The Problem With Capitalism

Capitalism is the system of economics where people get a reward *just* for owning things.

If I own a field then I can work on that field and I own the produce from that field. This is the original sense of reward from ownership. However if I don't do any work then there is nothing to harvest and no reward.

Feudalism or Aristocracy pervert this logic. A Land Owner can let out his land to farmers who pay a rent. In Mediaeval times in UK this was 50% of the produce. Thus the Land Owner was rewarded for owning the land but without doing any work. This is Capitalism.

In UK the Land Owners were the Normans who conquered the country in 1066 and subjected the local population essentially to slavery. They built castles, violently repressed rebellions and stamped their authority on the land. Capitalism depends upon conquest to generate a ruling class of owners who live off the non-capitalists by rental cost.

We might argue why don't the peasants just go and farm on land that isn't owned. Very rapidly once rewards are set for ownership their is a battle for control of land and everything becomes owned. This is the major incentive for war. After war with no where else to farm, peasants are forced to rent land from the capitalists. In this sense while they are not in chains and are free to go where they like, in reality they have no choice but to rent land and work for capitalists as there is no other land, and so economically they are indistinguishable from slaves. Perhaps the only difference is that under slavery the slave owner is required to look after their slaves, and there is an incentive to do this well as slaves are expensive to replace. Under capitalism land owners do not look after their workforce which must fend for itself.

Often peasants accept the rule of land lords because in the wars that capitalism causes they need protection from attack by neighbouring groups. The best of a bad world is to pay your rent, avoid trouble from your Knight and let that Knight do the politics and fighting to stop your land being taken by someone else. This has been perverted in the modern age (beginning with Edward III in UK) where the Knights no longer protect the peasants for the rent they pay, but now the peasants fight to protect the Knights (80 million killed in WW1+2) who then take their rent! This absurdity is called National Patriotism.

Archaeological evidence suggests that war began with the rise of farming 7000 years ago, and escalated into the Bronze age. Once people stopped being nomadic and settled down, and once they started to generate wealth from the land and accumulate that wealth, it became a natural step for people to try and steal that land and so conflict began leading to huge Bronze Age kingdoms with vast lands, thriving trade, complex systems of ownership and powerful armies and kings. One of the earliest Western epics is Homer Iliad detailing one such Bronze age battle. In my own view what we have today is that same system which evolved in the great neolithic farming revolution and the kingdoms which followed. There is a lot of talk but essentially nothing has changed in 7000 years.

I hope I have made a case for Capitalism being the system by which people rent resources from owners, and those owners gain an income simply from being the owners of those resources. This is the main feature of the capitalist property system. While property is a right for all people in a property system, it only really benefits those who have more property than they need, so that they can start to rent out property and gain an income. This translates into finance where people with more money than they need can accumulate wealth in shares of companies (that is a share of the property of the company) and in so doing receive a dividend - essentially a rental reward from the part of the company that you own. Dividends are paid first to Capitalists before bonuses are paid to the workers, who actually make it possible, because Capitalism naturally is designed to primarily benefit capitalists.

Having Capitalists in an economic system is like having parasites. For every piece of work done there is rent to pay to someone. And even capitalists must pay rent to the parasites on their back. Up near the top of the food chain, and the most visible parasites, are the Banks. Almost everything is owned by banks, and we all pay a huge amount of rent to the banks. This is the ultimate achievement of capitalism. A class of people who get paid an income simply for lending out money. This was illegal in the Bible and one can see why. It is the road to serfdom. Hayek may argue that Socialism is the "Road To Serfdom", but the irony is that the work he uses, Serfdom, is none other than Capitalism itself. The Jewish people have often been caught up in this, as their laws only prohibit usury to other Jews not gentiles, while the gentles banned it universally. As a result the Jews could lend and made a vast profit in Mediaeval times bankrolling the European super powers. Serfs and Kingdoms naturally became rather unhappy at times from having these parasites around and it became convenient to remove Bankers at times. Sadly the Jews have too often been right in the firing line. But the problem was never Jews, but the system of Capitalism itself which twists and turns and finds scapegoats (ironically a Jewish custom), and feeds the masses propaganda, but ultimately never gives up on the structure of Rich and haves renting to the Poor and have-nots and creating an income in the parasitic process. Far from being the perpetrators, Jews have been at the forefront of criticising and raising questions about capitalism for over two centuries. But in all that time Capitalism has simply grown and grown.

I needn't add much on the excesses of the modern Capitalist Banking system that would make any Mediaeval Knight's eyes bleed. The entire world is in dept to International Banking. In the 80s the call was to Cancel 3rd World Debt, the problem in the new Millennium has only got worse and now the call is the Cancel 1st World Debt. There is almost no household in this world that is not paying rent to capitalists. Via the system of mortgages, Banks own 50% of all property in the UK and receive around 4% rent on that - this is an astronomical amount of income for a few private capitalists. It should be added that almost like a bucket shop, banks simply take money deposited and feed it straight out again in loans. They are just middle men - they don't actually do anything. And it is worse because the system of Fractional Reserve means that they only need to keep enough cash sitting around to handle the daily through flow of deposits and withdrawals... this means that they can write loans for almost any amount even far exceeding what they actually own themselves. This is the Capitalist Wet Dream gaining an income on things you don't even own!

So Capitalism has come a long way from the original argument that someone owns the fruits of his labours (which the Bible says he doesn't anyway), to owning his produce of his land, to owning some of the produce of people who work on your land, to owning some of the income on loans backed by money that you don't even own.

What does all this mean to the average person. The visible impact of all this money sinking down the tree of ownership, is the branches get even fatter and fatter the further down you go and the leaves become skinnier and skinnier. It leads to what is called Inequality. In a perfect system where everyone earned the fruits of their own labours directly we would have a relatively equal system. Governments may intervene to enforce law and order, and provide a universal safety net but even without this the system would be fairly equal. But as soon as people begin to buy things just to rent them out, the drains start to flow and money gets leaked down the tree. The result is the the poor getting poorer and the rich getting richer.

In this fairly detailed exposition I hope it is visible that there are very good reasons why capitalism has come to exist and take over the world (staring 7000 years ago). That wars are an integral part of capitalism and that inequality is its result. The problem that remains is to understand why people keep on doing it. It might be that individually we always thing we'll be the lucky ones and get that life style of luxury for ourselves so we borrow to achieve it, not realising that rents on people borrowing is exactly the income that makes capitalists fat. It is like the person who says buy my book to find out how to get rich, only to discover once you've parted with your money that he is making his money from book sales. It is a self generating system, a mirage that keeps tricking people over and over again to lose their money and stay poor. Sadly the only way out for people to wake up, but we're 7000 years in and that hasn't happened yet.