Strengths and Flaws of Capitalism

     This is certainly not an exhaustive list of the good and bad points about a capitalist economy. But it is a good place to start.

STRENGTHS OF CAPITALISM:

1. Lower Cost Products
     The strive to create an acceptable product at an affordable price to compete with other service providers/manufacturers helps to keep the cost of products low. "Today the world obtains commodities of excellent quality at prices which even the preceding generation would have deemed incredible. In the commercial world...the poor enjoy what the rich could not before afford." (Andrew Carnegie, The Gospel of Wealth, 1889.)

2. Material Accumulation
     There is a kind of personal empowerment which comes from material accumulation. Even the meagerly paid wage-worker is proud of his dented car or old house. He worked for those things, paid for them out of his own pocket and doesn't owe anyone anything for these things. No one has a claim on these things and their control or destruction is totally based upon his decision.
     On a related note, the amount of wealth which we are able to accumulate from our efforts gives us a measure of accomplishment. Many people use wealth as a measure of their success by comparing their material wealth with those around them.
     "The price which society pays for the law of competition...is great; but the advantages of this law are also greater still than its cost - for it is to this law that we owe our wonderful material development, which brings improved conditions in its train." (Andrew Carnegie, The Gospel of Wealth, 1889.)

3. Variety
     Because of the nature of competition, any person with an entrepreneurial spirit can make minor modifications to a product and market it as something new. That's why we have a dozen different brands of toilet paper whereas socialist-based economies only have one.

4. Better Distribution (When Profitable)
     Capitalism is controlled by supply and demand - where there is a strong demand for something, the product will make it there. You won't find any long lines waiting for bread in a capitalist society. In a socialist-based economy, a strong demand for a product in a certain area does not have the same motivational impact on suppliers because there is no profit-factor.

FLAWS OF CAPITALISM:

1. Waste, Waste, Waste
     Let me give you two examples that just "make my blood boil". Texans periodically get to see flames shooting into the sky near oil drills. This is the natural gas being wasted, all of that potential fuel being discarded like garbage because it is too costly to refine and distribute to make a decent profit.
     And of course we are all familiar with farms forced to leave food in the fields to rot because overproduction would decrease their profits. When we are in a world with masses dying from starvation, such a sight should enrage any caring person.

2. Hinderance to True Advancement
     I have two words for you...light bulbs. Did you know that a light bulb has been invented that very rarely needs replaced. And did you know the owner of the patent is also a manufacturer of light bulbs. Don't expect these bulbs to ever show up in the market.
     And if there were a car that never needed replacing or repairing...do you honestly think it would be produced in a capitalist society? There would be no profit in it, even though it would advance mankind tremendously. And what about the car that runs on power-cells? This car is an electric car that runs on hydrogen and its only pollutant is water. No fossil fuels required. You can be assured that this project has the full support of the oil industry :).
     And if there were precious resources on the moon, we'd have a base there by now. The point is, there is a negative side to the profit factor.

3. Environmental Destruction
     I want you to ask yourself why we are not using recycled paper. There is a greater supply of post-consummer paper than there is demand for slightly more expensive recycled paper. Because recycled paper is difficult to mass produce, it is more expensive to produce because each unit has to share a higher percentage of the fixed costs of production. So, instead of doing what is ecologically prudent, we continue to ravage our forests and send our post-consummer resources to the landfill to take up room that could be used for true wastes.
     And what about air and water pollution? If pollution-controls did not adversely affect profits, we know that industries would automatically comply. I do not wish to present manufacturers as the "spawn of Satan", but the bottom line is that protecting the environment is a liability in a capitalist-like system.
     Environmental issues are just one example of how a capitalist-like market can force us to make the wrong choices.

4. A Society of Wage Slaves
     To keep prices low, and to compete, management must prey upon labor, keeping wages low, automating jobs out of existence, and exporting jobs to other nations which still have slave-wage labor. This leads to poor products from disgruntled labor who realize that management only cares about their output, not their humanity. I realize that corporations have to do such things to "stay in business" in a capitalist-like society, but that still does not justify the human costs.
     People deserve more from a full-time job than just the necessities of survival. And, in many places in America, even having a full-time job does not guarantee the essentials. Some homeless people DO have jobs, but one cannot survive on a single, minimum-wage job.
     A person who makes the effort to contribute to a society should be truly rewarded for that effort. Every worker should have a certain percentage of their wages that can be considered "expendible". They should also have the time to do things they want to do; people who "live for the weekend" are only enjoying 2/7 of their life. If we were to efficiently allocate our labor resources, there would be no need for people to spend so much of their life working/preparing for work.

5. Growing Inequality in Income/Wealth
     "Between 1978 and 1987, the poorest fifth of American families became 8% poorer, and the richest fifth became 13% richer. That means the poorest fifth now have less than 5% of the nation's income, while the richest fifth have more than 40%...The American economy now exhibits a wider gap between rich and poor than it has at any other time since World War II." (Reich, Robert B. "Why The Rich Are Getting Richer and the Poor Poorer", The New Republic, May 1, 1989.)
     Reich gives a convincing argument that the reason for the vanishing middle class is because of economic changes...we are now living in a global economy. US workers now must compete with workers from "developing countries" who are willing to work for very little pay. Another way of saying this, is that the culprit is a capitalist economy.
     Of course, there is nothing wrong with being economically rewarded for hard work or service, and very few want an equal distribution of wealth. The problem is, how many of those in the top fifth honestly earned their money? Those who sit around playing with money all day, producing nothing of value, and yet becoming richer is not the idea behind reward for labor and innovation.
     Just what is the true gap between the value of someone's efforts? Is there EVER a situation where someone should earn in a day what it takes someone else a year to earn? Is there truly that much of a gap in the value of the services the two hypothetical people provide?

6. Wealthy Have More Political Power
     Ross Perot is single-handedly trying to form a third political party.
     "At least a third of all senators are millionaires...More than 50 House members are millionaires." (Davidson, Roger H. and Walter J. Oleszek. Congress and Its Members. 1994. p 122.)
     For several thousand dollars, you can have lunch with the leaders of one of the political parties and "rub elbows" with the representatives.
     Any questions?

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