Former Professor of the Harvard Business School, and American author, David Korten, is famous for penning the words, “Capitalism has defeated communism. It is now well on its way to defeating democracy.”
Show that statement to any business owner, investor, or trader that’s doing well for themselves, and they may burst out laughing.
Do you understand the term capitalism? Do you realize what it stands for? Not only for the foundation of the global economy but its influence on every culture around the globe?
Capitalism is what spurred invention and innovation, bringing humankind visions of industry, commerce, and the STEM fields to life.
Capitalism is at the very heart of the most important American value, and the one our founding fathers fought to protect with their very lives – Freedom.
Without capitalism, we may still be lost amid a socialist nightmare – and ask the last five or so nations that gave that a try, how it ended up working out for them. Venezuela is the most recent that comes to mind.
Capitalism rewards people for contributing to society by offering them an incentive. It’s this incentive that breeds competition, and the same incentive that drives entrepreneurs into the free market to establish their legacy.
Capitalism relies on a few principles to work, and one of them; is abundance.
Unfortunately, this is where things start to skew from the theoretical to the reality of application – we are hesitant to say execution due to the socialist reference previously made.
The Evolution of Modern Capitalism – Greed and Fear
- 1 The Evolution of Modern Capitalism – Greed and Fear
- 2 Capitalism believes in two core concepts; the free market, and sound money.
- 3 Where did we go wrong with this concept, and what is the future of capitalism?
- 4 Are We in “Late Stage Capitalism?”
- 5 Late Stage Capitalism Explained
- 6 Why Late-Stage Capitalism is Making a Comeback
- 7 Is it too Late to Fix Late Stage Capitalism? – The Impact of Crony Capitalism and Corruption
- 8 The Capitalism Conundrum – Do You Really Want a Revolution?
While capitalist values may be at the heart of the American nation, they have sure come a long way from the days of John Adams, Benjamin Franklin, and George Washington. Would they even recognize American values today?
It was around the time of the creation of the Federal Reserve, and the need to fund the war, that capitalism started to shift from its original thesis. It was war, first with the World Wars, and then the subsequent proxy wars to follow, that money started to change.
Capitalism believes in two core concepts; the free market, and sound money.
The free market allows for a competitive arena for economic expansion through consumer spending, and investment, two of the hallmarks of any countries GDP in modern day standards. The free market allows people to make it from nothing, it’s the system that allowed Steve Jobs to build Apple, and Jeff Bezos to found Amazon.
Sound money is money that is an asset, and it’s not a paper debt instrument like the fiat U.S Dollar, or any of the world’s modern “free-floating” currencies claim to be. There was a time when the “Gold Standard” meant that a dollar note represents a portion of gold in a vault at a bank.
Now it’s a debt instrument that gains its value from being an instrument with which people need to pay taxes. Moreover, if you don’t pay your taxes, well, let’s say that won’t go very well for you. Ask Blade the Vampire hunter about that.
The changes in the founding principles of capitalism and its values are no longer what they used to be at the start of the 1900s. However, expecting that things won’t change over the course of centuries is as ridiculous as the evolution of capitalism itself. The only constant in life is change, and things are always evolving, whether we like it or not.
Where did we go wrong with this concept, and what is the future of capitalism?
Unfortunately, one of capitalism’s flaws is that it fails to take into account the effects of money and power on the human psyche. While it is not true that everyone who amasses wealth and power turns out to be a despot or a tyrant, it’s clear that one of the primary driving forces behind all despots and tyrants is amassing wealth and power.
Greed and fear are two compelling emotions, and try as we might when temptation presents – the statistics show that most of us fold.
Call it an instinctual, primal flaw in our thinking, but greed is something that can infect even the most astute mind.
As a result of our behavior around money, most of us find that it controls us rather than provides us with the freedom we need to do the things we want in life. Statistics show that more than 36-percent of Americans live paycheck to paycheck, with millions relying on food stamps and government-sponsored programs to feed and clothe themselves and their families.
At present, over 28,000 homeless people are walking the streets of San Francisco, shooting up intravenous drugs in the alleyways right next door to some of the most expensive real state in the country.
Take a trip downtown to Silicon Valley in your new Tesla, and the chances are you’ll see plenty of homeless people pushing carts around the roads.
Are We in “Late Stage Capitalism?”
Werner Sombart coined the term, “late capitalism” around 1903, with the Marxist Ernest Mandel popularizing it in the 1960s as a reference to the period after the Second World War as Multinational conglomerates gained strength.
The term has steadily appeared with more frequency in the years since, with 274 appearances in English-facing news programs over the world in 2018, and many mentions of it in social media.
Today, “late stage capitalism” refers to the social and financial inequities of capitalism in the technological age. The term highlights the hypocrisy and outright foolishness of capitalism as it hurtles towards its self-fulfilling prophecy of doom.
Late Stage Capitalism Explained
Late stage capitalism describes the distortion of the classes, from the disenchanted eyes of the wealthy one percent living in their estates and flying private, to the desperate plight of the poor and homeless.
The wealth gap is a real thing, look at a graph of homelessness and personal bankruptcies over the last two decades, and you’ll see that they’re becoming exponentially out of control. Drug use is on the rise, and moral decay is eating away America like cancer, but no-one wants to admit what’s going on in the general population.
Capitalism no longer provides a free market. Algorithms run the stock and FX markets, bleeding retail investors dry through front running and spoofing, and then pay off the SEC to turn a blind eye to their violations.
When you have the money, capitalism is your best friend, and it allows you to open doors to business, develop influence with politicians, and sway the favor of people in power, all with the end goal of amassing more wealth and power for yourself, at whatever the cost. Wait, this is starting to sound a lot like fascism.
The oligarchs and the politicians remove the level playing field of the free market, and replace it with a mountain range, from which they sit on lofty perches as “masters of the universe.” Corporations poison the land and the water in the name of profit, and nuclear reactors meltdown – with the governments responsible, sweeping the mess under the carpet.
News media no longer serves to report on the inequalities of the wealth divide, or government corruption. Instead, they choose to report on political agendas, blindfolding the public from the truth.
Government agents march into embassies and arrest real journalists. They set them up with false charges for exposing their covert operations. Manipulating and spying on their citizens, all while promising to protect whistleblowers before they turn around and throw them to the wolves.
Here are a few examples of late-stage capitalist lunacy.
- Tiffany marketing an “eco-friendly” sterling-silver straw for $375
- Gucci is selling sneakers with a “worn-look” for $700.
- Nordstrom is selling fake muddy jeans for $425.
- A $100 cheeseburger or a $1,200 bottle of glacier water.
- A new study that proves electric vehicles are more damaging to the environment than fossil-fueled automobiles.
- Congress refuses to fund failing infrastructure or feed and house the nations homeless, but sees the need to allocate the military with a budget of $700-billion.
- The world’s richest man – Amazon founder and CEO, Jeff Bezos, could buy every homeless American a home, and still, have a personal fortune in excess of $19-billion.
Reddit Late Stage Capitalism
For further examples, look the Late State Capitalism Reddit
Why Late-Stage Capitalism is Making a Comeback
According to journalists, the phrase “late-stage capitalism,” is gaining traction in the media due to the ever-increasing wealth gap, and the increase of internet usage in the middle and lower income classes. People now have access to information that exposes the defects of capitalism, and the effects of political and elitist interference in the monetary policy of a country. As a result, people want to learn more about what they can do about the situation in which they find themselves entrenched.
Popular culture is also starting to pick up the issue, founding grassroots movements like “Occupy Wall Street.”
New leaders like New York’s Alexandria Ocasio-Cortez, are gaining an audience on social media due to their radical policies that promise to take the wealth back from the top 1-percent and distribute it to the poor. This type of political rubbish sounds like music to the ears of those desperate weak and gullible people looking for a handout.
However, giving out free stuff isn’t possible, and this is where we run into the critical principle of Abundance again.
Abundance suggests that there is more than enough for everybody. The term indicates that there is an unlimited supply of anything you want in life, you can do out and take as much as you like, all you need to do is tap into the system.
Unfortunately, in the real world, resources are finite and limited, and while there may be enough for everyone, some choose to hoard more for themselves and not care about what the rest of the people have.
Capitalism is dead. There are no more free-markets, nor sound money for trade. Now, all we have to look forward to is rising levels of debt and further limitations on our financial and personal freedoms.
Is it too Late to Fix Late Stage Capitalism? – The Impact of Crony Capitalism and Corruption
Capitalism strayed from its path many decades ago when governments turned from sound money to fiat. The introduction of political influence in business meant that companies could do whatever they wanted to increase their shareholder profits.
Lobbyists on Capitol Hill sway the favor of politicians, and companies become untouchable. Companies receive substantial tax breaks and ship their profits offshore, while the poor and middle-class face a crushing tax burden at the end of every financial year.
The revolving door between Wall Street and the banking sector allows former Federal Reserve Chairmen to charge speaking fees of $500,000, and earn chairs on the boards of algorithmic trading firms.
The Pentagon continues to siphon money from the Federal budget, and the bank accounts of shareholders of Boeing, Lockheed Martin, and other weapons manufacturers continue to swell.
Is it too late to save us from the effects of corruption and greed that led us down the path in which we find ourselves sinking? One would like to think so, but if we’re realistic about it, it’s more likely to continue to progress.
The wealth gap will continue to grow, and the corporations will continue to seize more power. Nothings stopping the military industrial complex from achieving its goals, and woe the person that dares threaten the power of the government.
The Capitalism Conundrum – Do You Really Want a Revolution?
Many people like to tout the fact that they want to see capitalism fail. While this system has plenty of flaws, there’s no going back anymore. The recent TV show, “Mr. Robot,” depicts a hacker that brings down the world’s financial system.
What the hacker thought would save the world – turned out to be the start of humanities worst nightmare. Can you imagine the chaos and despair if the power grid had to fail? What if you woke up tomorrow and the government had confiscated your savings to pay the national debt?
While these scenarios may seem unlikely, there’s still an outside chance threat they may happen. Just ask the citizens of Cyprus when the banks confiscated 50-percent of savers deposits with balances of over 100,000 Euros.
While late-stage capitalism will eventually come to an end, you can be sure of one thing – it won’t be a soft landing.