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Egalitarianism and the Capitalist Scam (Part 2)

Continued from The Capitalist Scam (Part 1)


The Invalidity of the Private Ownership of Businesses (and Patents and Intellectual Property)
Within our democratic-capitalist society, and in many other materially stratified societies over the past 10,000 years, including our previous feudal form of rule, the ability of individuals to own their own businesses is seen as a virtuous ideal, if not a right. It personifies the (incorrect) idea that one can be independent and in control of one's own destiny. One is able to follow one's dream, to find wealth, or fame, or love, or social respect, or to be a super provider for one's family. Surely, this autonomy and empowerment of individuals in a good thing. After all, the people who have it feel so good about themselves. Unfortunately, however, these good feelings are gained at the expense of those people who work for them, those people who don't get to feel so good about themselves.

In our capitalist society, those brave individuals who have capital to spare and who are prepared to risk it to start a business are said to be entitled to keep the profits of that business (minus tax), because it is thought that without these brave individuals our society would never have advanced to where it is now and it would not progress further. We should be thankful that there are such people who are prepared to save us. Saving us however, is usually that last thing on the minds of any owner of a privately owned business. Further, the truth is that we have never needed brave individuals to risk their own capital to start any business or service, just as we don't need individuals to risk their own capital to start a school or a hospital. If the citizens perceives the need for (or a profit in) a particular business or service, the state can fund it, and the profits will go back to the state, rather than to these brave individuals who had enough money to start or buy a business. Further, we don't need private individuals to own companies to make them run well and efficiently just as we don't need private individuals to own schools or hospitals (or the country) to make them run well and efficiently.

Consider this. If the ownership of land, businesses, or the means of production that was achieved by a monarchy or another type of dictator by being more physically or militarily powerful than others, is regarded as blatant domination and making no attempt to be fair or to do what's right, then how can the ownership of land, businesses, or the means of production that is achieved by being more economically powerful than others not be regarded the same. Therefore, the private ownership of businesses is a form of domination that allows private individuals to acquire the profits that should rightfully belong to the state/society. The fact that our capitalist system allows anybody who can afford it to also own businesses is irrelevant, except for the social support that it creates for this form of corruption. In the Egalitarian society, nobody can use the profits that are generated from businesses for personal reasons, and the only thing that can be done with this profit is to use it to improve and create services and products for the society and to develop new business enterprises.   

The main reason that people want to own a business is not for the benefit of the society, but for the self-interested reason of getting ahead. If it were not for this goal of getting ahead (or the fear of falling behind), not many people would desire to actually own a business other than to be their own boss, which is still possible within an Egalitarian society for many different occupations, and we still need people to be in charge of other people. Further, the working of life of these people and those who work under them, will become much less stressful (See our Humanised Workplace Culture web page for details).

While the so-called ideal of private ownership of businesses is supported by rationalisations about how beneficial it is for the society, the AEM declares that it is harmful to the society, completely unnecessary, and it is primary method designed to keep the majority of the wealthy people wealthy, and the majority of the poor people poor. If there are any social benefits that are created by the private ownership of businesses, they are completely overwhelmed by the endless stream of major social problems that are created by them. Let's now look at these rationalistions that support the private ownership of business to demonstrate just how absurd they are.

Cheaper Prices
The most common rationalisation for the private ownership of businesses is that the competition between privately owned businesses serves to reduce the costs of products and services. In the AEM's Egalitarian society, the government has every incentive to continually search for ways to supply products and services more efficiently and to sell them at reasonable prices because the Head of State, the Leader of the Government, their family members, and everybody else has to pay the same price that you do, while receiving the same wage that you receive. And this means that we don't need businesses to be privately owned in order to keep prices down. 

The truth is that we desperately need competition to keep prices down because we live in a capitalist society. Without this competition, privately owned business would and do overcharge as much as possible because contrary to the ideal of cheaper prices, it is the goal of any privately owned business to make as much profit as possible. As such, many companies charge as much as they dare to. Also, many companies have been found guilty of collusion so that they can all make more money and not have to fear being undercut by their competitors. This practice is widespread within capitalist countries, but it is almost impossible to prove, and so you can expect to experience more of it, and the only reason that it occurs is because businesses are privately owned. But there is also another type of collusion going on - one that does not require people conspiring together, but is perpetuated by each individual within that industry. For example, professionals such as lawyers acquire a law degree because they are chasing a high wage. As such, it is likely that they intend to cash in on their qualifications by charging as much as their competitors are already charging, even though most lawyers are quite capable of undercutting their competitors. And this also occurs because we live in a capitalist society. Therefore, consumers are often unable to buy such products and services as cheap as they should be able to within our capitalist society. Further, many companies, especially large companies that have cornered the market, attempt to improve profits by attempting to remove or stifle the competition (which is a very uncompetitive thing to do). Take Coke for example. Many other companies have introduced new cola products onto the market, but Coke, being a multi-billion dollar company, reduced its prices below what coke costs to produce (in that part of the world) so that the new product could not compete and the company eventually went bankrupt, after which Coke reset its price back to where it was. And because this is legal to do, this story is repeated over and over again in many industries where big companies control an industry, and it demonstrates that the marketplace serves to favour wealthy companies in relation to small companies. Once again, the consumer often pays much more than the product is worth because of this competition between privately owned businesses. In the automotive industry, the price of original spare parts are usually marked up 3 to 4 times what they are worth, and this occurs because nobody else can supply original spare parts. That is, the car company has a monopoly on these products and therefore, immediately forgets the ideal of cheaper prices.

In our contemporary capitalist society, the government actually has to waste expensive human resources in the never ending fight to stop privately owned companies from partaking in anti-competitive activities such as these, and most people seem to agree that they are not achieving this goal. In the AEM's Egalitarian society, anti-competitive activity becomes a redundant issue (even though there still will be competition between state owned businesses). Therefore expensive government organisations such as the Australian Competition and Consumer Commission (ACCC) will no longer be required to act as a watchdog on privately owned businesses.

The competition between privately owned businesses actually makes it more difficult for the consumer to find the best buys. Suppose you wish to buy a new computer. First, you will probably restrict your search to your local area or town, but this may not be where the best buys are. Second, you will need to ring, and/or visit many computer retailers, and/or search the web to find what products are available and what prices each retailer is asking. To find where to ring or visit will require doing such things as searching through the yellow pages, looking for advertisements in the paper, on television, or in catalogues left in your mail box, or driving around your local area, or walking around shopping areas to find computer retailers to investigate. All this investigation wastes lots of time, which many people don't have to spare, or the patience to do, and some people just aren't very good at doing it, and it is easy to miss something or some retailer. As such, most consumers don't usually find the best buy (which is something that most retailers are counting on). In the AEM's Egalitarian society, you will only need to phone, visit, or checkout the website of just one of the state's computer outlets to find all types of new computers (and their prices) that are available throughout the country, making shopping so much easier, more time efficient, and more successful. Now suppose you want to buy a second-hand computer. First you will need to look in all those places where second-hand computers are advertised, such as the classified section of news papers, papers that specialise in second-hand items, second-hand shops, websites the specialise in second-hand items, auctions, and/or Internet auctions. As you know, most people don't look this thoroughly, which means that once again, most people don't find the best buys. In the AEM's Egalitarian society, once again you will only need to phone, visit, or checkout the website of just one of the state's secondhand computer outlets to find all the second-hand computers (and their prices) that are available throughout your local area or town, once again making shopping so much easier, more time efficient, and more successful. In our capitalist society these tasks are made difficult because privately owned businesses are scattered throughout your town, and the places where they advertise are also scattered everywhere because there is also competition between advertising companies and advertising mediums, and these problems exist for every product or service you wish to buy, rent, or use. And if you think that this all serves to make the country more efficient, and helps to keep prices down, think again. Each of these retailers and suppliers of second-hand items, and each of these businesses that provide advertising require their own management, staff, premises, and other costs associated with running a business, and these costs serve to make products and services more expensive. In the AEM's Egalitarian society, we will only need one retail outlet (which supplies the whole range of a particular type of product or service) per supermarket or area, which will therefore dramatically reduce the costs of running the retail industry, and this will serve to reduce the cost of these products and services. So, contrary to the idea that the competition between privately owned business serves to make products and services cheaper and more convenient for the consumer, they can't begin to compete against the efficiency or the convenience provided by the AEM's Egalitarian society even though the retail, second-hand, and advertising industries will shrink considerably, as will the costs of supplying these services. 

Once upon a time, if you needed two screws, you would buy two screws, but now you have to buy a packet of 20 or 50 screws. So, even if screws are now cheaper than ever before, the consumer is forced to consume more than he/she needs and therefore, the consumer is forced to pay more than he/she needs to. This common strategy is widespread within our capitalist society, particularly for cheap items, and it is promoted by privately owned manufacturers, wholesalers, and retailers in the quest for bigger profits. It is also not discouraged by capitalist governments in the quest for more sales tax. This also occurs in the spare parts industry. For example, you might only need a new gasket for your carburettor, which may cost less than $5, but you will often be forced to buy a carburettor kit, which may cost $80 or more. In the AEM's Egalitarian society, we will return to the idea that if you only need two screws or a gasket, you will only need to buy two screws or a gasket, and so the consumer will pay less, and once again, we save on material and human resources. Also, consider the Saturday's newspaper. You may only want the news and the real estate section, but you have to buy the whole paper because privately owned newspaper companies are primarily selling advertising. In the AEM's Egalitarian society, you only buy the sections you want, thereby saving on human resources and tons of paper everyday, and the newspaper will also be relatively free of advertising.   

As you know, advertising and marketing cost a fortune and ultimately, consumers are paying for it over and above the cost of the product or service they purchase. In the AEM's Egalitarian society, there is almost no advertising, which means that prices for many products will be cheaper. 

Also, executive officers of companies, particularly big companies usually receive very high salaries, which once again the consumer is paying for. In an Egalitarian society, executive officers receive the same wage as everybody else, which means that prices will be cheaper.

When privately owned businesses reduce the costs of products and services, this is often not achieved because the privately owned businesses have developed more efficient methods of production, and is instead often achieved by.... 

  • producing poorer quality products or services (which is not always a bad thing, but usually it means that the consumer is the loser. Producing poor quality products is highly associated with our consumer based society, so that it may be cheaper to buy, but it will need to be replaced more often, thereby creating more consumers of the product over the longer term. Therefore, it will cost the consumer more over the longer term. In the AEM's Egalitarian society, we usually make things to last, as part of the process of getting more value from our resources.),  
  • moving the production side of the company to third world countries (which reduces employment within Australia, while it exploits impoverished people who have little choice but to work for next to nothing in order to survive, particularly when the introduction of industry or agriculture has made it impossible to return to their earlier subsistence way of life.), 
  • using (under-valued) non-renewable materials to make mass production easier (thereby valuing cheaper prices higher than the unnecessary consumption of non-renewable resources, which is another reason why mines are being mined faster than ever. In the world of competitive capitalist business, if one doesn't do this, one's rivals will. As such, privately owned businesses are often economically forced to do the irresponsible thing in order to survive within the competitive environment).  
  • neglecting safety procedures and maintenance, or 
  • cutting corners (In the AEM's Egalitarian society, businesses never need to cut corners to reduce prices or to increase profits because the state is financing all production, materials, construction, etc, and therefore consumers can always be sure that products and services are up to standard, and the desire for businesses to increase profits will no longer be an issue.). 

Suppose there were two businessmen who each owned a coffee plantation. One owner treated his workers as slaves and paid them in just enough food to live on, while the other owner gave his workers food and a wage and provided reasonably endurable working conditions, but this meant that he didn't make as much profit as the slave driver did. As such, the slave driver made more money faster and was able to expand his plantation long before the humane plantation owner could afford to, which implies that slave drivers will always tend to out compete their more humane competitors. This suggests that the competition between businesses will tend to disadvantage the workers. And this indicates that success within the marketplace is often not based upon who has produced more efficient means of production, or who is a better employer, or who is cleverer, but upon who is more ruthless with their employees, and this is the trend that has originally shaped our capitalist culture. However, workers' unions have helped solve this social problem to a fair extent, but the creators of our democratic-capitalist constitution never imagined that workers should be allowed to unite together and withdraw their labour through strike action, and many of our contemporary businesspeople and politicians still don't think that they should be allowed to. And this is another reason why many manufacturers have moved their production to poorer countries where there are no workers' unions.    

Retail outlets often sell various products and services, not because they are the best value for money, but because they will receive bonuses, or higher profits by doing so. That is, privately owned companies have learnt that if they target the economic interests of the retailer, the retailer doesn't mind selling inferior or dearer products and services to the consumer.   

Certain privately owned businesses did not begin, or do not exist within a (very) competitive environment (e.g. banks, telephone companies, television and other media companies, electricity suppliers), and consequently, prices begin to rise, and collusion becomes much easier to organise. Often, poor competition occurs because such companies, particularly high tech companies, cost millions to set up. Such businesses stand to make huge profits, but because only the rich can afford them, it is another reason why the competition between privately owned businesses favours wealthy people and companies. Other times, this shortage of competition is deliberately created by government policy in conflict with the idea of competition in the marketplace. As such, there are number of other rationalisations (which we won't go into here) that are proffered to explain why competition in the marketplace is not always such a good idea. Such businesses are often required to pay the government huge sums of money for a license or a lease if they win the right to operate. This means once again, that the elite have far more ability to own these types of high income generating businesses.   

We will discuss some other problems that capitalism and the competition between privately owned businesses create later. 

Technological Advances

The other main argument for why the private ownership of businesses (and the incentive of wealth) is said to be beneficial for the society is that the competition between privately owned businesses (and individuals) to get rich inspires technological advances and the further improvement of products and services. This argument may be true in relation to dictatorships, who have been known to deliberately kept their citizens uneducated and ignorant, which served to inhibit technological development, but not so in relation to Egalitarianism. That is, within the AEM's Egalitarian society, the Head of State, the members of government, and their families are required to live under the same conditions as everyone else does. Therefore, they are just as motivated as everyone else to encourage technological developments and improvements in products and services. Also, WWII was responsible for the greatest growth in technological development that we have ever seen. This did not occur because we had a spat of geniuses at the time, or because people were seduced by wealth, or because there was competition between privately owned companies. It occurred because the government was persuaded by war to invest its money into finding solutions to its defense problems. The appropriate people who were chosen to do this task, were not companies or company owners, and they did not do it for money, but for their country. This suggests that if a government is prepared to finance research and development (R&D), technology advances, and it may also advance faster than when financed by privately owned businesses. And perhaps when people perceive that they are working for their country, rather than for the interests of their employers, people may be more motivated to go that extra mile.    

Also, competition to perform well within R&D will always remain high within the AEM's Egalitarian society because, like now, there will be many more people wanting to work in R&D occupations than we have positions for. The AEM also realises that we need to view Australia as a big company that is in competition with other companies. Therefore, the AEM is committed to R&D, and we expect that R&D will increase in most industries due to the fact that there will be little resistance about financing it when individuals are no longer able to keep the surplus for themselves.

There is also a strong evidence to believe that capitalism and the competition between privately owned businesses serves to inhibit advances in technology in a number of ways.

  • Privately owned businesses aren't usually very interested in developing technologies that aren't going to make lots of money. Consequently, many technological advances derived through R&D that could (eventually) be of great benefit to sectors of the society don't get off the ground. Consequently, R&D tends to mainly occur in industries that supply products and services to mass markets or to consumers that can afford to pay extremely high prices. In fact, in industries where there is little economic incentive for privately owned businesses to undertake R&D, governments and private individuals (via charity) have to supply the funds required, which indicates that the competition between privately owned businesses only works (badly) when there is money to be made, and not when there is only social benefit to be gained.
  • Currently, R&D involves risking one's own money, and many privately owned companies, particularly smaller ones, are not prepared to have their profits consumed on something so uncertain. As such, it is left up to those who can afford to risk large sums of money, which not only advantages wealthier companies, it also serves to reduce the amount of R&D undertaken. Similarly, we see products and ideas that were initially developed in Australia by private individuals, governments, or research units such as the CSIRO going off-shore because our own privately owned businesses did not have enough money or guts the risk on these new technological developments. In the AEM's Egalitarian society, this lost income to oversees companies will no longer occur because the state will usually have the resources to see any socially beneficial idea through to fruition. Further, in the AEM's Egalitarian society there will still be a competitive environment for many different businesses that produce similar and alternative products or services.
  • We have all heard about how oil companies buy the patents for engines that don't rely on oil products so that they can continue making billions of dollars selling oil products, thus inhibiting major technological advances. Regardless of whether or not this is true, it is never the less good business and legal to do so, which suggests that such practices may be occurring.
  • Our recent history indicates that if there is money to risk in order to do R&D, most privately owned companies that don't face stiff competition, or that compete against companies that supply similar products or services at similar prices, don't do R&D. This was the situation in Australia when manufactures were protected by import tariffs, which allowed them to compete against international suppliers to the Australian marketplace. This practice also served to make us a very uncompetitive exporter of manufactured goods. Eventually, the Hawke government offered businesses economic incentives by way of tax deductions of 100 to 150 per cent of the money spent on R&D, and this started to increase R&D in Australia and it also improved our export market. However, by offering these tax deductions, the government, or rather we who pay taxes, were really the ones who were/are funding this R&D because privately owned businesses were not prepared to risk their own money. And even though tax payers paid for this R&D, we don't have any share in the profits generated by R&D. And if a democratic-capitalist government can manage to fund R&D, the government of an Egalitarian society will certainly be able to, and it will do it without any individual paying anything for it.
  • Because we live in a social environment where everybody and each company needs to fend for themselves to survive economically, and because ideas are commodities that can help one to survive and get ahead, it is wise to keep one's good ideas to one's self lest they be stolen. And if the good idea has no commercial value, but plenty of social value, there is nobody we can ring up and say "Hey, I have got a great idea," to. Consequently, there are probably thousands of good ideas and facts out there, include technological advances, that have not yet seen the light of day, and thousands more that have died with their creators because unfortunately, most of us never find themselves with enough time or money to develop our ideas. In an Egalitarian society, where one cannot get ahead economically because one has good ideas, and where one can gain more control over one's career by having good ideas, the need to keep ideas that are economically or socially beneficial for the society to one's self, disappear. Also, in the AEM's Egalitarian society, the state is always there to hear your ideas, and the society will be the winner for it. Also, everybody is allowed and able to encourage support for their ideas, even when the state is not interested in them.
  • Privately owned businesses and their workers can be made redundant by new technologies, and therefore both groups often become motivated to unite together to resist and discredit the introduction of improved technology, thereby slowing down the pace of technological development within the society. In the AEM's Egalitarian society, it is always the state's responsibility to find alternative work for redundant workers, and this solves both of these social problems (i.e. the creation of unemployment and the slowing down of technological development).  
  • Because R&D can cost millions, most individuals and small privately owned companies do not have the economic capacity to be involved in R&D. This means that once again big companies (i.e. the rich) are advantaged by leaving R&D up to privately owned companies to undertake, thereby allowing big companies to control and monopolize the introduction of many new products and technologies, which is once again used to rip off the consumer. And this also serves to reduce the amount of R&D that is undertaken within the country. 

Other Problems Created by the Competition Between Privately Owned Businesses
As you know, a large percentage of new privately owned businesses go bankrupt within the first few years, often leaving the owners of privately owned businesses broke and disqualified from starting another business for several years. It also creates unemployment. Consequently, the ever-present danger of bankruptcy and the need to reduce staff to remain competitive makes everybody's employment far more precarious. Of course, well-established big companies may also become bankrupt, often leaving shareholders bitter and broke, and many more people out of work. This common reason for unemployment occurs because of the inflexibility of the capitalist system. That is, most workers can only be committed to one employer at a time, which means that their economic and vocational security is tied to the one employer, come what may. These situations are never ending social problems within capitalist societies. In the AEM's Egalitarian society, when a business is not seen to be economical, it doesn't mean that anybody will go broke or become unemployed. As mentioned, it will always be the Egalitarian state's responsibility to relocate workers into other jobs, and moving workers between different jobs will be a common feature of the AEM's Egalitarian workplace making it extremely flexible (See our 'Multi-Occupations' section of our 'A More Humanised Workplace' web page for more details). To give you an example, a few years ago in Australia and other places, airline companies were struggling to survive within this very competitive industry, and some didn't make it causing hundreds of staff to be laid off and left to solve their own unemployment problems. In the AEM's Egalitarian society, the idea of our airline business going bankrupt is inappropriate. Domestically, we are not vulnerable to the continuous process of reducing the prices of airfares to remain competitive, and we instead set our prices in accordance to what the business costs to run. Should the industry shrink or expand, workers are relocated in order to cater to these changes.

Improved technology is supposed to be associated with an easier life for everybody. But in our capitalist society, it often spells disaster for many working people because technological development often serves to make workers redundant (and so too for the skills they possess). So, this gain for consumers and the owners of private businesses is a loss for employees. That is, while the society desires technological development, the society takes little responsibility for the individuals that become vocationally displaced by technological development. We callously use these workers while we need them, and then we toss them aside to solve their own unemployment problems when we no longer need them. This is another unending problem of our capitalist system. 

Debt, and the social problems created by it are also nurtured by capitalism. Credit is something that is designed to allow people to buy what they cannot yet afford, and this serves to create more consumers and therefore, bigger profits. For the privately owned businesses that provide credit, it is a way of making money without actually doing anything. That is, it is making money from money. If it were not for the goal of increasing wealth, nobody would provide credit. On the other hand, many people can't get credit, and many people can't afford to pay a deposit for expensive items, and this leads to further social disadvantages. In the AEM's Egalitarian society, there is no credit system and nobody will need it, except for those people who wish t buy their own home, which will be more expensive than renting. Expensive products such as houses and cars, which most people cannot currently afford to buy unless credit is made available, will instead be rented as you use them (i.e. there will be no private ownership of such products), and this means that nobody will go without such products unless they choose to. Further, the rent one pays on their home will work out to be far less than it costs to buy a house in the capitalist society because the price of the home is paid for by several generations of tenants. Incidentally, the AEM doesn't approve of governments borrowing money either, especially from oversees lenders. See our 'The AEM's Egalitarian Economy' to find out why the AEM's Egalitarian government will never need to borrow money from international lenders. 

In capitalist societies, everybody doesn't work for the state. As such, to a large extent, employment, and thus unemployment is created by privately owned businesses in conjunction with government policies regarding employment and unemployment. Unfortunately however, privately owned companies and even the government are also advantaged by there being unemployed people because this serves to keep wages and inflation down. Also, it would appear that almost all privately owned businesses refuse to employ long-term unemployed people. In fact, many employers won't even hire someone who is without a stable work history, or who is new to the occupation. However, the government, and the majority of citizens and employers it panders to, refuse to accept this, and instead blame all long-term unemployed for remaining unemployed. Consequently, the government sends the long-term unemployed to employment agencies (who also often don't put their long-term unemployed clients forward for any of the jobs that they have listed with their company, because they wish to maintain their credibility as being a reliable source of reliable employees) to help them hone their job-seeking skills. Unfortunately, their job-seeking skills are not usually the problem. It is not what they are doing: it is what they have done (i.e. they've been a long-term unemployed person) that is the reason for why nobody will employ them. Ex-prisoners and aborigines also face the same employment problems, and so do many people who have developed injuries and who now need to find new types of employment. In the AEM's Egalitarian society, if you want a job, we'll find you one regardless of your employment history, aboriginality, criminal background, or injuries because the Egalitarian government takes full responsibility for employment rather than let it be regulated by the interests of privately owned businesses.

More and more privately owned businesses are providing short-term work contracts, which serves to produce periods of unemployment for many people when these contracts end. In the AEM's Egalitarian society, we may often place people in jobs for short-terms, but we will also take responsibility for relocating these people in other jobs without placing them on unemployment benefits and without putting them through the stress and uncertainty of having to find another job.  

Once upon a time, most companies trained their own staff, which served to benefit the society and create a more nurturing family atmosphere within the workplace, and this served to encourage the development of socially functional, emotionally well-balanced individuals and an appreciation for their social environment. But because the more successful privately owned companies became successful by not using their resources to train employees, other companies needed to do the same if the wished to remain competitive. Now, it is more often up to the individual to pay for qualifications and this serves to favour people with more money, and it also makes it harder to change occupations. In the AEM's Egalitarian society, there will be a swing back to on the job training, and vocational training and education will be free. Therefore, if we need to limit the amount of people to be trained or educated (which will almost definitely be the case), selection will not be based upon who has enough money.   

Currently, our capitalist world is dominated by the advertising and marketing of privately owned businesses in an attempt to seduce the consumer. For example,

  • On commercial television, you can expect 3 minutes of advertising for every 10 minutes of programming. 
  • On commercial radio, you can expect to hear several ads between each song.
  • Downloading many web pages takes much longer because you are also downloading the advertising that is on each web page.  
  • Much of the Internet is dominated by advertising web pages. 
  • Newspapers and magazines often have more advertising than content.
  • Advertising is dropped into thousands of letterboxes each day.
  • Telemarketers are constantly ringing you to sell you something. 
  • Billboards visually pollute our cities and highways.
  • Displays in shop windows continually entice you to buy products and services. 
  • Elaborate packaging seduces the buyer and to make the product appear to be of higher quality.
  • Marketing people wait for you in shopping centres to sign you up. 
  • Even news items and current affairs programs advertise products while pretending they are informing the public about something important. 

In the AEM's Egalitarian society, there is virtually no advertising or marketing, and this not only rids our society of all those things listed above, it also saves the country a fortune (once more) in human resources, material resources (e.g. paper, ink, energy), time (e.g. downloading time, on-air time), and space (e.g. land, shop area). 

Because people are left to economically fend for themselves, in an attempt to protect their livelihood, they tend resist any move by the government to downsize or close down industries that are socially or environmentally damaging (e.g. land clearing). 

There will always be an economic conflict of interests between employers and employees and therefore, industrial disputes, and the stresses associated with them, will continue to be a feature of the capitalist society. 

More so than for wholly owned businesses, the function of businesses that are listed on the stock market is to increase the price of shares, which usually means increasing profits. As such, in spite of the ideal of distributing the wealth between more people and small time investors, public companies are usually more ruthless than wholly owned companies, and are therefore an even bigger contributor to the social problems that are created by the competition between privately owned businesses. Consider banks for example. Banks make huge profits, but they continue to add and increase charges, or reduce services because the CEOs of banks are charged with the responsibility of increasing share prices, which means that the society in general is not better off even though the public can partly own such companies. Buying shares is also just another way for individuals to make money from money (i.e. without doing anything or providing social benefit). Buying shares is also a form of gambling, and many companies also buy shares with their profits in an attempt to increase profits further. But as is the nature of gambling, it doesn't always pay off, and as we keep seeing, billions of dollars can be lost, and some companies can go bankrupt because of these bad investments, which ultimately the shareholder pays for while the CEOs and other company executives still receive their outlandish salaries.      

In many areas of business, it is a normal practice of privately owned businesses to provide economic incentives to consultants so that they advise people to buy a particular company's products or services. As such, consultants are no longer acting as impartial advisers, and therefore consumers are not necessarily buying the best buy. For example, pharmaceutical companies offer economic incentives to doctors so that they will subscribe the medicines of that particular company. Investment advisers advise investors to buy shares in companies that pay investment advisers to do so. A similar situation exists within the music industry. That is, many commercial radio stations do not play records that are not produced by the major record companies (which should be illegal because it an anti-competitive practice), and therefore consumers of music are not hearing the full range of music products that are available, and many performers are unable to survive economically without signing a record contract from one of the major record companies. We also see talkback radio hosts continually forgetting to inform listeners that they are being paid to promote certain companies when they give their opinions about these companies, which has sparked off several 'cash for comments' investigations. In the capitalist society, these things will always occur, while in the AEM's Egalitarian society they will never occur.      

One particular group of privately owned businesses are media companies, and media companies are extremely powerful within the society because for most people they are the primary means of finding out what is going on within the society. However, in spite of their claims to the contrary, media companies (and other publishers) have their own political agendas, and the media decides for itself whose ideas, accusations, or complaints will be heard or ignored. And this also influences whose ideas, accusations, or complaints the government and companies will respond to. This is why you rarely hear about Egalitarianism, or many other ideas or complaints because the people who own media companies do not want the public to know about them, even though we tend to believe that we live in country where we have freedom of speech and perceive ourselves to be politically aware because of the freedom of the press (which apparently also means the freedom of the press to ignore what they want). And if the public doesn't know about them, the public can't begin to consider them or support them. That is, privately owned media companies create suppression, and this suppression is created by the self-interests of those elite who own media (and publishing) companies, and this problem is made worse by the small number of media companies within Australia. Further, because the media is so powerful, they can harass governments on any issue they want, and they can give the impression that there are a lot more people supporting a particular issue than there really are. Media companies also chase ratings because high rating programs seduce more businesses to advertise during these programs. And nothing improves ratings more than highly emotive issues (which is why they often make mountains out of mole hills, and persist with reporting about a particular issue, use any excuse to display images such as the towers of the World Trade Centre collapsing). As you know, sexual images are also a proven winner in drawing audiences to programs and advertisements. In the AEM's Egalitarian society, we intend to provide programs that allow most viewpoints within society to be heard. We are also not interested in improving ratings to seduce businesses to advertise in the media (as there will rarely be advertising of products or services), which means that we have no reason to continually display sexual themes and sensationalise stories within the mainstream media.     

There are also the social problems that we are regularly informed about in our nightly news and particularly current affairs programs, and which we can continue to expect more of if we continue with capitalism because individuals, the owners of businesses and their ambitious mangers, can make or save money by doing so. For example, a few years ago, you may remember that Pan, a pharmaceutical company had been charged with substituting ingredients and using substandard safety procedures. More common stories include shoddy builders, pensioners (and other people) being ripped of by investment scams, unsubstantiated cures for health problems, insurance companies withholding payouts, and workers being unfairly sacked. The world of business (and politics) is a lot like the National Rugby League (NRL). In the game of professional rugby league, we see someone breaking the rules in almost every tackle and play of the ball (e.g. holding down the head, neck, or throat of the tackled played, hands all over the ball, head locks, second tackling, attempted racking of the ball, holding onto the legs to slow down or upset the play of the ball), but only a fraction of these misdemeanors brings about a penalty, which is why they keep occurring. And when a penalty is given, it is not harsh enough to deter players from trying it on again because when the illegal behaviour brings about a change in the possession of the ball, a try, or a win, it makes it all worthwhile. And besides, the other side is doing it too. Often this occurs because the referees and linesmen can't see everything that occurs on the field, but usually it is just accepted if it doesn't upset the play of the game (too much). In business, there is also a constant stream of cheating going on in order to be a winner in the money making game (e.g. insider trading, concealing information, confidence artists, corporate crime, substandard workplace practices, tax evasion, lying, various types of property crime, charging customers for work that wasn't done, not paying bills or insurance payouts, industrial spying, infringing copyright, using company money to pay for one's personal expenses, overcharging, misleading consumers, not confirming to regulations, collusion, blackmail, stand-over tactics, and many more). Often this occurs because the authorities have no evidence, but unless someone takes, or threatens to take legal action, nothing usually happens. And when businesspeople are found guilty of a crime, or are required to pay compensation, the punishment is not harsh enough to deter businesspeople from trying it on again, especially when it pays off far more often to do so. So, just as our role models in football shape the cheating that children will try when they play football, so too do our role models in business inform all the people and children that you don't become a winner by playing fair. This is the culture of capitalism, which is hardly surprising since capitalism was created by cheats. 

And all that we have just discussed about football and business is also the same for politics. Consider how the "children overboard" claims were used to win the federal election, and how John Howard declared at the beginning of his term as Prime Minister that they would not sell off Telstra or that they would not introduce a GST (good and services tax) in order to win public support to win the election. And opposition parties are not backward in accusing the government of fudging the figures because it has occurred many times before, and new governments, upon having access to financial information, often declare that the economic situation is not as good as the previous government had led everybody to believe it was. We could go on forever about the cheating that goes on in politics, and most of these problems are associated with the ideal of democratically elected governments, which we discuss on our 'The Democratic and Undemocratic Nature of the AEM's Egalitarian Society' web page. Cheating or bending the rules is also true for people who work the stockmarket. Rene Rivkin just recently stated on the ABC's program, 'Enough Rope', that he reckons that everyone tries to cheat in the stockmarket trade through insider trading (i.e. to acquire inside information about what companies are planning to do so that one can make money buying or selling shares in that company). And whether we are talking about the competition between privately owned business, politics, or trading on the stock market, the successful cheat will always out compete the honest player, and this cheating will never end as long as we force and encourage everybody to be responsible for their own economic status within an economically stratified society. And so endemic is this cheating that most of us have become so desensitised to it that we hardly raise an eyebrow over it, and instead we praise ourselves for creating such a civilized culture and constitution. Such cheating may have been around forever because it is the product of economic stratification, which is also a form of cheating, but this anarchy can be stopped by reaching Egalitarianism. Egalitarianism takes away the economic incentives to cheat, and in doing so, the society becomes far more honest and more community minded, rather than self-interested, and the culture will flourish because of it. 

Another thing that is said to improve with the competition between privately owned businesses is customer service. However, big businesses and businesses without much competition, have worked out long ago that customer service costs money. Consequently, it seems that the more dependent the consumers are, or the smaller the competition, the worse customer service is likely to be. And because smaller businesses have to economically compete against big businesses to survive, smaller businesses now need to reduce their level of customer service to remain competitive. Consequently, the standard of customer service in many industries is forever diminishing, and there is very little that the small-time isolated individual consumer can do about it. Here, we are not going to discuss all the different types of diminished customer services that are created within the capitalist society, such as telephone answering machines, waiting on telephone queues, waiting on queues in the supermarket, or paying for customer service as with banks. However, we would like to mention that because the Head of State and all members of government within the AEM's Egalitarian society have to put up with the same level of customer service that everybody else does, they will be just as motivated as you are to ensure that customer service is kept to a high standard.

The Social Problems Associated with the Marketplace Determining the Economic Success or Failure of Privately Owned Businesses
It is not always such a good idea that businesses supply products or services that consumers are prepared to pay for. Of course, this is already known and governments often prevent the sale of products or services because they are seen to be dangerous for individuals or the society, socially unacceptable, addictive, too loud, too polluting, etc. With these exceptions, privately owned businesses are allowed to supply any good or service that consumers are prepared to buy, and governments won't interfere. Generally, privately owned businesses are not concerned about what is socially responsible unless there is money in it, and so they are forever pushing these boundaries in the never-ending quest for profits. But because governments in our democratic-capitalist society generate revenue (i.e. taxes) via the sale of goods and services, they are often also motivated to ignore these criteria for the restriction of goods and services if there is revenue to be gained. As such, they are part of the problem and they also encourage privately owned businesses to supply these products, and giving the voters what they want to buy is also good for the government. For example, in many countries around the world (including our own until a few years ago), many citizens have developed the desire to own guns (and/or other weapons), or the fear of being without a gun, to the point that it is now almost impossible to rid these societies of guns, and extremely difficult to persuade people to give up their right to own guns. And this is a problem if guns have become a problem, and because the private ownership of guns was seen as problem here in Australia, the government was highly pressured to introduce strict gun laws that prevent most citizens from owning guns. Originally however, the sale of guns served to generate tax, which made the government of the day very happy, even though most guns were not seen to provide any social benefit. In other words, what is economically beneficial for one government may be a social problem for a later government to deal with. Further, the destruction of guns require compensation, and the restriction on the sale of guns means lost revenue forever more, which tends to motivate governments to resist doing the socially responsible thing (thereby allowing the problem to become worse) until public pressure becomes too strong to ignore. As we have seen with guns, heroin, and tobacco, criminalising the supply of, or radically increasing the tax to deter the sale of such goods and services does not stop the consumption of these products and services once the consumer base has become established. And in the case of addictive drugs, people suddenly become criminals or socially unacceptable overnight. So, just because there is a market and taxes generated for the sale of certain goods and services, it doesn't mean that it sensible to sell them. The fact is that we consumers are a very self-interested group of people, and if our self-interests conflict with what is the socially, ecologically, or environmentally sensible to do, we usually pander to our own self-interests. And, in an attempt to make profits or stay in business, privately owned businesses are also motivated to ignore social, ecological, and environmental problems in order to pander to the self-interests of the consumer. For example, currently, governments all around the world are trying to reduce the outpouring of greenhouse gases into the atmosphere in an attempt to reduce the hole in the ozone layer. However, consumers didn't want to pay extra for anti-emission equipment to be installed in their vehicles, and so privately owned vehicle manufacturers didn't install them until the government made it compulsory for all new cars. The manufactures of air conditioners and aerosol sprays also didn't stop using PFC's in their products until government legislation forced them to not produce what the consumer preferred to buy. As environmentally unfriendly as land clearing is, it still continues because consumers and privately owned businesses care more about what consumers want than they do for what is environmentally friendly. So ultimately, the practice of allowing privately owned businesses to pander to the desires of consumers underwrites our environmental and ecological problems. Land clearing also still continues because governments care more about gaining revenue via income and sales tax than they do for what is environmentally friendly, unless they think they may lose the next election by not doing anything about it. 

Unfortunately, poor people are poor consumers and therefore, they are poor generators of goods and services tax (GST). Consequently the middle and upper classes shape our culture by their consumption patterns, especially when these consumers can also afford to bare higher profit margins per unit. And privately owned businesses learnt thousands of years ago that especially amongst the affluent, or within more affluent societies, there is big money to made by targeting the insecurities, desires, vanity, and fantasies of consumers, rather than by targeting their needs. In relation to the ratio between profits Vs effort and/or expenses, there is probably more money to be made in supplying such things as cosmetics, fashion, pornography, slimming tablets, cosmetic surgery, novels, movies, music, jewelry, or hair products than there is in supplying food crops, housing, meat, water, or education. In the AEM's Egalitarian society, we are not about to take away all these more frivolous goods and services that you have become accustomed to (even though this would not be a tragedy), but we won't be encouraging the consumption of these things either, which is what is occurring now through constant advertising and marketing and through the nature of the consumer based society. Through the various mediums of advertising and marketing, consumers' social fears, desires, vanity, insecurities, and fantasies are easily excited and manipulated in order to sell goods and services that they don't really need, which is another reason why advertising and marketing is so prevalent within our culture. People become dissatisfied with what they are, or what they own, or what they do for fun when they weren't dissatisfied before. And in an attempt to make bigger profits and to create more revenue, businesses and governments have no incentive to limit or regulate this type of egocentric consumption (or most other types of consumption), which means that we can buy as much of anything we can afford to, whenever we want to. As such, most individuals within our society are becoming more and more egocentric, which continually serves to raise the bar on what products and services are perceived as normal to consume. This will never end as long as people continue to develop insecurities and fantasies about how they are perceived by other people.    

One is not likely to become wealthy unless one supplies products or services that are made for the mass market or the elite market. Consequently, many smaller and poor consumer groups are not catered to very well by privately owned businesses. Similarly, consumers in rural areas are often neglected because they are smaller marketplaces with higher overheads, and as such rural communities struggle to maintain such services as banking and finance services, telecommunications services, and the whole range of retail outlets.   

Even though recycling is now seen as a desirable goal in that it is more environmentally friendly and reduces the usage of renewable and non-renewable resources, recycling has been slow in being undertaken by privately owned businesses because products made from recycled materials are usually not as cheap to buy as products made from non-recycled (i.e. virgin) materials. That is, because the economic success of businesses are measured by their success within the marketplace, once again the economic interests of the consumer have become more important than the environment or the wastage of renewable and non-renewable resources.

Because privately owned businesses are continually struggling to survive and to increase profits, they often attempt to generate business that isn't required or isn't best for the consumer. For example, people in the repair business are renowned for advising people to repair or replace things that don't necessarily need to be repaired or replaced in order to create business. As such, the consumer is not better off, and resources are being wasted. Doctors also can often omit to inform patients about highly successful non-medical treatments for their health problems, or they may resist referring patients to specialists as a means of keeping the consumers' money coming their way, even though the medical treatments they subscribe are not as successful and may require many more visits to the doctor. Once again, in the AEM's Egalitarian society there will no longer be any incentive to do this sort of thing when one cannot make more money by doing so.

Unfortunately, the marketplace works for both legal and illegal commodities, and people can also become very wealthy by pandering to a mass black-market (e.g. drugs, alcohol, tobacco, weapons, stolen goods).

Other Reasons Why the Competition Between Privately Owned Businesses is Designed to Favour the Wealthy

If everybody started out economically equal in life, and the ownership of businesses was available to anybody who dared to risk their savings, there might be some validity (or rather, less invalidity) associated with being able to keep the profits of one's business, but this is not the case for a number of reasons. First, the private ownership of businesses began in societies where people already possessed a lot more wealth than other people, and therefore had much more ability to start a business and more money to take chances with. In fact, the elites who created the capitalist constitution became elites because they were already the private owners of businesses or land within the earlier monarchical/feudal society, and were therefore in the best position to exploit this head start. That is, it was a way for the existing elite within the feudal system to transfer and improve their elitism within the new capitalist system, which is why they liked it, and which is why the private ownership of businesses served to immediately economically disadvantage the majority of citizens. Second, because we also have continued with the invalid concept of inheritance, we still do not out economically equal, and therefore the heirs of old and new money hold a much greater ability to start a business or to take over the ownership of businesses. As such, the descendants of the rich continue to economically dominate the descendants of the poor. Third, people on higher wages are able to accumulate more wealth than people on lower wages (which we will discuss the invalidity of, in Part 3), which in turn serves to allow these people a greater ability to own a business. If all three of these reasons for why people have more wealth, and therefore more ability to start a business, are the product of corruption (which we claim they are), even if the private ownership of businesses is valid (which it isn't), it has been corrupted from the outset, and is used to keep the rich rich, and the poor poor (regardless of whether or not some people manage to overcome these disadvantages).  

Contrary the ideal of fair-trading, the competition between privately owned businesses is hardly fair. Just as wealthy individuals are advantaged within the society compared to poor individuals, so too are wealthy or big companies advantaged within the marketplace compared to small companies. This is one of the reasons why companies try to become bigger and it is the only reason why companies merge. For example, bigger companies generate more buying power, which means that they can bulk buy and therefore purchase their supplies at cheaper prices. This means that they can sell their products and services at cheaper prices than smaller companies can, and not because they have supplied a better product or service, or because they have developed more efficient means of production. Therefore, the marketplace tends to create a society that is dominated by big business. And this means that it is very difficult to start a competitive business unless one can start big, and the only people who can do this are the wealthy. Also, many of us can predict what the mass market wants, but not everybody has the economic ability to provide it. 

You might suggest that little people can be shareholders and therefore they can also be a benefactor of big business, although less than 10% of the population own shares. However, one can only buy as many shares as one can afford, and because the wealthy can afford more shares, they will always be economically advantaged by anybody being able to buy shares. Further, small-time share buyers don't usually buy shares from businesses that are just starting out because of the higher risk involved, and therefore companies that are trying to start out big (in order to be competitive) can't rely upon investments from little people.  

As you know, advertising and marketing works extremely well, but it usually costs a fortune, particularly in those mediums that reach large numbers of the public such as television and radio broadcasting. Because every business would advertise on television if they could, this demand serves to raise the price of advertising within the marketplace, particularly when our governments deliberately restrict the supply of television stations that are allowed to operate. As such, big companies can afford to advertise (or advertise more often) within these advertising mediums, which serves to economically advantage big companies once again, regardless of whether or not they supply superior products or services, or cheaper prices for consumers. 

This discussion continues in Part 3.

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