Thursday, November 21, 2019

Capitalism: The God That Failed

Karl Marx was right about the demise of capitalism, but he was wrong about the way in which the demise will happen. He believed that capitalism will face its mortal crisis because all the means of production will be cornered by the capitalist class who, in their lust for improving their profits, will strip the masses of their wealth. The competition between the capitalists will force the nation’s small businesses into bankruptcy and reduce the number of capitalists at the top. Imagine a situation where a single textile factory is producing garments for the entire nation—the owners will get fabulously rich, but no one else will. In such a system, the capitalists must take measures to defend their property and profits, but rest of the nation will hate them. Marx hoped that eventually the proletariat would rise in a violent rebellion the capitalists.

The flaw in Marx’s theory of demise of capitalism is that he didn’t foresee that capitalism is built on socialistic principles. Big government is part and parcel of capitalism; if there is reduction in the size of the government, the capitalist economy will stop functioning. The history of capitalism in the 19th and 20th centuries is by itself a proof that capitalism is essentially a big government phenomena—instead of the capitalists taking control of everything, the government grabs a major chunk of the political as well as economic power. The growth of the economy in a capitalist nation is always directly proportional to the size of its government.

As the government grows bigger, it consumes more and more resources—the big capitalists are able to protect their wealth by becoming crony-capitalists and aligning their own business interests with the government’s political interests. The burden of paying taxes falls on the small businesses, middle class, and the poor class. This leads to a massive disparity in income—the rich keep getting richer while the poor get poorer. The pro-capitalism intellectuals talk about minimum government but a minimum government is not possible in capitalism. The big capitalists need big government to keep the small businesses, middle class, and the poor class in control. Without a system for controlling the population, the big capitalists won’t be able to function. Therefore, in a capitalist economy, the size of the government has to keep growing till the nation goes bust.

There are several other problems in capitalism that I can talk about; for instance, the rise of nihilism in capitalist nations, the capitalist lust for establishing a worldwide free-market utopia, destruction of small communities and guilds. But those topics are beyond the scope of my short article, which I will end by noting that—like communism, capitalism is the god that failed.

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