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What is Capitalism?

by on December 20, 2011

In these days of upheaval and transition it is more important than ever to have a clear understanding of what we are talking about. The opposition is very skilled in playing with language and creating holes in linguistic concepts, blurring our vision of reality.

A good example is ‘inflation’. Many people nowadays seem to think that inflation means ‘rising prices’. However, inflation means a growing money supply.

Because of this misunderstanding you often read things like ‘inflation dangers because of rising oil prices’. A totally ridiculous statement without any economic relevance, but understandable when one realizes how our language is being willfully corrupted.

It is useful to realize, that such ‘evolutions’ of meaning are no accident. Galbraith noticed that ‘the study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it’. And to evade truth about money and economics, a lot of lies are purposefully introduced in the public discourse.

Capitalism as a concept is another case in point. I don’t think there is a generally accepted definition on capitalism that we can use as a reference. Which is strange in itself, since it is universally used as a name for our economic ‘system’.

Most people believe capitalism is associated with ‘free markets’. And most people agree that most of the Western World lives in a capitalist society, although many will say that these economies have been ‘socialized’ too much to be considered really capitalist.

I agree that we want to call the current system Capitalism. After all, it is our current system we are talking about and want to reform. However, the notion that Capitalism is associated with ‘free markets’ strikes me as very odd indeed. Because we can easily ascertain that in this world there are no free markets. Every major industry in the world, be it Big Pharma, Energy, Food, Telecommunications & IT, Aviation, Weapons, Automotive Industry, is run by a small number of gigantic Transnationals. These Transnationals only compete nominally. They divide the market between them, control the watchdogs intended to supervise them, set the rules of the game, cooperate in keeping the market between them and to keep prices high. They operate as cartels.

The situation is aggravated by the fact that all these cartels are actually proxies of the money power that controls them.

So the real situation is that our so called ‘free markets’ are basically one gigantic Money Power controlled Trust.

The idea that we live in a ‘free market’ economy is simply another Orwellian thought control operation, comparable to the ‘Freedom is Slavery’ and ‘War is Peace’ slogans.

Big Brother likes his slogans and he has many of them. And why shouldn’t he? They are very effective.

Defining Capitalism

So there is no generally accepted definition of capitalism and the idea that capitalism is in some way related to free markets does not withstand critical examination.

So let me propose my definition:

“Capitalism is an economic system where Capital dominates Labor through control of the money supply.”

Money being a medium of exchange by agreement. Capital and Labor being the Factors of Production.

Surely this is not a definition that everybody will immediately accept, so I will elaborate a little.

To begin with,we should consider that (as one capitalist once put it) “Capital, if it is to co-operate untrammeled, must be free to establish a monopoly of industry and trade.”.

Marx also analyzed that Capitalism tends to monopoly.

So, domination of Labor by Capital will express itself by monopolies and Capital’s natural tendency is toward monopoly. We have already established that the major industries seem to behave like cartels. The reason these transnationals have not organized themselves in outright monopolies is Standard Oil: Americans got fed up with monopolies, so the Capitalists had to settle for cartels, which is only slightly less efficient when you control the market.

Many others have pointed out that Capitalism and Communism share this monopolistic tendency. Communism, after all, is also a monopoly. In the hands of the State (we will forget about the poor proletariat……). The question is then, who owns the State and it has been established without a doubt that Capital financed the communist revolutions and controlled the Communist States. One only has to think of Averell Harriman running the Stalin war effort to get the picture.

Communism is therefore not Capitalism’s antithesis, but merely a subset. Actually it is a more direct expression of Capitalism than our current system.

By this analysis we have established that Capital is indeed in control in the production process.

Means of control

In our system, and throughout modern history, Capital has been controlling labor through the control of the money supply.

The money supply is used for control first by keeping money scarce, and second by making money as expensive as possible.

By keeping the medium of exchange scarce, there is always unemployment, forcing Labor to accept detrimental conditions.

But how can we say money is scarce? Isn’t the world awash in cash? Yes, but every dollar is a debt to the bank. And these debts have to repaid. This in itself is not a problem, the problem is, that we need to pay interest over these debts. And there is simply not enough money to pay off the debts plus the interest.

Unemployment has been shown to be an unbeatable plague in Western societies for centuries. For the simple reason that by keeping money scarce economies never can function at their full production capacity. During the Gold Standard economies were chronically depressed and the proliferate printing of debt money did nothing to alleviate the situation.

Not only is money scarce through interest, it is excruciatingly expensive. The poorest 80% of the western populace pay trillions in interest per year to the richest 10% (the next richest 10% pay as much interest as they receive).

The reason for this is, that producers pass on ‘capital costs’ they incur to consumers. People don’t realize that up to 45% of prices they pay are for capital costs. So even when you don’t owe any debts, you still lose up to 45% of your income to interest.

In these ways, by controlling the money supply, Capital is insured to be the bottleneck in production, leading to its supremacy.

When you know the problem, the solution is usually easy

Our Masters are very adept in pitting us against each other by controlling the flow of idea’s and language. They let us play with concepts we don’t understand and which they define and invent. ‘Capitalism’, ‘Communism’, ‘Inflation’, ‘Free Markets’, all these concepts have been shown to be misunderstood.

These misunderstandings lead to bad analysis and even worse solutions.

Nowadays we say ‘Free Markets’ have failed. As if there are any. Because of the problem we are discussing, people are now actually believing that we need to more  ‘supervise’ these ‘Free Markets’. Whereas our current system has shown without a doubt that regulators are usually simply doing the bidding of the industries they are supposed to keep in check.

We can also be led to believe that since these ‘Free Markets’ operate globally, we need global solutions. Which of course is the Capitalist’s coveted World Governance.

Now that we can see that Capitalism’s defining nature is simply Capital being the bottleneck in Production, we know the solution must be to make Labor the bottleneck. Labor should be the scarce factor of production.

A Free Market economy, with sufficient money circulating to let Labor become the scarce Factor of Production. An economy with an interest free money supply and the availability of interest free credit would facilitate this.

I don’t believe that great monopolies will survive for long if many people and organizations gain access to all markets, access which is now inhibited due to lack of finance. If you have ever worked for a big company or any other bureaucracy, you will quickly realize that these organizations are so inefficient that they can never survive the competition of small, agile firms.

The only reason they are successful now is that they are being financed by the Money Trust and normal people are not.

Capitalism IS slavery. Because Labor are the many and Capital is controlled by the few. Capitalism in its favored form, Communism, has shown us everything we need to know about allowing them to establish their World Government.

At this critical point in History we, as a people, finally need to get the monetary issue under control. The clamor for Gold as currency is understandable, considering the negative experience with fractional reserve (central) banking. But there is another school of thought that we need to consider before making a well informed decision.

Let’s study Thomas Greco, Charles Eisenstein, Dick Eastman, Hank Monrobey, Ellen Brown, Margrit Kennedy, Mike Montagne and Bernard Lietaer.

Economics can be a Sacred Science once more.

  1. Sam permalink

    Problem #1: Business can operate because they can borrow startup money from banks. Banks have money because people deposit/pool their money there. So you are proposing Banks lend money taking the risk of loss and don’t charge anyone any interest. Ok, then when Banks loose let’s say 10% of lent money to businesses that failed, would you be ok that when next time you try to get our money out of the bank they will give you 10% less then what you put in? I’d like you see your face when casher will tell you one day – oh sorry, that 5K that you deposited last time – we lost it – the business we lent it to failed – better luck next time – please come again.

    Problem #2 Now you say scarcity of money is a problem – if there was only an abundance of money all would be well. Do you understand that money simply represents the total value of all purchasable goods out there. That means if you double money supply, while amount of goods remains the same – you simply doubled the cost of each good (i.e. caused 2x inflation).

    … don’t stop educating yourself just yet

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