The nature of capitalism will lead to a concentration of wealth and power
Capital and Profit
Capital, or private ownership of the means of production, is owned to obtain a profit. This profit naturally comes directly from those who labor on the means of production. This is an important topic and will be needed later in this post. To sum it up, the workers labor while the capitalist controls. Profit is simply the difference between the value the worker produces and what is paid to the worker. This is also called surplus value. (To learn more about that exploitation go here)
Profit is often re-invested, to buy more capital. This is done to provide more profit in the future. This causes every single business that is not going bankrupt to expand. This expansion causes many problems. One is over-production. Over-production eventually causes a cascade of failures once nobody is willing or able to buy the product. One example is the housing crisis recently in the United States. Since not every company will survive this crash, they become more centralized.
Bigger business tend to be more efficient with their resources, giving them a competitive edge in markets. Physical machinery is one example. It's a lot more efficient to have 500 people in one factory than 10, especially where the costs of basic necessities are concerned, like heating, cooling and the building itself. More efficient machines for manufacturing tend to be bigger and more expensive (especially with automation). This becomes a massive startup cost, that less and less people can afford as it gets more advanced. The only way to afford it is a loan, and without some crazy new concept will put you at a major disadvantage. This leads to more and more concentration in wealth and power to those who own the biggest factories.
The Rate of Profit
There is also the tendency for the rate of profit to fall. Marx split the production cost of goods into two parts. One invariable and one variable. The invariable one is based off of the cost of raw materials and the costs of machines. The other cost, variable, is wages. Wages can rise or fall based on market conditions. There are two ways capitalists can increase profits. By increasing the amount of raw resources and machines or by making them more efficient. When the machines are more efficient less workers are needed to produce the same amount of goods. (The more effort put into making a machine more efficient, the more complex or large is becomes. This puts bigger business at an advantage, concentrating capital as well.) This machine increases profit for a time, but eventually everyone gets one or goes bankrupt.
The key here is the ratio of the cost of human labor to the cost of material and machines. As discussed above the only value added to an object is added by those who labor on it and profit can only come out of the difference between wages and the value added to the object. As more product is produced by the worker the difference between the wages of the worker and the value of the object decrease, the profit must decrease. In other words, since the amount of labor to produce an object is the only measure of its value, and that price is a reflection of that (supply and demand will tend towards an equilibrium), as the amount of labor needed to produce an object approaches zero the ratio of profit on investment to cost of investment approaches one. To simplify that further, when no labor is required to make an object the cost is simply that of the materials and there is no profit possible. Capitalism tends towards production that takes less and less human labor, meaning this will more or less be followed in a vacuum.
The tendency of the rate of profit to fall is only that, a tendency. The economy has ways of, temporarily, managing and stopping this. Some of this is more intense exploitation of labor by lowering wages, reducing the cost of materials through trade or lowering the cost of production (starting this over again), increase in the “surplus population” (the unemployed that can be set to work, this is one reason why capitalism depends on unemployment), or share capital with other businesses. [1][2]
Taken with expansion, the tendency of the rate of profit to fall gives only two options. Monopolise the market or become imperialist in search of super-profits. Since this is only easily done with large businesses, it is more concentration. Remember, as the rate of profit falls things like loans will catch up with businesses and crush them, giving the largest yet another advantage.
The final problem of this leads into the next topic. If wages are pushed down as one of the only ways to keep profit from falling to near zero, who will buy the product? You need two large groups of people then to grow larger. A large group to buy the products and a large group with near zero wages to create the product.
Finance Capitalism
Finance capitalism splits the world between two groups: The great powers and finance capital. Both have the goal of extracting as many resources from third world countries as possible. These are both forms of imperialism, the highest stage of both capitalism and centralization.
Finance capital is always in search of the highest return on profit. As explained above, that means it is looking for the goods that take the most human labor to produce, with the lowest wage. They eventually settled on areas to imperialise with either their military, finance capital, or both. These areas today are now known as the third world.
Finance capital must find a way to protect its profit and increase it. This is often done through a monopoly. This means that the country, even though it could produce the goods itself, must be reliant on the third world country for these goods produced in the monopoly. The massive profits from this monopoly are often actually shared with the entire population of the home country. This materialises in better living conditions and cheaper goods accessible by a greater amount of citizens, even though less is actually produced by the country. (Take the United States for example.) This is needed to keep producing profit, because without this group of privileged working class members all markets under capitalism would grind to a halt. Since it is still a group of warring factions, until one wins out they can not allow this to happen.
Giving resources to the working class in the first world countries has more than one consequence. Bribing politicians, giving workers higher wages, and giving workers a few more rights like welfare and medicine placates them. In other words, these workers do not want to drop to the level of the third world, so they fight to keep the system in place. The politicians want more money, so they fight to keep the system in place. Workers only want to survive, and they must fight to keep the medicine in place. The two party system ensures that the workers do not fight the rich for these rights, but each other. All of this together gives the rich power to control the general direction of society, while the warring workers are able to choose specifics, like the ability for gays to marry or if the poor should get one amount of scraps or a slightly larger amount of scraps. The goal of this is to prevent organization of the workers.
This has another consequence, war. Since capitalism must always expand, the finance capital invested in these third world countries will be re-invested. Eventually, third world countries will run out of industry, people, and materials to exploit. This means they must either invest in increasing the exploitation or expanding beyond that country or market. Research has lead to the claim that this is the reason for world war one, and many other, smaller, wars. Obviously, these wars have winners of some sort. These winners go on and expand into the industry controlled by the losers, increasing centralization even more. [3]
All of these together have brought a small group of people to the top of the world. Five people own more wealth than half of the world, combined. They are the rulers of this world. The rulers capitalism will always create in one way or another. The rulers are not the government, not the police, and not the military leaders. The rulers are those who own the government, not those who lead it. [4]
The only way to get a monopoly under capitalism is to use the govern-cement. And then you end up with crony-capitalism.
While real factory owners have to make a profit. (more incoming than outgoing) The factories who are sucking off the govern-cement teat do not. Like all the car companies in The US, including Tesla.
But, if it wasn't for govern-cement regulations keeping other car companies from ever forming, then these car companies would all go bankrupt as better car companies formed through innovation.
Further, all of the huge separation from the 0.01% and the 99.9% is the largest monopoly of them all. Banking. Currently the central banks skim 6% off of moneys every year. Yes, you pay 6% per year just to hold that dollar bill in your pocket.
Next, these central banks were on a fractional reserve lending. So they are inflating the money supply. This ends up with the little people paying a tax of about 12% per year on all dollars that they hold.
The people nearest the spigot of money creation get fantastically wealthy, because they pay 1%, while the rest of the people pay 12%. This arbitrage takes from all the little people and gives it to the fat cats.
And to reiterate, this only happens because of the govern-cement protecting the business by allowing a monopoly.
Unfortunately none of this is capitalism. So, you cannot lay it at the feet of capitalism.
All this talk of the cost of labor. Until we reach a technological capability to end the necessity of human labor to produce goods and services, we will continue to need a way to measure the value of what each of us brings to the production counter, separately.
But in actuality, costs will never be zero and as I've said repeatedly, people will always “Feel” as if their education, breeding, charisma, talents, etc., demand more appreciation than the next guy and this jealous attitude will always work to kill the utopian system.
There has to be competition and strife in everything we do to make things worthwhile and to prove ourselves at least to ourselves in order to gain acceptance of our position in life and our individual purpose in it. And "Communism suppresses that human need for competitive misery".
re: the movie Matrix.
https://steemit.com/anarchy/@adconner/eisenhower-economics-to-government-subsidies
The 1% has us surrounded by the entitlement addicts and the 435 people charged with protecting my freedom can't hear me over the powwows being screamed above all else as we cover our wagons and hunker down until the Calvary comes..... they are coming aren't they??? Aren't they???
You are perfectly right !!! that way they destroy the communism because they cannot get rich in that system, was not good for them, they do not care about us , they tell us only lies. watch this if you want to know them !!!
In my opinion, the Communism its much better then capitalism "if" they giving freedom to the people!
communism is giving freedom to the people
not the communism giving freedom but the system is good "IF" its associated with freedom!
what? it has always been associated with freedom.
Freedom, where? I come from an x - communist country where was not freedom in that period, maybe was in theory !
what country?
Also, propaganda does exist, I'm not sure that you are talking about a country that was actually communist.
The country that received a coup d'état from December 1989 and which had the most victims in Europe in an attempt to remove Communism.
Coordinated by KGB, CIA, MI5, etc.
Romania!
Communism, socialism, and fascism seem to only be rich man tricks to get your money. There is no way to get rid of capitalism, but it could use improvments in its monopoly problem and primitive accumulation problem. It wouldn't be so bad in the world if the super rich could be defended against. Ah! Therein lies the rub! An honorable rich man is fine and good, and benefits society. A criminal harms us all. How do we protect ourselves against these criminals who have amassed fortunes, in some cases over many generations? The Satanic Cabal, that amasses money doing crime? How to protect against? Crickets...
more like concentration of wealth under jews.
well this is ironic
What is goy?
thanks for sharing :)
spamming isn't going to get you anywhere
"Capital and Profit
Capital, or private ownership of the means of production, is owned to obtain a profit. This profit naturally comes directly from those who labor on the means of production. This is an important topic and will be needed later in this post. To sum it up, the workers labor while the capitalist controls. Profit is simply the difference between the value the worker produces and what is paid to the worker. This is also called surplus value. " -anarchyhasnogods
This is a profound misunderstanding of what the free market is about. Profit is the difference between how much it costs to create a service or product compared with how much someone is willing to pay for it.
Who is being exploited if you make or buy something and sell it to someone who is willing to pay a certain price?
Which person was exploited when Floyd Mayweather made over $400 million and Conor Mcgregor over $100 million during their voluntary exchange?
If you volunteer in exchange for money to work x hours for a company that is your decision. Nobody is forcing you to be there is a free economy. The worker no more produces the value than you make the apple you buy in the store!
"This is a profound misunderstanding of what the free market is about. Profit is the difference between how much it costs to create a service or product compared with how much someone is willing to pay for it.
Who is being exploited if you make or buy something and sell it to someone who is willing to pay a certain price?"
The worker who is forced to make it or starve.
"If you volunteer in exchange for money to work x hours for a company that is your decision. Nobody is forcing you to be there is a free economy. The worker no more produces the value than you make the apple you buy in the store!"
Just because I don't have to choose that specific one does not mean I have to choose a master to work for. Work in a sweatshop or buy your own.
:This is a profound misunderstanding of what the free market is about. Profit is the difference between how much it costs to create a service or product compared with how much someone is willing to pay for it.:
you didn't read any of the links did you? The only thing that adds value to an object is human labor (because that is the only thing necessary to produce any object, even the tools and materials to produce the object were acquired through it. The value is what it takes to produce, not what you can sell it for.
It doesn't matter what people are willing to pay, we can just produce more. It's not that fucking hard to understand. We let 20 million die a year of poverty just because we can't make a profit off of them. We produce more food than is needed for all of humanity to survive, but millions still starve to death.
The one with the profound misunderstanding is you.
https://www.marxists.org/archive/marx/works/1847/wage-labour/
I'm not going to explain myself a third time, just read the post next time.
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