The Flaws of Capitalism

Capitalism is an effective economic system with several flawed assumptions, notably that the creation of profit is directly tied to the well-being of citizens.

Tragedy of the commons

Say that a river has a fixed number of fish. The fisherman would collectively prosper if they enforced catch limits for each boat to prevent over-fishing. Yet each individual fisherman profits the most if they catch as many fish as possible, leading to a situation known as the tragedy of the commons where the fish die out because of collective greed.

This is why socialist regulations are important. Corporations profit immensely in the short run by disrespecting the environment, for example, but will collectively suffer once resources are depleted. To counteract this phenomenon, they must pay for the externalities they cause.

Inelastic demand

Healthcare demand, for example, does not vary as a function of price. If the alternative is to die, people will pay anything to get their insulin and consequently pharmaceutical companies can fix their prices arbitrarily high. Again, governmental regulations are necessary in these cases to prioritize the well-being of the people over profits.

Capitalism prioritizes solely the welfare of stockholders

“Delaware case law is clear that the board of directors of a for-profit corporation must, within the limits of its legal discretion, treat stockholder welfare as the only end, considering other interests only to the extent that doing so is rationally related to stockholder welfare.”

Quotes

When I was poor and complained about inequality they said I was bitter; now that I’m rich and I complain about inequality they say I’m a hypocrite. I’m beginning to think they just don’t want to talk about inequality. — Russel Brand

When I give food to the poor, they call me a saint. When I ask why the poor have no food, they call me a communist.”

— Hélder Câmara

People are taking the piss out of you everyday. They butt into your life, take a cheap shot at you and then disappear. They leer at you from tall buildings and make you feel small. They make flippant comments from buses that imply you’re not sexy enough and that all the fun is happening somewhere else. They are on TV making your girlfriend feel inadequate. They have access to the most sophisticated technology the world has ever seen and they bully you with it. They are The Advertisers and they are laughing at you.

You, however, are forbidden to touch them. Trademarks, intellectual property rights and copyright law mean advertisers can say what they like wherever they like with total impunity.

Fuck that. Any advert in a public space that gives you no choice whether you see it or not is yours. It’s yours to take, re-arrange and re-use. You can do whatever you like with it. Asking for permission is like asking to keep a rock someone just threw at your head.

You owe the companies nothing. Less than nothing, you especially don’t owe them any courtesy. They owe you. They have re-arranged the world to put themselves in front of you. They never asked for your permission, don’t even start asking for theirs. — Banksy

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