You obviously haven’t seen this quote on your iGoogle page:

“Capitalism is the astounding belief that the most wicked of men will do the most wicked of things for the greatest good of everyone” – John Maynard Keynes

Keynes was an economist.  Specifically, he was the economist, the one we blame for Keynesian economics, (adopted by the US to combat the great depression); something we’re seeing a bit more of these days. In the form of government bailouts.  Yes I know that’s not all there is to it.

He’s one of the people behind ‘capitalism’ as we know and love it today.  And he knew what he was talking about.

I like to use the following example borrowed from something called Game Theory, part of which describes how we act towards each other when resources are limited.

Consider a fishing community living on a large lake. The lake provides enough fish for the villagers, and some extra for them to sell and make a small profit.  However, the villagers are aware that if everyone keeps fishing as much as they like, soon there will be no fish, and that would be the worst possible outcome for everyone. Also, those who do not have the resources to catch a large number per day are disadvantaged right now.

So they agree to a quota: you are only allowed to take enough fish to feed your family, and as many again to sell, per day.  This sounds sensible, and if everyone abides by it the village will prosper.

However, people respond to incentives.  If everyone else is abiding by the rules, but I can break them and not get caught, my family will be more prosperous than the others.  So I break the rules.  But I’m not the only one this bright idea has occurred to.

If some people break the rules, others will be disadvantaged, and there will be an unequal sharing of wealth. The resource will also be depleted more rapidly.  If everyone breaks the rules, we’re back to square one, and soon everyone in the village will die or move off.  And if others are breaking the rules, there’s no incentive for me not to.

This is essentially what free-market Capitalism allows.  Of course, with regulation you can stop the scumbags from over-fishing the lake, but that becomes another problem.  How much freedom do you allow?

Now, I’m not a socialist.  I appreciate the finer things that my money can buy. But capitalism is not your friend. It exists by keeping the vast majority of the world’s population in economic bondage, through debt, as well as value and wage inequality.

If you have a professional or semi-professional degree, and a stable job with a good company, you are probably in the 97th percentile on the world income curve.  That means that 96% of the world earns less money than you. And unless you own large stretches of property in Dubai, and fly out on the weekends to play golf there, you probably aren’t in the 98th percentile. That’s how unequal it is.  It isn’t so obvious from this graphic (which is very old), but you get the idea.

World Income Distribution

Capitalism created this situation, and in my opinion it is impossible to fix without the drastic re-allocation of wealth, or the abolishment of debt-based currency altogether, neither of which are workable.  All of our money is created out of debt, or promises from the government.  The interest on this debt is repaid with your tax money.  It’s a very long route, but money created at the top, tends to stay at the top, with only debt trickling down.

(For information on a model for a resource-based economy instead, see The Venus Project)

The net effect of this is that we work our entire lives for companies which extract far more value from us than they return to us in the form of wages.  Think about it: if you make a product that is worth $10, and the company pays you $5 for your time $3 for materials and sells it for $10, who’s getting the better deal here?

Not you.  If you had the resources and ability you could make it for $3 and your time and sell it for $10, but you can’t. The company controls that power, so you have no choice but to sell your labour at a discount in return for a wage. You are creating more value than you are being paid for, unless you work for yourself.

This is the socialists’ gripe with capitalism, in a nutshell. On paper it is also a very valid argument. What confuses me are the numbers from the article ‘Quarter of People Say Capitalism Fatally Flawed‘ published on Reuters this morning.  Only a quarter? In fact, even more in the United States – even though the average American is in quite a lot of debt, and works a nine-to-five for less money than they’re ‘worth’.

Capitalism is not your friend.  It exists because people believe it is good for everyone to have free access to resources, if they have the money, which they can ‘earn’ through their hard work.  But that is the lie. It exists because of that last 2% of people. It exists because for every dollar you earn, they earn two, and they didn’t have to do any work for it.

Who are they?  They are the ones who have put themselves in a position to benefit from capitalism, not to serve it.  The ones who own the vast majority of the income-producing assets on the planet – and they could probably fit into a small town.

I’m not telling you to go out and get angry and protest outside the G20.  I’m telling you to have an informed opinion about how this money stuff works, because it is the leash used to control you.

If capitalism is only working for 2% of the population, and you’re not in it, why do you think it’s working?  Apparently 11-13% of those polled thought it was just fine, thanks. 27% thought it was fatally flawed and needed to be replaced, and the rest couldn’t give a shit.

This means that the vast majority of people support a system designed to control their lives and keep them from living to their full potential from the day they were born, to the day they die.  Retirement is no escape. As long as you need to think about where your next paycheck is coming from, you can never be free to pursue all that which makes you happy.

So tell me: why only a quarter?

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Norman Conquest