One of the things I like about Medium is that is allows non-professional writers to publish their opinions on various topics. The problem with this format is that it allows people with little background or knowledge of a topic to pontificate as if they were informed. And many at this site, including this sad piece, contend that they are TEACHIONG us something about which we are misinformed.
I don't question the intention of the writer. I don't doubt that he did at least some research, although citing Karl Marx as a source on what Capitalism is does not generate confidence in the writer's research. He says he is not a socialist, but almost everything being said in this article could be found in Das Kapital. He should stick to something he knows about. This is not it. "A satisfied public is one that doesn’t spend"? That should tell you something.
I've written another critique of Michael Busler attempting to educate everyone about socialism. This treatise is supposedly about capitalism, but suffers from the same absolutism as in Busler's article, but in reverse. Yet the author proceeds to "teach" us about what capitalism really is.
No, what he describes is NOT capitalism, or, more accurately, he describes certain types of capitalist industries and their behavior, and points out many of the problems with monopoly capitalism. But his contention that his descriptions of the excesses DEFINES capitalism is hubris.
Capitalism is nothing more than the private ownership of the means of production (and distribution). Capitalism is a broad term, and describes many systems, from perfect competition such as mom-and-pop stores, to the multinational mega-corporation, and even describes most utility companies.
For this author, people "developing goods and trading services on the open market" is not capitalism and he is flat wrong. The local coffee hut has purchased the equipment, bought or rents the building, and makes regular purchases of raw materials. These are his capital, and he combines it with labor to make your latte. The gardener's truck you are stuck in traffic behind is the gardener's capital, along with the tools he has in the back. The blacksmith in the middle ages who owned his own shop and tools was a capitalist. There are millions of small capitalist enterprises like this all over the country, and they are every bit as capitalist as Amazon.
The author is also wrong about capitalism and innovation. If you want to understand innovation under capitalism, simply think about electronic consumer goods. The innovation in that field has come from intense competition in a capitalist market. And somehow we are not innovative in our drug development because of capitalism. Yet lifespans are longer now (although declining in the US). Most of the most important innovations in our world have happened from capitalism, other than what we learn in space.
What the author is complaining about is the monopoly version of capitalism that dominates the world and in particular the US today. What many people don't understand is that in a perfectly competitive market, companies don't set the price, and long-run profits are zero. Profits don't become an issue until a company manages to achieve market power, often referred to as monopoly power, when it can set the price so as to maximize profit. Yes, this is capitalism also. So to define capitalism by its excesses and problems is like saying that monster truck is an automobile, but that Smart Car is not.
Capitalism has shown itself to be the most efficient means of producing goods and services for a society. BUT. Capitalism, as we have developed it, fails miserably in two major ways: the distribution of the rewards, and the externalizing of many costs. The big problem with capitalism is that we have turned a blind eye while companies merge, big ones swallow small ones, others buy up competitors to increase their monopoly control, and we have reduced or eliminated so many regulations and rules that big companies have achieved an almost "free market". Note that the term "free market" does not mean an open competitive market - it has evolved to mean lack of government involvement. The problem with pharmaceuticals is directly due to the monopoly structure of the industry. We have allowed an obscene level of concentration and monopoly control to take over the economy. This not only creates excess levels of profits (or extracting value as the author states), and distributes those gains to a smaller and smaller group of owners. It also produces excess undemocratic power in the political sphere, and allows companies to shirk responsibilities such as controlling pollution.
Capitalism, per se, is not the problem in our world. It is what we have allowed it to evolve into. You see the excesses of predatory capitalist companies like Walmart, but we can't dismiss that one of its competitors, COSTCO, pays its employees good wages and benefits. We don't have to throw out capitalism to get a better world, but we need to take major actions to transform it and make it work its best. We need to break up monopolistic industries, prohibit hiding money in offshore accounts, strongly increase government involvement in many industries, change corporate operating rules, require companies to cover their total costs, drastically reduce the wage gap between execs and line workers, alter the tax structures, and finally, eliminate corporate lobbyists and donations. We can make capitalism into something totally different than the description in this article. It just takes political will.
