At a recent philosophy discussion group gathering the departing question from one member was ‘Can you imagine life without Capitalism?’
The question has stayed with me, churned over in my brain time and again.
To begin we need to determine what Capitalism really is and how it has come to dominate just about every aspect of Western life.
Capitalism is defined as ‘an economic system in which private actors own and control property in accord with their interests, and demand and supply freely set prices in markets in a way that can serve the best interests of society. The essential feature of capitalism is the motive to make a profit.’
That definition is broad, covering the term property as meaning land and the means of production. Capital can also be interpreted and the ownership of shares in an enterprise and with compulsory superannuation, that means that anyone who has a superannuation account is part of the ownership of capital.
Living today in a western culture, Capitalism surrounds us, we are part of it. It seems we cannot escape it. I am retired, living of pensions, both government and a superannuation pension. These pensions require that our economy keeps working, things keep getting made and consumers keep consuming them. The superannuation pension is dependent of the fund owning shares in the system, owning shares in the means of production, so even in retirement I am dependent on capitalism for my continued survival.
As an employee, continued employment is dependent on the employer to trade profitably, whether that be in production such as farming or manufacturing, retailing or in the multitude of service industries. Profit means survival.
Profit is a dividend to the owners of capital, whether it is the farmer selling his produce to market or the local cafe owner able to pay their bills for rent, consumables and wages and have a bit left for themselves. The employee becomes a major cost to the employer and yet, the employee is also a consumer of the products and services provided by capitalism.
During feudal times and in the early days of colonisation, workers were not paid but either lived a subsistence life, growing their own food and raising limited livestock. Slaves were owned by the capitalist but needed to be clothed, fed and housed.
During the Industrial Revolution wages were set at a subsistence level just enough to pay a bit of rent and buy a morsel of food so the employee had enough energy to look over the spinning and weaving tasks. If they didn’t show up at work, there were enough unemployed to fill the position. Workers costs were minimised to ensure greatest profits.
I guess for employees, there were some halcyon days, but over the passage of time, for but a very short time. The post war industrial boom after WWII saw economies grow, workers’ wages grow and workers enter the Middle Class, where home ownership became a norm, where labour saving devices became essentials, washing machines, refrigerators, furniture and furnishings, home entertainment such as HiFi, TV, and the need for two incomes to keep consumption growing, not just one car for the family but two, and as the children grew up, one for each driver in the family.
Increasingly since the mid 1980’s the owners of capital have demanded increased profits. The Thatcher and Reagan governments in the UK and USA led the charge with a trickle-down economic theory, that if the people at the top of the income pyramid, those who had invested their capital in various businesses and enterprises made lots of money, the money would somehow trickle down so that everyone benefitted from their wellbeing. Since that time, we have seen the number of billionaires grow exponentially.
Australia, under the Hawke/Keating governments fell in line and the Howard government followed suit.
The means of redistributing that wealth was compromised with taxation systems which favoured the wealthiest but since the demand for taxation revenue continued to rise, the burden was placed on those with the least, the introduction of Value Added Tax (VAT) and in Australia the Goods and Services Tax (GST) meant that consumption was taxed. Those on the lowest incomes spend most of their wages almost immediately on essential goods such as food, clothing, and so proportionately pay the most in that tax system.
In many respects, the halcyon days of yore are gone, finished. The wealthiest have built protections to secure and insure their wealth with favourable taxation regimes and with the willingness to pay (tax deductible) accountant fees are able to minimise their tax burdens while influencing governments to assist in various programmes to aid business, tax concessions on trade and work vehicles, salary sacrificing plans for new and other benefits not usually available to minimum wage earners, over funding of private schools while under funding government schools and so the list grows. Those with the most are favoured through various forms of government largess through taxpayer funds from the ones the wealth should be trickling down to are forced to pay through the PAYE taxation system and GST collection.
Was it ever otherwise?
I guess the most obvious answer is to look at pre–Colonial Australia where indigenous peoples lived communal lives sourcing the needs for survival from the environment they lived in, sharing the bounty as it occurred, collectively seeking out the next bounty to satisfy upcoming needs. There was no profit motive, there was just the cycle of life to continue.
But we cannot wind back the clock, and I don’t really think we would want to live without Capitalism, but we could, or should that be should find a way to spread the wealth of this nation so that poverty can be seriously addressed, that the housing crisis with he ensuing high rents and almost impossible hurdle for first home buyers to enter that market, and the flow on effects of poverty, drug and alcohol problems, gambling addiction and the sense of valueless which leads to the violence which is so apparent today.
We see people who are privileged suing for defamation, blocking up court time over miffed egos while the poor are criminalised for being poor but cannot afford the expense of proper representation for their legal struggles.
There are very good reasons that Capitalism works, the lives we live or aspire to live depends on that system designed to create and satisfy the demand for goods and services. But we have to make it work for all of us, not just those who allow the off penny to trickle down to those near the bottom.
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