invisiblefoxfire:

roach-works:

mckitterick:

phoebenatural:

LITERALLY some of you don’t fucking know what “disposable income is” like i cannot stress ENOUGH that someone who was able to get animal crossing on day 1 of launch or a ps5 preorder that is still only working minimum wage job and/or cannot pay their rent on a monthly basis is NOT your enemy bruv they are NOT “the rich” like PLEASE cement that in your head. 

had to share @rykhafirehand ’s tags:

thank you for boiling off capitalist propaganda to get down to the essence of economics

i’d like to add: you are SUPPOSED TO HAVE DISPOSABLE INCOME.

you are supposed to have enough money for toys and games and vacations. that is what the citizens of a normal and healthy society should be buying without stressing out about if they’re gonna be able to afford to live the next day. you’re not just supposed to have ‘a little bit’ or ‘if you save up’ or ‘sometimes you can treat yourself’, you are supposed to have disposable income, and plenty of it.

I live in central Europe, in a fairly poor country, and have done a lot of jobs that don’t pay well even by local standards. My coworkers often made even less than me and would frequently complain about how the job doesn’t pay enough. But every single one of them would go on vacation every single year, at least once, maybe twice, for at least one or two weeks, with their whole families. Not locally. To another country. To Croatia or England or New Zealand or Spain. Because “this job doesn’t pay enough” isn’t supposed to mean “not enough to survive and live comfortably,” just “we definitely deserve more”. The idea that anyone. ANYONE. would work a full time job and not be able to keep the rent paid or go to the doctor is so absurd to people here that they think I must be exaggerating. They don’t understand when I tell them that my family can’t afford to visit me here despite working full time jobs. They have an idealized version of America in their heads and they all say “but that sounds like the communist days”, “that sounds like North Korea”, “that can’t be true, America is a rich country!”

Around here, if you work at McDonald’s full time, you are legally entitled not only to a very fair minimum wage, but also four weeks of paid time off each year, full medical benefits (including dental), and on top of that, people don’t treat fast food workers like shit here, so they get some basic dignity as well.

You are supposed to have plenty of money not only to meet your basic needs, but to enjoy your life. Even most poor countries manage that. Don’t buy into the propaganda that says “this is how it has to be”. It’s lies.

It’s easy to rally against capitalism these days. After all, many people see the rich get richer, while they get poorer and poorer. Vast corporate interests seem to be interested in nothing more than sucking as much value out of the planet and people while giving back little in return. Money seems to rule politics, with the size of a party’s wallet having more power than their policy or competence. But while it is easy to blame vast and faceless capitalism for the problems of today, there is very little understanding of what it actually is, what it was supposed to do and how it goes wrong.

To understand capitalism you have to go back to Adam Smith and the creation of free market capitalism as an economic theory.

Now the first thing to understand is that in Adam Smiths day, the European powers were busy managing global imperial empires, and they were trying to keep their fingers on everything. Mercantilism, as it was called, was basically a nation’s attempt to try and enrich itself by carefully managing the economic activity of a nation and/or empire. This was done by charging taxes on specific goods coming from specific nations, giving specific companies state enforced monopolies on specific goods, and controlling what local producers could produce and where they could sell their product.

The economy being the complicated Rube-Goldberg device that it is, this mercantile manipulation often had unexpected side-effects. For example, taxes designed to protect local industries also caused prices to rise across half the empire. Not to mention that this kind of economic micromanagement was vulnerable to corruption. A state monopoly for example could make a few people very rich, and the same applied for taxes or tax breaks levied at specific industries or regions. The granting of an official state monopoly could easily become a very sweet plum to be given out in exchange for favors and influence or as a way to help out of friend or family member looking to make some money.

What Adam Smith argued was that the best way to get rich was not to control everything, but rather to let it all go. Instead of trying to control who could sell what to who, have a free market. Anyone can sell anything they want to whomever is willing to buy.

When someone has a monopoly on a good or service, they can sell whatever grade of product they want at whatever price they feel like, and if someone wants to buy that product or service there’s not much they can do but smile and take it. If you want to buy bread and there’s only one bakery you don’t exactly have a lot of alternatives.

In a free market however, you have competition. If you want to buy bread, and you go to a bakery, if you don’t like the quality of the bread or the price it is being sold at you can go to another bakery who has a different price and quality of bread until you find the best deal. The merchant that has the best deal will get the patronage they need to survive, driving the other merchants to either lower their prices or offer better goods if they want to also survive. Prices are thus naturally kept low for buyers and the process weeds out inefficiencies or outright deficiencies in business and production. Instead of trying to build a tree, you stand back and let the seed grow. 

Compared to mercantilism, capitalism worked far better as a means of producing wealth and improving the economy. It also paired very well with the fruits of the industrial revolution and mass production. 

But like all grand theories, Free Market Capitalism didn’t work quite so smoothly in practice.

The first problem, is that while competition is good for the consumer its not actually good for the producers and sellers. If you’re in competition with other businesses and your all lowering your prices to attract costumers, you’re all making less money for the same amount of effort. But if you cooperate, and everyone agrees to all charge the same amount for goods or services than you can all profit. And if there is nothing regulating what merchants can or cannot do than there’s nothing to stop this kind of cooperation. It can also lead to direct attacks against competitors. Instead of cutting your prices you spend the money on hired goons to burn down your competitors store.

The second is that in order to keep a competitive edge, producers and sellers need to find ways of keeping their own costs down. You can’t get something from nothing after all. Now some groups can do this by cutting out inefficient practices, cleaning out corruption in their own organization, or by finding new and more effective ways of doing things. They can also do it by paying suppliers less for their products, cutting the wages of their workers, or by cutting corners on the product itself. (Like say by mixing sawdust in with the bread to save on flour.)

The third problem is inherent in the competitive nature of the free market itself. The Darwinian nature of the free market means that some will succeed and some will fail. The problem is that the ones who succeed are in a better position to compete against any newcomer than tries to move in. A big company has the advantage over a smaller one. The natural result of the competition results in entities that are actually better able to suppress competition. Free Market Capitalism is, in a certain sense, self-defeating.

The irony is, that Free Market Capitalism which was supposed to work best with no government interference, actually needs government interference to survive. In order to maintain competition there are laws in place that prevent companies from conspiring together to form cartels, or the use of violence and intimidation to suppress or control potential competitors. Not to mention the laws that help protect consumers and workers by ensuring that sellers can’t lie about what they are selling and dictating what kind of wages and working conditions need to be provided to workers.

In practical terms, capitalism is an extremely effective economic system. (As, the fall of the Soviet Union and the adoption of Free Market practices by modern communist states would suggest.) But it has its problems, a lot of them. However at its core capitalism is actually very compatible with democratic values. After all, as a consumer I should be able to buy any legal good from whatever store I choose, and if I want to sell something legal I should have the right to sell it to whomever I want.