The End of Capitalism
Economic crises are an
integral part of capitalism. A crisis arises as the result of an insufficient
balance between supply and demand. Capitalism doesn’t have a solution that can
prevent crisis because the entire production is based on free competition of
manufacturers on an unpredictable market. In addition, capitalism is forced to
constantly seek new forms of consumption in which the companies would realize
profits as a condition of their survival. Capitalism cannot survive without
continuous economic growth. Therefore, the production of capitalism is
technically stronger and more capable to meet the needs of society quicker. The
cycles of production expansion and recession accelerate faster so that economic
instability and crisis of capitalism occur more often. I think that the
frequency of crises will soon force people to seek a better solution than
capitalism. Finally, I would like to say that capitalism exploits the natural
resources of our planet Earth on mass. The limited resources of the planet Earth
are the final limitation for the economic growth as well as an invincible
obstacle for the survival of capitalism.
The American debt is growing progressively and thus creates one more huge problem that capitalism will encounter in the future. Shown below is how the debt grows at any time.
Capitalism is based on a debt economy, which is the main cause of today's economic crisis. But in the media, the crisis is explained by greater consumption than earnings. I don’t think this explanation is good enough. There is a much larger quantity of produced goods on the market than consumers can buy. This is the source of the crisis. The crisis is the result of huge disproportions in the earnings of people. Some people earn too much, and others too little. In order to be able to buy needed goods those people who have too little get into debts with interest with people who have too much. When the debts accumulate, the debtors can no longer afford to buy new goods because they have to return the debts. This debt restrains the economy. One can say capitalism suffocates itself. The economic crisis could quickly disappear if the debts are cleared but it would not be a good option. That would be unjust according to the system of values that exists today. One cannot destroy the existing system of values when another one does not exist. It would create a highway to chaos or dictatorship. The system of values in society needs reforms that will establish some form of compromise between those who have too little and those who have too much.
The American industry is in big trouble as
well. In the consumer-saturated society, one cannot produce goods for unknown
consumers and expect they will be so thrilled with such products that they must
buy them. Capitalism is based on the fear for survival. That fear works
counterproductively for capitalism in the recession of production. When the
recession comes, workers and companies are afraid for their own future so they
keep their money because it is the greatest guarantee of survival in the
uncertain future. They then decrease their spending, and do not buy goods. This
strongly affects companies because they cannot sell their products, so that they
endure great difficulties up to the point when they collapse into bankruptcy.
Workers lose their jobs massively, they do not receive income, do not buy goods
and the crisis progressively deepens.
The American President
The new President of the U.S., Barack Obama has received great support from the American people, and perhaps most importantly, from the media. It said to me that the biggest capital has accepted him as an appropriate person to resolve the economic crisis. Both capitalists and workers are in big trouble, and normally, they both try to escape the crisis, but of course, each of them wants to pay the smaller cost of necessary reforms. Barack Obama will decrease tensions in the American society by his human qualities and abilities. He will be proposing socio economic reforms that the American Congress and Senate, as traditional agents of liberal capitalism, will probably prevent more than approve, even though the American system has already been blocking the development of American society for a long time. However, I think the US President Barack Obama will successfully reform the U.S. health care system and get the US closer to the health standard of the developed world.
Americans, like all other nations, are taught to believe that a good democratically elected leader can solve their problems. It should firstly be noted that there is no option to such beliefs, and secondly these beliefs are wrong. Practically not one incorruptible person exists, because power corrupts. In addition, there are very rich people who have more power than American leaders. They have performed a lot of pressure from all sides on the president assuring him that the options that they represent are best. President Obama, under the pressure of such people, declared the war in Afghanistan righteous even though it can never be. In addition, the U.S. politics in Afghanistan cannot achieve success. One cannot win people who are willing to give their lives for the goals in which they believe. The only good thing President Obama can do in Afghanistan is stop the war but it would confront him with very rich people who profit well from that war and on which he himself largely depends on.
Furthermore, President Obama is trying to find an escape from the crisis that the U.S. economy is in by restoring capitalism. He actually does not have other choice. There is practically no other system than capitalism, although capitalism is an underdeveloped social system that has increased difficulties to produce its own stability. Severe economic crises, that are inevitable under capitalism, seriously affect all people. There is technically room for democratic improvement for capitalism which might bring betterment to society, but capitalism is very close to it's limits. Capitalism is not a good enough system. Actually, capitalism is a bad enough system and must be replaced. Barack Obama and all other good leaders who try to restrain liberal capitalism by reforms can not achieve significant success because capitalism cannot be improved as much to form a good and sane society. After good, but unsuccessful leaders, disappointed people often choose a strong right-wing leader who makes the situation worse. But the worst in all this is that people have no alternative. People today are powerless and no idea that would change that exists. Herein lies the foundation of the social evil today.
The new democratic tax policy is a necessity and realizable in capitalism
States plan and order their
States are the largest consumers and therefore they can stabilize production the
most. U.S. President Barack Obama properly proposed the way out of the economic
crisis through government loans to public works, which will employ a large
number of workers. President Franklin Delano Roosevelt did something similar to
that in 1933 after the Great Depression. He hired workers in the public work
force and pulled the U.S. out of the crisis throughout a period of seven years.
One should clearly say that the method used to relieve the economic crisis in
1933 and the one today are closer to socialism than capitalism. It clearly says
to me that the future of mankind is going to be closer to socialism than
Technically, there is room for democratic improvement for capitalism, which might bring betterment to society, but capitalism is very close to its limits. Capitalism is not a good enough system. Capitalism is immoral. Capitalism is based on privileges of authorities and the powerlessness of ordinary people. Privileges are unjust and create alienation. As long as there is injustice and alienation in society it cannot be good. Capitalism is not enough rational system because it requires too much unnecessary work. Capitalism cannot establish a stable production and therefore cannot establish a stable society. That is the reason capitalism cannot prosper.
Capitalism suffers in production-saturated societies but prospers well in scarce societies. That is why capitalism often searches for help in wars in which it destroys everything and practically runs its development from the beginning. Capitalism may withdraw from crisis, however, one should not think about how to help capitalism survive, but rather about the creation of a far better system than capitalism for all the people. Such a system must take power from authorities and give it to the people. I have proposed such a system but it is so different from all existing models that people cannot easily accept it even though they would all live far better.
All political and economic measures, which I have mentioned so far, can be
applied in capitalism. The new system that I have proposed accepts the model of
the market economy. Private companies will continue to operate in the same way
as today. Major changes will occur in public companies. They will organize new
production, far more productive than the private companies can achieve.
Even though the privileges of workers in private companies are less than the ones in public companies, the privileges still exist. The majority of jobs are normally occupied and they are not available to other workers even if they might be more productive than existing ones. In addition, there are jobs in private companies that are more awarded by high income than the workers would demand on the free market. Why is that? Capitalists need buffer zones between themselves and exploiting workers, which are unconditionally obedient. Secondly, it justifies inequality and thus gives the stability of capitalism. Capitalism still has an underdeveloped mechanism of rewarding good work, because income awards are not fairly distributed. In addition, capitalism has completely underdeveloped system of punishment for a bad work. Perhaps it could be presented best by the management of American corporations. They are compensated by severance packages in the millions of dollars even if they have damaged their companies by their incompetence. Generally speaking, I cannot see any other reason for that other than that these leaders are involved in large immorality and sometimes even in crime. Such benefits are probably used to shut their mouths. This is definitely a form of corruption that does not give a good perspective to private companies and the capitalist system.
Privileges of all kinds must be put to an end. A good economy requires the complete abolition of privileged work positions. One should protect the economic existence of workers rather than jobs. It is necessary to allow an access of every worker to every work post. That would be accomplished by giving every public job position to the best available worker. Also one needs to develop an objective system of remuneration to each employee for good work and a system of punishment for bad work. These measures will build a good economic future.
The new division of work is a necessity
As private companies are given financial assistance by states, they should
become co-owned by the states. This means private companies will most likely gradually
join public ownership of the means of production. The state-owned companies will accept a completely
new economic system that will be far more economically productive than private
companies. Firstly, the changes will affect the division of labour. There is no
fairer or better distribution of labour than an open market competition of
workers for every position. The worker who envisages and offers the highest
productivity for any public work post at any time will get the job. Productivity
could be measured by earned money, by quality and quantity of produced goods, or
by the productivity evaluation of workers by clients. A worker who offers more
profits, produced goods, better, cleaner, or cheaper production will get the
job. That is an idea. How to make such changes to bring the most possible
advantages and the least possible disadvantages to society is just a technical
question. I have defined a pretty good solution in my book “The
Humanism” but that will probably have to be
more developed by practice.
No economy can be more productive than the one where the best available worker gets each job. Such an economy will easily become significantly more productive than the capitalist one, so that the latter will be forced to recede. Also, the workers will no longer be interested in working for private enterprises where they do not have enough freedom to choose jobs or decide their income, nor do they have the opportunity to cut into the profits. In the new system workers will participate in the distribution of profits, which as a rule is not the case in private companies. Soon after this system is implemented, private enterprises will be forced to withdraw and join the new system.
Defining the value of man's productive power is a necessity
In order to create a good society, one should define and accept all values that are, or should be, important to society. Then, one will need to determine which of these values each person possesses. The sum of all values that a person creates throughout his life, presented by a numerical value, may be called human productive power. Taking into account that most people would probably not like to have their productive power compared to that of other people, such a value may be kept secret, known only to the owner of the value himself.
The value of human productive power will incorporate, firstly, capitalist values, such as real estate, money, shares, and all assets that capitalism recognizes as valuable. In fact, this measure will look like free association of private enterprises although the merge will be forced under heavy pressure from higher productivity of public companies. Owners of private companies will receive stocks for their ownership of the united company. They will also find an interest in the fact that a merged greater company would be more stable to conjuncture changes. This would in principle mean that the former owners of companies would realize smaller profits in good businesses, but also smaller losses in bad businesses because large companies will cover the disturbances of profits on the market. In addition, the production of such company will be very stable because it will be increasingly based on customer orders. If owners of private companies could have an option to join such a company they would most likely do it because that would save more of their capital value in frequent crisis of capitalism.
With the human productive power, the establishment of an effective system of responsibilities of workers will be possible. In publicly owned companies, workers will share profits proportionally to the numerically determined responsibility they themselves propose for their work. This is an idea for which I just hint on here. It cannot be understood well enough without reading and analysing the book Humanism. The same goes to most of the new ideas I am presenting here. The higher responsibility will naturally realize a larger share in profit, in the case that the company’s profit increases. Such profit will now be expressed in a value that reflects the workers’ human productive power. And vice versa, in case of production losses, workers who propose higher responsibility for their work will realize larger losses in value representing their productive power.
The good future of humankind cannot be based on the value of capital only. Man needs to become the largest value and this orientation can be stimulated by the value that presents the human productive power. Besides the capital-based value that represents an element of human productive power, we need to recognize and include all other values that society accepts or should accept. Such values are: man himself, his education, work experience, contributions that he has given, and awards that he has received for creating value to society, etc. The pooling of different forms of value will require a comprehensive study and - certainly - difficult negotiations in society. However, after some time, new, democratically regulated standards of all values that can be created in society could be established. Such regulation will automatically be applied whenever necessary.
If the society would like to stimulate education, it might raise awards for higher education in the value that represents human productive power. If, for example, a region has too low a birth rate, people may decide to award parents with more children with this kind of value. And vice versa, if a region has too high a birth rate, people may decide to punish parents who have more children by a certain value representing human productive power.
The value of personal productive power will be specially affected by disobedience to the law. If a person acts against the law, he will lose a legally defined value from his productive power. Each crime may be easily judged by existing laws and recalculated into a value representing human productive power. If a person commits a very serious crime he might lose all the value from his productive power, and even get a negative value. The proposed system can make assignment of such a negative productive value much more painful than a prison can be, so that prisons will not be needed any more. Each person will avoid committing any crime carefully. If a person still gets such a negative productive power, he will try hard to fix it and that will only be possible through hard productive work, and by extremely good behaviour over a long period of time.
Society may regulate whatever it needs through evaluation of human productive power. However, all values cannot be regulated, because people have varying individual needs. Therefore, the value representing personal productive power should also depend on unregulated values, based on people’s opinions about the free actions of others. This is a completely new measure and, in my opinion, the most important measure of the future. I call it democratic anarchy.
Democratic anarchy is a necessity
A democratic anarchy is a new form of social relations, wherein every person exercises equal legislative, judicial and executive power in society. It is possible to accomplish it in a manner that gives each person the right to evaluate the activity of any other person. Each positive assessment should automatically bring a small increase of the total value of productive power to the assessed person. On the other hand, any negative assessment will result in a punishment of the same form. Let us say that awards and penalties of such evaluation would have an equivalent value of one dollar. If the society were afraid of such power of individuals, the power of evaluation could be reduced. Even the evaluation with the power equivalent to just one cent would be enough for the improvement of society.
A democratic anarchy will direct each member of society to create the greatest possible advantages for society, and to diminish or abolish creation of all forms of disadvantages. Such a measure will definitely decrease uncontrolled or insufficiently controlled individual power originating in a privileged social status. I have to stress that the privileged status of individuals causes the greatest inconveniences and problems to a society. Given that all individuals will have the equal right of evaluation, and that they will give their assessments independent of any written rules, such a democracy will assume the form of anarchy. In this extremely simple way, the populus will for the first time in the history of humankind realize a great direct power in society, which will result in highly harmonious and constructive social relations.
People will judge other people freely. That means an immoral person may evaluate other people dishonestly but it will not matter much because an individual power of one dollar cannot produce harm to anybody. Individuals will not have much power in society, but their evaluations joined together will be very powerful. A person who receives a large number of negative evaluations would try hard to avoid doing anything inconvenient to other people. Besides, the person who receives bad evaluations would never know who has evaluated him negatively so that he would try to improve his behaviour towards everyone. As the result, bullies will not harass children at school any more, bosses will not abuse their employees at work, neighbours will not produce noise at night, salespeople will not cheat their customers, politicians will not lie to people, etc. They will all try to please other people in the best possible way. This is what will take privileged powers from all the people; this is what will eliminate social evil and form a good society.
The system of democratic anarchy will especially affect authorities. The higher the position an authority has in society, the greater the responsibility he would bare to society. For example: The president of the US might get 100,000,000 bad evaluations from the American people for bad policies, lies, and for criminal aggressions on countries. That would cost him 100,000,000 dollars in only one month. On the other hand, I doubt that his supporters would certainly evaluate him positively because they might easily have higher positive evaluation priorities and would spend their positive evaluations elsewhere. Non-privileged presidents would not dare perform bad policies any more. And if it happens somehow, they would run away from their positions very fast. Only the most skilful and brave individuals would dare lead countries. They will not be authorities any more, but our servants. It is possible tolegally prevent people from performing any public leading roles if they have more negative than positive evaluation ratings. Such measures would solve virtually all problems in society.
Democratic anarchy is actually the most powerful tool of justice ever. How come? The answer lies in time. There is a saying: "Silent water moves hills". The permanent power of evaluation even with such a small power like one dollar will make people respect each other strongly. Human beings will become values. Everyone will try hard to please society in the best possible way. That will create a miracle no other tool of justice has ever been able to make. That will create a good and sane society. In the future, the system of evaluation will probably abolish state laws, police, military force, and very states. Nobody will need them anymore. A perfect society will be formed and everyone will recognise that. A human society will become prosperous beyond the wildest dreams today.
It is understandably desirable that the value of human productive power becomes very important to society and therefore its acceptance should be additionally stimulated. That will be accomplished, firstly, by giving each person voting power in society, proportionate to the value of his productive power. I am talking about a great change in the democratic system. Today, people have only the right to choose their parliamentary representatives. They have neither opportunity nor right to participate in making other decisions that regard their interests in society. We need a compromise equally acceptable to all. Let each person have a right to participate in making any democratic decision in society, but let him earn this right by his productive contribution to the development of value in society. This system proposes unequal voting power, accepted by a consensus of political parties. In reality, it will contribute to the development of democracy because the people will, for the first time, get a chance to directly participate in decision-making about all questions regarding their interests.
Secondly, each person should get an income for work in publicly owned companies, proportionate to the total value of his productive power. The value of human productive power will thus become a humanistic form of shares. This measure will additionally encourage residents of certain regions to voluntarily merge their private companies into one big "humanistic" company.
Thirdly, the value of personal productive power must be inherited through generations in order to be accepted. Through implementation of such measures, every member of society will recognize the value of human productive power as a great value – this will contribute significantly to the development of society.
The economic security of people is a necessity
Capitalists are not at all interested in how consumers will make money for the purchase of goods they produce, even though there is no survival of capitalist enterprises without it. Liberal capitalism does not want to take care about the losers on the market, and this is another reason why capitalism must go down in history. The new system will ensure the economic independence of each individual as a precondition for achieving freedom and survival of society as a whole. Only one individual who is not economically cared for enough may endanger the whole society. In addition, the system of work competition needs a greater degree of economic security and stability than today, so that each resident will receive some kind of income. The height of individual income will primarily depend on the value that presents the productive power of man, then on the price of the current work, as well as on the accomplishment of proposed productivity.
The people will also directly establish the level of minimal earning directly. If workers’ interest in performing their work is insufficient, the society may directly reduce the minimal income, which would stimulate workers to work more. If productivity is higher than necessary, the society will then increase the minimal income and thus reduce the income-based stimulation for work.
Society as a whole will guarantee the economic security and stability of each individual. This will remove the fear that rules through the world today. If people were not afraid for their own economic future, they would be spending money and that would quickly pull out today's economy from the crisis. But capitalism finds the main motivation for work from fear for economic survival of workers and that is the reason it cannot guarantee economic security to people. The new system will build motivation for work from the free choice of choosing work and in the satisfaction that comes it. Besides that, the restoration of demand would only help the economic crisis of capitalism. In the long run, it is not a good solution enough for the crisis of capitalism because consumptionalready exceeds the real people's needs in the developed world. A long term exit from the crisis should be sought in changing the system of values that rule today.
To each according to their needs is the future of humankind
By that time, people will learn that collective consumption is significantly more rational and stable than individual consumption, so that they will directly decide to allocate more money for taxes from their gross incomes. The more people allocate money for tax purposes, the more goods and services will be allocated for the needs of the collective consumption of society. This is the consumption that the most developed democracies in today’s world spend mostly on national defence purposes. Given that the new system offers stable and good relations among nations, people will no longer allocate money for the needs of armies and armies will cease to exist. In the new system, war will no longer be possible. People will direct funds for the needs of the collective social standard. I am talking about huge amounts of money that can significantly improve the standard of society. The new system will enable the introduction of free individual consumption. Some states today have a free education, free health insurance; some states distribute freely some goods and services. Why would a new system not provide more?
People will change very much in the new system. I think that one far away day; in purpose to establish a more stable and rational economy, all people will freely allocate all the money from their gross incomes for tax purposes. Then, all of the goods and services will become freely available to all people. The goods will lose their alienated market value, but the value of the use of goods will still remain. It will be worth the same as air is worth today. I am not talking about utopia or about an oppression of people, but about the advanced technical system that will follow the needs of the people. If only one man, however, would like to keep his own income, theoretically the completely free goods and services would not be applied.
The new economy will naturally step in; it will remove the shortcomings of capitalism and ensure further development of civilization. It will largely base its production on customer orders so that it will be stable. It will level down the market competition from the level of companies to the level of work posts. There is no more productive economy than the one in which each position gets the best possible worker, and that is the reason why capitalism will go down in history. The new economy will eliminate the disadvantages of capitalism and will bring much greater advantages to society. After capitalism, humanism will arrive, a system that will follow the needs of people a lot better.
The political and economic model described here will improve the efficiency and stability of production, introduce more justice into the process of production and distribution, and provide significantly higher advantages to all members of society. The open market of work posts will eliminate the workers’ privileges. This will further eliminate corruption, the main source of immorality of today's society. The market of labour will give people the freedom to choose jobs that they like more. Work will become an immediate value to itself and people will enjoy working. People will be free. Freedom is a state when people do not have to ask permission for anything from anybody except their own conscience. Of course, freedom is dependent on the possession of conscience. Conscience will be built on a large degree of defined responsibilities of people. Responsibility will be so great that people will base their mutual relations in cooperation at all levels of human relationships, and in that manner they will develop a productive development of society.
In general, this system will rid the people of authoritative pressure and give them freedom to follow their own interests, while at the same time forcing people to mutual respect. Such experience will demystify alienated values imposed by authorities throughout history, and will teach people to live in accordance with their proper nature, which will in turn free them from all types of alienation characteristics of present-day society. People will then realize where real values are. Furthermore, the system will teach people to set their needs in accordance with the possibilities of satisfying them. This is the chief prerequisite for overcoming destructiveness in society, because people who permanently satisfy their needs are not destructive. The proposed system promises a natural, harmonious and highly prosperous development of society.
Once this system is adopted in a smaller community, the
people will make this community a wonderful place to live. When the rest of the
world sees that, it will not have any other choice but to follow suit. The new
system will establish a good and sane society all over the world. It will build
a bright future for humanity. Conclusively, I would like to point out that the
system I have proposed not only represents the best solution for the future of
humanity, but also represents the only good solution. It will bring prosperity
to society regardless of the level of economic development. The biggest problem
is the time needed for people to understand the system, accept and implement it.
January 6, 2009
Overdose: The Next Financial Crisis Director Martin Borgs made a fresh insight into the greatest economic crisis of our age: the one still awaiting us.
Credit As A Public Utility: The Solution to the Economic Crisis - video speech of the former U.S. government official Richard C. Cook, who sharply criticized the American Federal Reserve Bank.
Zeitgeist: Addendum . Video made by Peter Joseph that digs deep into the core of the problems of capitalism. However, the movie fails to provide enough efficient solution to the problems.
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November 13, 2013