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Capitalism. It is what the United States was built on. It has become an integrated part of our lives. In this day of age you can no longer escape its grasp. Yet with all of this contact with capitalism, many people still don't know the basics behind this economic system. First, capitalism is based on the idea of private property. Everything belongs to someone. This allows people to own the means of production. What this leads to is someone owning every facet of production of a product. But in order to produce, you need people. This is wherelabor comes in. You must hire people to make your product. You pay these workers some salary. You then have some options on how to sell your product. You can sell to a middleman at a certain price above your costs to make the product. Then that middleman can take your product to market and sell it at an even higher price then what they paid for it; this causes the price of the product to have been raised twice since its first inception. You can pracically have an infinite amount of middlemen; you make all of your money off of the first one. You could also skip the middleman and take your product to market on your own. This allows you to make more off of your product, bu then you have more to deal with when you do this. So you now have a product that you have sold at a higher price than it cost for you to make in the marketplace. What does this mean? Two things. One is that you have hopefully met your only goal of making money. The other is that you have devalued your workers. They have gone out and produced a product that they personally can not afford. Think of it this way; it is impossible under capitalism for a worker to buy back everything he produces since the price has been increased since the product was made by you, the worker. So this means that there is going to be a gap between what the worker can afford and what is in the marketplace. This leads to supply and demand. What this means is that there is going to be a surplus of products in the marketplace. So there is sometimes going to be more supply of a product than the public demands. This leads to prices dropping for this product. This leads to less profit for the producer, meaning that he has to produce more to make more, which does not work since he already has too much product out there in the first place. So his only other option is to make the product cheaper to appeal to the consumer, and this is when jobs are cut. Now people don't have jobs, so there are now less consumers to buy the sagging product. So then the company goes under. Now sometimes a company will not have enough supply to meet the demand, so they raise the price to make more profit knowing they can get away with it. This allows them make more. What they can do is not raise the price but produce more. Either way they make more than the other guy and continue to work to put the other person out of business. It is all just a big cycle. You just hope you are on a good cycle. There are some significant negatives the plague capitalism. One is that the way capitalism is set up there is always going to be too much product and not enough money from the workers to spend on those products. This will always lead to more supply and demand and lead to a loss of jobs. This is all very bad. Another problem with capitalism is that it promotes this tendency to do anything it takes to eliminate your competition. So it supports taking drastic, and not necessarily nice, tactics to eliminate your competition. This leads to huge comglomerates producing all products and eliminating competition. This is so bad that the United States government has set up laws to keep this from happening. We are not living in a pure capitalistic society. Another big problem with capitalism is its inherent need to exploit people. This means the American dream of everyone becoming rich is a complete facade. Capitalism dictates that you must exploit workers for labor. Even if the whole world used mechanized production, you are still going to have someone below you since the entire point of capitalism is to make money. This means you still try to cut out the competition. In a twisted way the American dream is a cry for Communism since being equal for all is a basic idea behind Communism. This may all seem very negative, and it is. But then why do we still follow this system if it has so many inherent flaws? One is tradition. The world has been using this system for ages and people don't like change. Another is that it is working at the moment. People often are scared of change, so they stay with what works; and capitalism seems to work.
Just for your personal interest; some feminists believe capitalism is to blame for the suppression of women. They say that women are the largest undervalued workforce in the world. Considering how much time and effort women put into running the home they are being abused by this system. And it promotes it since capitalism wants products and services at the cheapest cost possible; and you can't beat free. So some feminists, often called radical Communist feminists, are calling for the end of capitalism so that women won't be abused by this system. They want to obviously put Communism in capitalism's place since Communism promotes equality, regardless of sex. |