Failure of Capitalism?

Failures of capitalism


Preface:
I am a strong believer in the reasons behind the founding fathers’ establishment of this country and the constitution that defines it. Almost everything needed to make a country strong and its citizens free was included. In the decades since the constitution was accepted as the basic defining document a lot has changed. Technology beyond anything the founding fathers imagined has arisen. Social changes in how people view each other make modern society nothing like the eighteenth century society where the constitution answered the needs.

I have to explain my point of view here so my comments that come later have some validity. I am basically a Democrat leaning strongly toward Libertarianism. This is mainly an opposition to what I see as the Republican approach to the country and the economy. I watch some television news channels for about an hour a day before work in the cafeteria. This happens because I cannot change the channel. At home I refuse to watch the national media because I find myself arguing with people who cannot hear me and whose opinions I have no hope of changing. I have tried to distill my personal doctrine down to a single document and this is the first draft.


Capitalism?

The title should evoke some feelings in people of my generation who were raised under the threat of Communism. I am not a communist. I believe communism could be a good thing for small family groups of less than, say, 100 people who fully believe in it. This group will still have to interact with the capitalism that is the one workable solution for human beings living in a technological environment. The failures I will describe here are the failures that rampant capitalism has dealing with individuals.

Unrestricted capitalism certainly rewards those persons who best understand it and have the personality traits that enjoy the rewards of success. Wealth is, of course, the main reward of capitalism and a self-made rich person is rewarded for his successful efforts. Most ambitious capitalists do not stop when their wealth exceeds anything they can normally expect to need for an extremely comfortable life. I have to believe there is more to this than the accumulation of pure wealth. There is a personal power; public acknowledgement of one’s success; and sense of accomplishment that accompanies success. This drives people much more effectively than the pursuit of wealth ever has.

All of this is a good thing and I thank the inventor of money for providing this outlet for the leadership oriented humans. Without money we would have to establish leadership by pounding down the others around us in order to become their leader - not unlike the Alpha male in a wolf pack. The only failure in this scenario is that the power of money makes a leadership challenge virtually impossible. Leaders bask in their power much longer than the natural world would allow if they were not being propped-up by artificial strength. These unnaturally enhanced leaders can often loose sight of what should be their real contribution to their pack – the safe and comfortable lives of their pack members and the growth and enhancement of society.

We can rationalize all we want but the collapse of the banking industry and the subsequent collapse of the real estate market were caused by unrestricted greed exercised by persons who had lost sight of reality. The people who sought to improve themselves using the tools offered by the greedy industry leaders were not aware of the dangers of borrowing money they couldn’t afford and the lenders did not care if the loans were good or not. On the front end the large numbers of loans created short-term bonuses and apparent success at all levels of the banking industry.
Gleefully ignorant of what could happen (intentionally, I suspect) the leaders enjoyed the benefits of leadership, never considering the fact that all these people were leadership’s responsibility once they were included in the leaders’ packs. The leaders lost sight of the reason to be leader and their money-backed power left them invulnerable to challenge.

I suspect many banking executives never thought at all about the individual families whose lives they were manipulating. I doubt they even think about that now – they likely spend their private moments bemoaning the money and power they could loose. All of them have held their leadership much too long and must be challenged. The only way to pose a leadership challenge is cooperation among prospective leaders and their supporters. The potentially most effective challenge to the general banking industry leadership exists in our government. For too long this challenge has been subverted by the power of money in the form of political contributions and lobbyists. I see a need for financially independent challenge to the current industry arrangement. Re-regulation to limit the problems that got us here and excess personal income tax to limit the personal wealth and power of lost-touch leaders will make leadership challenges more effective.

I know this is contrary to the capitalist mentality and I realize there must be rewards for truly effective capitalist leaders. That said I cannot personally justify bonuses and salaries exceeding six figures for people who have lost the right of leadership by loosing sight of reality. If the organization feels the contribution by their high-priced leader warrants a substantial reward give that reward to charities that help people being ignored by the policies that produce the wealth. Tell the country that “John Doe bank has donated three million dollars to the American Cancer Society in the name of our CEO Doe John. This is because his leadership and vision has increased the wealth of our stockholders by thirty-seven percent in the past fiscal year.” When a single person has a personal wealth exceeding [an amount to be determined by vote or government] there is no real reason to give him more. Recognize his accomplishments and make sure he has the power to continue his good work. Increasing his wealth beyond a certain point helps no one – not even him.



This is the first stage of this document. I will continue with it in another issue.

If you want to see more of my ramblings visit www.s-p-a-r.blogspot.com
or www.lifewithindustry.blogspot.com .