Capitalism is built and thrives on, in fact requires and rewards greed–the more excessive the better. By greed we mean the relentless drive for the most profit–wealth appropriated from the labor of others–with the least scruples, in order to reinvest and gain even more profit in a continuing spiral of thievery and rapacity or, plainly put, exploitation and oppression.
BY CAROL PAGADUAN-ARAULLO
Streetwise / Business World
Posted by Bulatlat
Most mainstream media critiques of the US and world financial crisis point to greed as the underlying culprit. The implication is that if the financial CEOs were not so greedy, the meltdown would not have occurred. This kind of analysis however entirely misses the point about the nature of capitalism, especially monopoly capitalism.
Capitalism is built and thrives on, in fact requires and rewards greed–the more excessive the better. By greed we mean the relentless drive for the most profit–wealth appropriated from the labor of others–with the least scruples, in order to reinvest and gain even more profit in a continuing spiral of thievery and rapacity or, plainly put, exploitation and oppression.
In the 1980s, the proponents of the “free market” dogma and “neoliberal globalization” as a policy framework dug up and bannered the argument of laissez faire capitalism that greed ought not be considered a negative attribute since it is a necessary and powerful force for driving social progress. Greed was presented as the crucial motor of the capitalist system.
Of course, it wasn’t called greed then; it was decked out as individuals simply motivated by self-interest. Adam Smith’s theory of the “invisible hand” of the market provided the rationale that the individual drive for self-gain magically self-regulates and transforms itself into the common good.
Certainly in its free competition stage, the capitalist system rewarded those who were most “efficient” and productive; that is, bottom-line, those who could produce the most with the least labor power (read: wages paid). The boom-bust cycle was the system’s way–the proverbial “invisible hand” of the market–not only of solving the problem of overproduction resulting from the anarchic rush to produce the most where the profit was highest; it was also a way of getting rid of the scrupulous and rewarding the greedy.
With the rise of monopolies and their dominance over national governments, free competition capitalism became a thing of the past, but not the drive for maximum profit. Monopolies controlled not only their particular lines of industry but government itself, and thereby the entire economy. But controlling the government and the entire economy did not solve the problem of overproduction which continued to be the result of increasing productivity while constricting the market by minimizing wages.
Simply put, when workers’ and other toiling people’s wages are kept to the minimum while production is pushed to the limit, then a point is reached where the economy stops growing, with more and new products out that can not be bought and no new capital created, because consumers do not have the money to buy the things they make. Manufacturing thus becomes less and less profitable, and capital, like water that has nowhere to go, tends to stagnate and putrefy. Capitalism reached its lowest and deepest slump during the Depression Years of the 1930s.
