Is Capitalism OBSOLETE?

 

Is Capitalism OBSOLETE?

Capitalism traditional definition:

“Capitalism is an economic and social system in which capital and land, the non-labor factors of production (also known as the means of production), are privately owned; labor, goods and resources are traded in markets; and profit, after taxes, is distributed to the owners or invested in new business ventures.”

In pure capitalism government has no role except to regulate according to the laws protecting society; laws that mainly have to do with the environment, worker safety and some consumer protections around product safety.

Adam Smith says in his book “Wealth of Nations” that for a free market to work there must be many small suppliers insuring competition, innovation and low prices to consumers.

When one company controls a market, according to Smith, bad things happen.  Because there is no completion the company can raise prices, inhibit innovation and control options to the public.

In fact Smith hated the idea of large corporations.  He knew as we all have seen that they fight to eliminate all competition through merger, acquisition and price wars.  Once they establish market control they do everything Smith warned about.

The other issue is the LITTLE BROTHER of monopoly – oligopoly. 

“Oligopoly is defined as an economic condition where there are so FEW suppliers that one supplier’s action can have significant impact on prices and competitors.”

In America today all of our major markets are controlled by monopolies and oligopolies.

In the traditional sense THERE IS NO FREE MARKET in America.  Adam Smith is spinning in his grave when he see Intel (90% market share), Microsoft (90% market share), Google, Yahoo and MSN (90% market share), B of A, Wells, CitiGroup and JP Morgan (70% of all loans), Shell, Exxon/Mobile, Chevron, ARCO (80% of gas sales) and the story goes on. 

In fact on a regional basis all industries are controlled by a monopoly or oligopoly.  Healthcare is the worst because they control through sales to large corporations who buy for tens of thousands of consumers.  When this happens consumers can’t look for good deals.  In fact ask your doctor for his price list for the service he provides.  You will not get one.  How can there be competition when doctors will not tell you what they charge for their services?

The other real problem is no matter how much the “for profit” corporations complain about government every single one wants laws protecting their interests and we have provided them with these non-competitive advantages. 

We taxpayers also give hundreds of billions in support to these huge corporations through tax benefits that a new competitor can’t get.  Oil and gas the most profitable industry gets huge tax benefits from you and I; we pick-up the tab for their exploration and for the depletion of their wells.

There is no pure capitalism in America – PERIOD.  Those Republican nut-jobs on the right who say otherwise are stupid or lying or both.   

So the US economic system is a group of markets controlled by monopoly and oligopoly that over charges the public and provides exclusive guaranteed profits to a few companies. 

One of the major reasons for the collapse of the economy was a few large Wall Street banks run by CROOKS destroyed everything by their greed.  In fact the taxpayers saved them because they are protected from true market conditions by government bailouts. 

Keep in mind this started with the conservative Republicans Bush/Chaney and their crew of crooks.  The entire bailout was engineered by Henry Paulson, CEO Goldman Sachs, working with just two people, Geithner and Bernanke.

My brother says in 2050 there will be just 10 huge corporations running everything; one Oil company, one Insurance company, one Computer company and one Car company, one Media Company and so on.

So is capitalism obsolete and should we look for some other system that better provides goods and services to the public at a fair price where there is real completion?