Capitalism

The capitalist paradox

Capitalism is an economic system where private parties own and control businesses to satisfy their personal needs and interests. The primary goal of capitalism to to make a profit. Another reality of capitalism is that citizens must have the means to engage in the economy. They must earn a decent wage so that they can purchase needs and wants: housing, food and clothing, cell phones, vacations, etc.

The paradox is that capitalism is destroyed by it’s primary goal! If all the wealth is concentrated within the wealthy, capitalism collapses.

Unfettered capitalism, coupled with corrupt governments who put corporate interests, their personal interests, and the interests of their wealthy friends ahead of public interest has resulted in the greatest concentration of wealth and the greatest wealth disparity since the middle ages.

Principles of a functioning society

  1. A society flourishes when the needs of its people are met.
  2. A robust and resilient society has diverse industries to stabilize the economy through ups and downs.
  3. A moral society supports all its members, and realizes that from time to time some members may need more support than others.
  4. A healthy economy functions on cash flow.

Corporate greed …

By their nature, corporations are psychopathic. The goal of a corporation is to generate profit. Corporations do this by exploiting workers, customers, and legislation.

A government that supports the people should keep corporations at arms length. This was the case up until the 1970s, where corporations and the wealthy paid reasonable taxes. During this period, the middle-class thrived. Families were able to live comfortably off one income: home, vehicles, education, etc.

  • in 1965, the CEO:worker salary ratio was an average of 20:1
  • governments had balanced budgets

In the early 1980s, corporations convinced government to adopt Trickle-Down economics. Corporations also “helped” government by drafting legislation — legislation that benefitted corporations.

  • corporate and wealth taxes fell
  • government debt exploded
  • governments privatized services for one-time revenue

Trickle-Down economics incentivized corporations and the wealthy to hoard money.

  • corporations they paid their workers less, so there was more money for executives and shareholders
  • product quality decreased, but the price of products increased — people had to replace products more often, which created more profit for corporations

Now in 2020

  • the CEO:worker salary ratio is an average of 320:1
  • the middle class has been decimated
  • families barely survive with two incomes
  • few people can afford a vehicle, much less a home

Corporate taxes …

Taxing corporations does not generate government revenue.

Taxing corporations gives them a choice: pay taxes to the government or invest money in their company. The only logical choice is to invest money into their company — this way the corporation can stay competitive, with higher wages to retain and attract employees and research and development to produce quality products. The result is a win-win-win for the company, their employees, and the public.

Corporations are only good in society when there is competition.

Corporate welfare …

Time and again, government money has gone to corporations with little oversight — corporate welfare — and then quietly (or publicly) given out as executive bonuses. Loans are quietly forgotten.

The hypocrisy is that the same corporate executives who quietly beg government for corporate welfare publicly decry societal welfare. No more. If a company is not competitive, it should be allowed to die so that up and coming companies have room to expand. This sparks innovation and makes Alberta a stronger, vibrant, cutting edge province.

Corporate competition …

Corporations only seriously consider their employees, customers, and products when there is competition.

  • In a monopoly, corporations increase profits by raising prices, decreasing quality, decreasing services, lowering wages, and having fewer employees
  • In a competitive market, corporations increase profits by developing quality products and selling them at reasonable prices to attract and retain customers. They pay reasonable wages to retain quality employees.

Obviously from this, corporations prefer monopolies, but monopolies do not benefit society.

Complicit governments …

Governments have been complicit with concentrating wealth. It is not a coincidence that the reported wealth of Canada’s billionaires is comparable to the national debt. These people have removed billions and the government has had to borrow billions to maintain sufficient cash flow in the economy.

It is time for the wealthy to pay it back.

Promoting competition …

Competition drives innovation, supports fair wages, and keeps costs low.