve to reduce the need to produce so many tools and so much equipment. In fact, for most reusable items, such as jet skies, digital cameras, boats, specialised clothing, camping equipment, and four-wheel drive vehicles, renting them as you need them is exactly what we will be doing in the AEM's Egalitarian society. This not only serves to reduce our consumption of material resources, it also reduces the amount of human resources required for these industries, which can now be moved into other areas of employment, thereby allowing us to be more diverse in our productivity. Also, renting things as you need them will work out to be much cheaper than buying them, thus saving the consumer money. For those items that are imported, it will also serve to reduce our need to import as much.
People who have always been impoverished and powerless within their society usually develop poor self-esteem and loss of confidence, and those who are always wealthy and empowered within their society tend to develop an inflated self-esteem and become (over) confident and sometimes conceited. Neither of these two groups of people can be described as being emotionally undamaged or as having well-adjusted personalities. These personal charactoristics often then lead to social problems that cost the society to treat and manage. In reality, the people of the middle class are the most emotionally undamaged and well-adjusted people in the society because they are not powerless or powerful. And the development of a happy healthy culture begins with the development of an emotionally undamaged and a well-adjusted population (which is created by living in an Egalitarian society), and not by the deliberate development of emotionally damaged and maladjusted population, and socially dysfunctional groups of people.
Different rates of pay, different rates of income tax, the private ownership of property and businesses, the separation between private and public social services, shareholdings and other forms of investments by individuals and companies, such as banks, and many more aspects of the capitalist economy that are required to cater to each individual or company, not only requires tens of billions of dollars annually and hundreds of thousands of people to administer, they also serve to make our economy so complex that most people don't understand it. And this creates a fear of being without economic experts, and this keeps us subservient to those who we believe do understand it. It also makes it very easy to trick us into believing that we are going to be better off when we aren't. For example, when the treasurer releases the coming year's budget statement, he/she along with all the other members of the government always sound so proud of the achievements they have done and are about to do, and their display of success makes us feel proud of them (as was their intention). But then we hear the opposition's reply to the budget statement and we are no longer so sure and proud. We become confused, and we know that most democratically elected governments will tell or not tell us what is necessary to paint a rosy picture or to deny responsibility, to stay in power. And most opposition parties will always paint a gloomy picture and accuse the government of mismanagement in order to gain power. In the AEM's Egalitarian society, the economy becomes so simple and straightforward that most people will have no trouble in understanding it, which lessons our dependency on experts that are required to understand the capitalist economy. In fact, we expect that ordinary citizens will be able to forward their own economic ideas to the government. The AEM's easy-to-understand economy is also an economy that requires much less administration. The simplicity created by AEM's Egalitarian economy will also save the nation over $40 billion annually. And because the Egalitarian economy is easy to understand, it is also much more difficult, if not impossible for the economics department to deceive the public about how our economy is performing. See The AEM's Egalitarian Economy to see how the AEM's Egalitarian economy works.
The capitalist society is a finely balanced system. As such, whenever somebody wins within the capitalist society, somebody else loses, and whenever the government needs more money, somebody, some minority group, or many people will have less because of it. That is, most people always have something to worry about, as there will always be economic conflicts of interest and economic tragedies for individuals, or the potential for them, as long as we continue with capitalism. This is a recipe for a stressful, fearful rat-race of a culture. In the AEM's Egalitarian society, economic conflicts of interest die away, as do individuals' economic tragedies, and stress levels within the society radically diminish because everybody is on the same side, rather than opposing each other. This finely balanced capitalist system also makes it impossible for the nation's economy to win in some way without losing in another way. For example, when Australia is experiencing low interest rates, this can lead to a housing boom, both of which are considered as good signs for the economy. However, because a housing boom is largely created by home buyers receiving credit, it will tend to push interest rates up again, and it will also serve to increase the value of the Australian dollar, both of which are not good signs for the economy. Other examples: when employment levels decrease, inflation increases, and when taxes are reduced, so too is the money spent on social services. And because of this never-ending instability of everything within the economy, the economic interests of individuals and businesses within the society become advantaged or disadvantaged with them, and this motivates everybody to be even more on guard against being disadvantaged and to secure whatever advantages one possesses as best as one can. In the AEM's Egalitarian society, everybody's economic interests will always remain relatively stable and equal with everybody else's. In the capitalist environment that is being forced upon the global community, this economic instability forces whole nations to do the same thing, just as they are motivated to acquire and secure their military advantages.
Because everybody has to economically fend for themselves, everyone behaves in much the same way that the monarchy did before capitalist was introduced. We have become like little Kings or Queens, and we too do not like parting with our money (by way of taxes) to pay for social services, just as the monarchy didn't. As such, it is now our own self-interests that are responsible for our inadequately funded social services. In the AEM's Egalitarian society, there is no income tax and all social services are paid for from the profits of the state-owned businesses, and therefore the self-interests of everyone do not prevent social services from being funded as much as they need to be.
Because capitalist societies are governed by politicians that favour the private ownership of business, and because most politicians have investments in privately owned businesses, they have created laws and policies that give businesses more rights than citizens. For example, when you are caught steeling something from a retailer, you will receive a criminal record as well as a fine or a jail sentence. When a retailer sells you a faulty product and refuses to refund your money, or the retailer or manufacture doesn't honour their warranty of the product, it is not considered a crime and therefore it is not something to be reported to the police. Instead, you are required to pay for a third party to confirm that the product is faulty, and then you take this information to the Department of Fair Trading (or whatever it is called in your state). If the offending retailer or manufacture is seen to be in the wrong, he/she has to replace the item or refund your money. He/she doesn't receive a criminal record, or pay a fine, or go to jail, even though they did attempt to steel your money, and he/she is allowed to carry on business as though nothing happened and do the same thing over and over again. This whole process generally deters most consumers from taking action against privately owned businesses (as is the plan). Another example, your employer is allowed to charge their clients for travel expenses and travel time to get to the client's residence to perform work, but as an employee, you are not allowed to charge your boss for travel expenses or travel time to get to work. Why not? Because our politicians have granted employers more rights than employees. Another example, politicians and businesses are always so concerned that wages don't rise as this will lead to higher inflation, but businesses are allowed to charge as much profit as they can get away with, and so too are the sellers of property. These things drive inflation at a much greater rate than does higher wages, but no limitation on profits or the property market is ever considered. Consequently, wages (except of course the wages of politicians and managers) fall behind the real inflation rate, and now most average workers cannot afford many things including a home. This is no accident.
In actual fact, the capitalist economy is benefited when people receive higher wages, because people with more money spend more, thus generating more profit for companies. However, because businesses are owned by private individuals who are trying to gain as much profit as possible for themselves, and who are also in competition against their business rivals, each business is motivated to keep wages as low as possible, which ultimately serves to reduce the spending of wage earners, which then serves to inhibit the capitalist economy. In the AEM's Egalitarian society, when businesses are owned by the state, the ambitions of each individual owner or shareholder of businesses, and the competition between rival businesses, are no longer an issue, and therefore there is much less reason to inhibit higher wages. This would promote more spending (if we didn't take measures to discourage it), which in turn would benefit the economy.
We also discuss other social problems that are created by capitalism on our other pages. It should also be mentioned that all of these social problems will no longer exist within the AEM's Egalitarian society, regardless of whether or not you accept our reasons for why capitalism is the product of corruption. This alone, is a sensible enough reason to support the Egalitarianism.