Can Capitalist systems be reformed? Part 3.

Posted on September 26, 2010

• In: economy/finance | Essays | philosophy | political Artical | professional articles | social articles | Time for Outrage

In the previous two articles, I discussed the foundations of Capitalism, the variations in capitalist systems, communist/capitalism systems, the ideology of private property ownership, and the reforms needed.

This part will discuss the practical political and legal reforms needed if change is to be effective.  

First, let me summarize the last two articles.

One:  Capitalism is based on four  foundations:

1. Private property of means of production;
2. free internal people movement and exchange (products, services…);
3. open free market for commerce; and
4. availability of a vast pool of people willing to work for salary. The main driving force is that the owner of the means of production (the bank, the partners, the shareholder, or the family)  should earn as much as the total salary that all workers receive.  Consequently, an employee is hired when the owner can generate profit, at least as equal to the total salary of the hired worker.

Two:  The foundations of capitalism have proven not to function except within strong richer State institutions, which are almost totally controlled by the capitalist classes.

Three:  The one foundation that all economic systems in developed States share is free global trade, which means the liberty to exploiting the developing countries in natural resources and cheap labor. 

How this work and corollaries to capitalist systems:

First, the developed States are allowed to subsidize their agriculture, but the developing nations are Not to do it and they cannot, even if they realize the need to do it .

Second, the developed States are to flood the markets of developing countries with affordable products with No “legal rights” for the developing nations to increase import taxes in order to safeguarding their own means of productions.

Third, the developed States can find financial resources at low-interest rates with a phone call, but Not the developing nations that have to borrow at at least twice the interest rates.

Fourth, in return for blatant exploitation, the developed States agree “voluntarily” to setting aside a small fraction of their GNP to developing the infrastructures in the poorer States.  Mainly, self-serving their interests to improving infrastructure to facilitating exploitation efficiently.

Fifth:  All “international” institutions such as World Bank, International Monetary Fund, Commerce and Trades are dominated by the US, China, and a few European States. Thus, transparency and access to timely information and intelligence are denied the developing nations.

Sixth:  Financial institutions (banks, insurance companies…) are the real owner of means of production in capitalist systems.  They own 30% of the total wealth of a nation and represent only 1% of the population.  This is NOT acceptable. 

Fact is, financial institutions generate three times more money than the combined tax collected by the government.  This is NOT acceptable. 

Any reforms should first target the level of profit that financial institutions are permitted to generate.  “Effective” interest rates should be lowered accordingly, and tougher regulations imposed of these behemoths.

Community banks with excellent transparency in decision process and lending policies should be the norm.  The current status of financial institutions is generating abnormal profit with No risks whatsoever.  

The aristocratic political family class (representing 10% of the population and hoarding more than 20% of the nation’s wealth or what is called “Old Money”) is the main beneficiary of the current capitalist system dominated by the financial barons.

Seventh:  If capitalism needs salaried people, it must secure the fundamental right to work, a wide range of jobs that satisfy varied opportunity, access to affordable education, safe workplace, universal health coverage, caring for the elderly, and justice for people who worked most of their life for a comfortable retreat.  Has capitalism satisfied the basic needs of its workforce?

Basically seuring Equal starting life to all its kids.

Eight:  States should start taxing according to the number of employees hired and total revenue generated:  These two criteria are the most objective representative of net profit and are easy to investigate.  This gimmick of taxing on “net profit” is an accounting fraud that is not objective or fair.

Companies relocating for cheaper workers must be taxed according to the original “national wages” of the workers.  Companies substituting workers for robots should be taxed according to the number of workers substituted.  States will then be able to subsidize unemployed people, until they find jobs and be imaginative enough to opening up newer job opportunities…

Ninth:  There is a trend for owners with strong ethics and moral standards to including employees as shareholders and participating in management decisions:  These companies are doing very well and not suffering from financial crashes.  Institutions and companies for profit are amoral and do not deal in ethical conducts. 

Ethics and morality are individual characteristics:  The more such individuals gather in groups to reclaiming fairness and justice in actions, the more institutions will be reminded of what is best for society.

Tenth:  Historically, land and private property were the basis for the emergence of the “bourgeois and merchant” classes and which initiated the major leap forward into creating wealth. This system of private ownership lead to the abolition of feudalism and absolute monarchic powers, backed by the clergy.

The structure of private ownership of land and properties materially weakened nobility and clergy and eventually displaced them. Private property of land should be revised…Read part #4.

Eleventh:  Private ownership of land and properties are not currently economically essential for capitalist system to function properly:  Enterprises can lease properties and resume their business as usual.  It is the political ideology behind private properties that is the culprit.

 Private property ownership remains as a reminder that aristocracy image of power must not vanish in order to retaining political power in “democratic” political system.

Twelfth:  Ownership of land and real estates must be legally abolished in order to having a serious chance for political reforms.  Land should be owned by communities and regulated by community councils.

Land and real estates should only be leased for durations, and never owned by individuals and never renewed for any member of the family in order to dissuade political inheritance of images and statuses.  Inheritance of private real estates and money is the main reason for the existence of aristocratic lineage in wealth and politics.

The inheritance mentality encourages sustaining ancient beliefs that the aristocratic class is better fit to rule, guide, and lead simply because this class created the system that perpetuates its interests and egoistic power.

I then offered the required necessary reforms on property ownership.  For example, enterprises may be allowed to renew the lease for specific duration as long as the nature of the business did not change or will not change after the renewal.  For example, transforming from a manufacture to real estates development.

This section of the series will develop on Election processes and laws reforms.

In the current “capitalist democracy”, the judicial system obeys laws decreed by the parliaments (supposed to be representing the common people) that are dominated by the richest and political “aristocracy” classes.. And the executive branch is intrinsically dominated by the highest classes, directly and indirectly.  

This entire political system is called “capitalist democracy” where people have the illusion of electing their representatives for a duration.  After election, people are to behave as spectators:  Any serious disturbances are crushed in the name of Law and Order.

It is imperative that real political power in reformed election laws should  shift the odds for the middle class and lower classes to acceded to legislative and executive positions.

Private enterprises within a free internal movement and exchange of people and merchandise, and supported by a smooth flow of liquid money, as commerce increases and develop, are the basis for creating wealth.  

The State should not be doing business, but regulating laws and order, and securing the well-being of  all its citizen “equal under the law of fairness to work, opportunity, and happiness.”

Thus, the sole reason for the existence for State government is doing politics.  

Mainly, equalizing the odds so that all its citizens live equally in dignity.  So far, the current capitalist system appears to  running smoothly only for the survivors of the holocausts of financial crisis and degradation of normal living conditions.

Election laws and regulations reform targeting all citizens, regardless of gender, ethnic minority, and wealth status must be undertaken relentlessly and closely monitored and supervised by ethical, moral, and just citizens.

First, No fee  charges should be levied for submitting any documents to being candidates to any representative community, council, or State chambers and Houses.  This costly application favors the well-to-do.

Second, contribution to campaigning is strictly done on individual basis and having a fixed limit representing the capacity of lower classes for contribution.  Thus, flow of contribution from rich classes and enterprises are off-limit in election campaign.

Third, stiff penalties should be levied on owners, executives, and managers of enterprises (not the entity) who bribe or press upon employees to get biased toward candidates and extending bonuses at election periods.

Fourth, quota should be imposed on rich and aristocratic classes in number of candidates, commensurate to their representation of the entire population.

Fifth, the campaign should be made easy to comprehend and run, so that many citizens would be encouraged to participate.

Sixth:  All candidates should have equal air time and receive fair contribution from the State to running an equitable campaign and supporting staff.

Seventh:  Prison terms should be attached to officials in any enterprises  or interest lobbying groups who are backing candidates by fraudulent financial means.

These are sample example for fairness in election laws so that many more common people get into the legislative chambers on their own potentials, without feeling indebted to any rich baron or political aristocrat.  

Either power is democratically obtained or anarchy is the end result for the state of injustices in capitalist systems.

Market cannot regulate itself for the interest of the common people.  Rich classes are not just following their interests, but also their overextended egoism to grabbing more power when left at their own volition.

Enterprises have No moral or ethical standards regulating them.  

Only external pressures, for example State politics of fairness to all and justice to all, can make a difference.  

Practicing democracy is hard work and it requires constant vigilance, reflection, and mass actions.