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Why People Hate Capitalism - Part 2

By Bruce of Stone Marmot

Sept. 19, 2008

In a previous rant on this blog, I stated that:

"Capitalism is the most democratic economic system there is, for every time you spend a dollar, or refrain from spending a dollar, you are casting a vote. That is why so many people hate capitalism, because, with capitalism, the world people live in is the sum total result of each of their individual actions. In other words, capitalism makes people responsible for their own actions, whether they like it or not."

I got responses from a lot of people who agreed with the rant is general. But I also got a lot of responses that disagreed with points in the rant. I will respond to some of those here.

Some stated that capitalism doesn't seem to be working in the US. I feel the main reason capitalism doesn't appear to be working is that people are impatient and want everything now. People want at least the same standard of living as their parents, which is reasonable. The problem is that they want at age 25 the standard of living their parents didn't achieve until their were in their 50's, which is not reasonable. Consequently, they ignore all the other consequences of their money practices because achieving that standard of living as soon as possible is the only thing that counts.

Another reason capitalism doesn't appear to be working is that we don't live in a 100% capitalist society. We have a tremendous amount of government restrictions on what we can do. The government is also the number one market for goods and services. And taxes still take about one third of the average person's income. This greatly reduces the power consumers have in the marketplace. This is what also gives politicians their power, not capitalism, but the government's restrictions and favors on the market and its taxing and buying power in this society.

Some stated that our "capitalist" medical system is presently messed up. But it worked reasonably well way back when it was about 100% capitalistic. Then socialism crept in with companies and the government offering health plans for their employees. This resulted in employees abusing these plans running to doctors for every little insignificant thing, which they wouldn't have done if they were paying out of their own pockets. This also encouraged providers to jack up costs because they perceived the company and government health plans as having deep pockets. Lawsuits over every little thing haven't helped either. Now costs have escalated so that you can't afford medical services unless you are in a health plan, and many who don't have company or government plans can't afford their own health plans. I suspect it will complete the move to socialist within the next decade.

In most cases, we choose to be in debt. There are always exceptions like those who are struck with sudden bad luck, like an injury or serious illness, but those are the minority. Most are in debt simply because, as stated above, they are impatient. They want everything now, aren't willing to save for anything (the typical US household now has a 0 % savings rate, according to recent news), and live to the limits of their paychecks. They live to their absolute financial limits with no regard for putting money aside in case something goes wrong. Then when something does go wrong, they are immediately financially strapped.

Many responded that we need to live to our financial limits just to survive. This is true for a small minority. The majority live in much bigger houses than they really need, which increases their mortgage, utility, and maintenance costs far more than necessary. They live way too far from where they work (typically 10 to 20 miles, though often more), which makes them very susceptible to increased transportation costs. Most households have a TV set per person in the household, a cell phone per person, many even have a car per person. Most middle school kids these days expect to have their own cell phone. Most teenagers feel they are entitled to their parents buying them a car when they turn age 16, and most get their car. Video games, iPods, and iPhones are still selling pretty well, and none of these things are cheap. Concert tickets for an major artist now start around $50 and can run into the hundreds or even thousands of dollars for a two hour show and most of these artist are still selling out venues.

None of this sounds like just barely making ends meet. If the majority in this country were "barely making ends meet," we wouldn't have computer and cell phone industry multi-billionaires and athletes, pop music stars, TV celebrities, and movie stars, etc., who are making tens or even hundreds of millions of dollars. These people all make their fortunes off our discretionary spending.

Socialism doesn't work. Socialism doesn't give anyone any incentive to work, to improve, to conserve, to do anything, because socialism implies that someone else (typically the government) is going to do everything for you. For the average person, unless they see some possible additional benefit for additional efforts, they will do as little as possible.

Other than capitalism, socialism (or communism, which is very closely related), subsistence (where every family is responsible for producing 100% of what they need), or some combination of these three, I know of no other alternatives to meeting needs. I'm very open to ideas, though.

I'm not asking people to do the impossible. I'm asking people to do things I already practice myself, unlike Al Gore and others who want people to make all sorts of sacrifices but are living high off the hog and unwilling to make the same sacrifices themselves.

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