Capitalism: the Unfairest System?

By R. Vincent Riccio

A Comprehensive Analysis of a Failed Economic Philosophy. The truths and fictions about Capitalism in the twenty-first century are explored and analyzed in detail with wit and humor from an accomplished author and experienced businessman. This treatise examines the many failures and bogus promises that Capitalism makes and tells us why it currently isn't working, why it has never worked, and why it won't work in the future. Comparisons are made with other economic philosophies and suggestions given for its overall improvement, pointing out that "The American Dream" can never be realized by any but a very few people as long as pure Capitalism is employed. A delightful and interesting read by a talented writer and internationally acclaimed author.

• Language: English
• Publisher: R. Vincent Riccio
• Release date: Oct 11, 2013
• ISBN: 9781301222940

R. Vincent Riccio

Author & Psychologist for over 25 years.

Book preview

C a p i t a l i s m :

The Unfairist System?

A Comprehensive Analysis of a

Failed Economic Philosophy

R. Vincent Riccio

Smashwords Edition

Copyright 2012 R. Vincent Riccio

Smashwords Edition, License Notes

This ebook is licensed for your personal enjoyment only. This ebook may not be re-sold or given away to other people. If you would like to share this book with another person, please purchase an additional copy for each person you share it with. If you're reading this book and did not purchase it, or it was not purchased for your use only, then you should return to Smashwords.com and purchase your own copy. Thank you for respecting the hard work of this author.

* N o n f i c t i o n S e r i e s *

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Topics

<1> Conceptualizing Capitalism

<2> Luck - The Cornerstone Of Capitalism

<3> Historical Overview

<4> Capitalism vs Other Economic Systems

<5> Capitalism, Economics, and Religion

<6> Capitalism and Scripture

<7> Capitalism and Morality

<8> Capitalism as a Philosophy

<9> Capitalism and the General Welfare

<10> Final Thoughts

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Chapter One

Conceptualizing Capitalism

Alright, there we are, right there in the title. I’ve hypothesized that Capitalism is not only an unfair system, but perhaps it is intrinsically designed as the unfairest system of them all. I know: in this country to propose such a thing is heresy, and a little earlier in our history could have gotten one locked up and ruined his or her life. No writer or politician, or anyone else, could suggest such a thing and escape from paying a serious penalty.

Yes, there are many truths about the benefits of Capitalist ideas, but there are also many myths we have heaped on this concept to make it appear as if it were virtually anointed by God; and there are some of us who actually believe that it was: that God or Christ or some other very holy and religious personage conferred this sacred idea and philosophy upon us to be followed or you wind up in hell! Unfortunately, none of that is true.

If anything was ever anointed by God, by Moses and Abraham and Buddha and Mohammed and Christ, and many other acknowledged spiritual people and holy people, it was Communism. I know, it sounds wicked, like I just said Let’s all praise the devil, have a ritual sacrifice, hallelujah! That’s not what I said. If you read all the good books. you will find a communal way of life prescribed along with lots of caring and loving of your friends, family, and neighbors. Nothing about work, profit being king, trickle -down economics, or lowering taxes on business to help them make a better world. In fact, all the spiritual books you will find advise exactly the opposite, which I will get into in detail later.

So, why have we been so obsessed with Capitalism being the way and the light of intelligent civilization? And anything else, Socialism, Communism, and so forth, being horribly wrong! Well, it begins with well-meaning people trying to find a way to build a better world: one where some dictator or royal does not whimsically control every fact of the individual’s life, which was common before the formation of the United States, and which came around the same time as the Industrial Revolution.

Once we had lots of brilliant and ambitious people making things, teaching things, and printing things, the masses decided, pretty much worldwide, that dictators and monarchies, or even oligarchies, were a bad way for society to develop. Enter: Capitalism! Capitalism said that the people were all individuals: nice. That they should all have the right to the benefits of their hard work: reasonable. That we would all have equality, every individual, all share a piece of this wonderful pie called success: fair and just.

The trouble with that scenario is the same trouble that every philosophy has: human beings! They become greedy, they love wealth, material things, having power, and especially being better than other people. It appears from history that this tendency goes back a long, long way. And that puts an arrow right in the heart of the Capitalist philosophy, and pretty much ever other one.

Read on, and you'll see the obvious reasons for its failure, reasons everyone should know, since we're standing hip deep in the lies which constitute that philosophy, but which people don't want to believe, even the smart ones. Oh, you don't have to be a rocket scientist, or a member of MENSA, to figure this out; you just have to open your eyes and use your own common sense. Common sense and intelligence: two things we have seen at an absolute minimum from our political leaders in the twenty-first century, while they hope and pray and proselytize that this philosophy called Capitalism will work. Hope does not pay the bills, and every additional day of the 21st century we are finding that out more and more.

In this country, and especially amongst all conservatives, and even a few of those Red Dog Democrats, that concept, that Capitalism is a hoax and can't work, is heresy. Major heresy. It is. in fact, considered un-American! And, of course, it follows that if you don't believe in Capitalism, you must believe in something that is far more dastardly and sinister. Of course. Doesn’t really matter what it is; Capitalists hate all of them.

Now, God forbid you should talk about Socialism, or even, Heaven help us, Communism, as any kind of viable alternative. Certainly our great American friend and patriot Senator Joseph McCarthy of Wisconsin could tell us a lot about the threat of the communist horror, if he were still alive. He had a lot to say about it back in the 1940's and ‘50's. The trouble is Communism isn’t any more horrible than Capitalism; it always depends on who’s running the show. There have been benevolent dictators who ran their countries far more fairly than our Capitalist supporters.

We all remember how terribly effective and proper McCarthy’s antics were back then. One's life could be completely wrecked for even mentioning the word: Communism. So much for Freedom of Speech; or Thought! We still have a certain contingent of those conservative folks existing today who don't completely understand the full concept of the First Amendment. They should read it over a few hundred more times. However, that's a subject for another discussion.

Certainly all isms have their flaws, and Capitalism is no exception. We can see the unfortunate results of Capitalism's influence as we moved into the 21st century. Not only has it hurt the economy of the United States, and countless millions of unsuspecting citizens, but we managed to ruin a few other countries' economies at the same time. Impressive!

Many people will look at what has happened to the early 21st century US economy and say that it is the result of the abuse of Capitalism, rather than of the essential Capitalistic concept itself. But, that is a naive and somewhat redundant statement. Capitalism, by its very nature, exploits the community: the common man, the hard-working individual, the core family, the consumer, in favor of profits for corporations and the wealthy. In essence, Capitalism fundamentally abuses the population it serves for it's own profit and benefit. People are not people, they’re consumers, employees, voters!

Oh, I know I'm going to get screams from any of those entrepreneur types, corporate managers, and high-flying business tycoons at that characterization. However, when you look up the term Capitalism in the various dictionaries and encyclopedias, they tell you that it's an economic system whereby private individuals or corporations own and control the methods of production and distribution of economic wealth. Sounds fairly greedy and unbalanced, just by definition. Inherently, the wealth of a country or state is hoarded and controlled by a few rich individuals or companies, and the rest of us, well, we punt! That was certainly the way Gordon Gekko described the process, and thought it was terrific!

We wait until the effects of those with abundance trickle down to the rest of us; yes, that's trickle-down economics, the absolute mantra of the United States' Republican Party, and so-called free market conservatives: let those with the brains, education, influence, and money do all those intelligent and sophisticated things that they do, reaping the profits, and the rest of us unfortunate loxes will get some of it eventually as they spend it. Well, thank you.

From the time we're in grammar school, it is pounded into our little heads that Capitalism is inherently the American way, the best way, the only way, the method for everyman to reach utopia! It gives everyone the opportunity to make it big, to have the great American Dream, to become anything that one wants. Wow. Lots of responsibility for one little ism! Tough to live up to all that. And in fact, it doesn't, as we can now plainly see from the empirical evidence in our country.

Let me return back to those who say it is the abuse of Capitalism that causes all the wrongs and ills we see. Let us analyze that for a minute. Exactly how was our Capitalism abused? Sure, there are those who break the law, or even shave the laws, in order to enhance their income and profit, as always; but you have those in any system, and such people are a constant everywhere. Those types of individuals are going to game and even abuse any system you put in place. Proper laws and oversight are what's necessary to protect the integrity of the system from people like that and thus protect the entire nation.

So, is it only the abuse of the system, lawbreakers, that cause the rather profligate problems of Capitalism? Is it solely illegalities that consolidate our nation's wealth within the hands of a few callous and greedy individuals? Not really. Again, crime is a multi-billion dollar business, no doubt; but that is always going to be the case. Having Big Brother watching over our shoulders every minute has been one proposal that everyone in the free world has pretty much discounted as a system we would wish to employ to solve that problem; it also ushers in host of its own totalitarian problems.

Orwell made the case against Big Brother pretty well in his book 1984 many years ago. The fact is, even if you took away all the crime, Capitalism, at its best, still consolidates most of a nation's wealth in the hands of a relatively few entities, whether they be individuals or corporations: not much difference between them since corporations are controlled by a few people, generally those who are wealthier and more powerful. It is that phenomenon which makes the playing field unequal, unbalanced, unfair, and unjust for all.

In such a system, even though there is the theoretical opportunity for all to make it big, in practical reality it is only a few that actually can and do. The Capitalist system itself is intrinsically weighted against too many (translate: a very few!) being at the top. You know, the all chiefs and no indians scenario cannot logically or logistically work! So, although the great American ideal is for all people to reach their dreams and make it to the top, that ideal is a pipe dream which cannot happen and would not work even if it could.

Nearly everyone would wish to be a boss at the top and get paid more than everyone else, especially those at the bottom. Except there would be no one at the bottom! That’s a problem. There would be no people to boss around or individuals to work and perform the many varied and menial tasks that are necessary for a nation or state or a company to operate. You need doctors and nurses, you also need carpenters and ditch diggers. You need engineers and architects, you also need landscapers and house painters. You need chefs and wait staff, administrators and secretaries, machine designers and machine operators, chemists and lab techs, ranchers and meat packers, clothing designers and clothing salespeople. You need farmers and you need pickers, judges and court stenographers, and on and on. You get the point. Everyone can't be at the top, or at least what we consider the top to be; in point of fact, only a very few can be there, since we need all those other people to be doing all those other things, important things, that keep business and the world moving forward.

Unfortunately, in our system of Capitalism, we pay some people enormously more than others, despite their objective inherent worth or general value. If some company believes a manager is worth a million dollars a year and more, that's what he or she gets paid, regardless of whether that individual is truly worth that much or not. After all, who decides? The company creates this gross imbalance because they want that person for the job, and nothing else matters; it’s business! They must fall into the belief that the person is worth it, after all, that's what they're paying that employee, so it must be true. By this mechanism, they set up the rules. The company will attempt to justify and rationalize its position in paying that much, advocating that their business will make more money and therefore the person has more responsibility. But is that really the case? Only rarely.

Does the Vice President of a billion dollar company with five thousand employees really have more responsibility than the Vice President of a smaller, fifty million dollar company with, say, a hundred employees? In our Capitalist society, the answer is yes! But if you analyze it more closely, you will see that the person in the large company can be, and often is, replaced rather easily with another recruit. There are lots of them out there, particularly ones who want to make that big salary with all those benefits. These top administrators in large companies also have heaps of help with other managers and executives equal to or beneath them. Conversely, in the smaller company, executive officers generally have many responsibilities other than administrative ones, since there are fewer executive people around, and they often become the chief cook and bottle-washer to boot! I know, I've been one myself a few times. Which means the top executives of smaller companies wind up with many other little jobs which they oversee, a good portion of them working in their companies doing more menial work, in addition to their executive and often financial responsibilities.

Many presidents and vice presidents of small companies do a great deal of secretarial and accounting work, in addition to managing their companies' overall progress. Many perform the actual work of their company, such as contractors, plumbers, builders, engineers, chefs, marina owners, computer hardware and software designers (e.g., Bill Gates and Steve Jobs), restaurant owners (e.g., Emeril Lagasse, Wolfgang Puck), and so forth. Are these people not worth more than those who only manage a small part of a company from their remotely located desks? They certainly do more, but they're not paid more because of the system we have in which big money rules, and begets more big money.

Now, those famous people I mentioned, like Bill Gates and Emeril Lagasse, they are examples of people who have done many things in their companies, particularly at their inception. They also have fairly large and affluent organizations behind them now because of their fame, so they are currently not typical of small business owners in that regard, not anymore. But they do serve as an obvious example of people who began small and did a great many things for their respective companies, when they were not making a ton of money, and ultimately wound up making it big. There are many other such people out there in their own companies who have similar positions, and do similar kinds of multi-faceted work, but do not make the large amounts of income as do those million-dollar-a-year Wall Street executives who have a much more limited scope of duties. That is my point.

It is not reasonable, or even logical, that a person who runs one small portion of a company, irrespective of how much that company earns overall, is paid more than a person who has so many other jobs in another, less affluent company. But that is what we have: Capitalism, at its finest. Big money is rewarded with more big money, and reason has nothing to do with it. Corporate managers, administrators, and executives will tell us that their million dollar a year officers are worth it, and will rationalize a host of creative reasons why this is so, but objectively, for the work they do, they're not. The fact that you will indeed find a few of these individuals that actually are worth the big money they receive here and there does not disprove the point that there are a great many of them who clearly are not. Even then, with those who are very talented and experienced, and are very important to the company, they are still not worth the millions of dollars a year that they are compensated.

The companies themselves have caused this inflationary trend by competing for people that they want to work for them, but there is no one who is indispensable and cannot be replaced by someone else, and for a lower salary; there are simply too many good people around! We have only to look at the US banking debacle of the late twentieth and early twenty-first centuries to learn this lesson with pristine clarity. The problem with all these highly paid executives and managers wasn't that they were all crooks, it was that they were doing their jobs badly, and for enormous salaries! We could have had other people in those jobs for a tenth of the salary performing just as badly! Then of course Congress decided to infuse the banking system with nearly a billion dollars to enable those incompetent, and in some case crooked, executives to receive more million dollar bonuses! Once again, Capitalism at its best, and most insane, not to mention being completely and incomprehensibly unfair.

Whether we want to admit it or not, the Capitalist system causes, and even promotes, situations exactly like this. And unfortunately, as we’ve seen, the system also protects itself so that we can't get rid of these sorry perpetrators fast enough.

We hear all the time that the most educated, the most talented, the most experienced are the ones who deserve, and receive, more income for their efforts than those with less. This is certainly true often enough not to make it a complete lie. However, each of us also know many people who are where they are because of who they know, being family, or simply dumb luck, and these positions were gained over, or irrespective of, people who were more talented, educated, and experienced than them.

Certainly these types of phenomena are not fair, but nothing will ever be perfectly fair, regardless of how we try to mandate it. In the political science fiction novel 2984, I attempt to make that very point in a futuristic society. Fairness, like justice, is an ideal, it is something we always shoot for as a goal, even knowing we can never fully attain it, and when we do, not for long. But fairness is surely a laudable goal to aim for, since we can become more fair, and, more importantly, ensure we do not become less fair. That is what courts exist for: they cannot address every evil or provide justice for every ill, but they do offer a forum to give us a chance at fairness, where we would otherwise have none.

That's what we have in America, a chance at fairness, a chance at greatness, a chance to live out our dream. That is the true American freedom, our heritage, our united dream as a country. But, as we know, and I earlier stated, that dream cannot be realized by all people, as unfair a concept as that might be. The very Capitalism we so often canonize is weighted against it.

So, what's the relevance here? Fairness. We are taught that this fairness, this justice, this opportunity for greatness and the achievement of the American dream, these things are all inculcated within our Capitalist system. But, are they really? What does the Capitalist phenomenon say? It says that it is a system whereby individuals or corporations control the production of wealth, including the products and the money that go along with it. They also, as a byproduct, reap the power and influence that they receive from having this wealth. That means only a small percentage of people will be able to obtain this wealth, power, and prestige compared to the total number of people in the population: this phenomenon is built into our system of Capitalism.

Recent statistics, tell us that the top 20 percent of the people own about 90 percent of the nation’s wealth. The top 1 percent alone owns over 35 percent. That means that ninety percent of the country owns about 10 percent of the nation’s wealth. Nuts, huh.