Can Capitalism be reformed? Part 2
Posted on September 25, 2010
This part will discuss ownership of private land properties in capitalist systems and the practical political and legal reforms needed if change is to be effective.
In the first part I wrote:
One: Capitalism is based on four foundations:
1. Private property of means of production;
2. free exchange (products, services…);
3. open free market for commerce; and
4. availability of a vast pool of people willing to work for slave 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 in the business.
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 State institutions, which are almost totally controlled by the capitalist elite classes, especially the Old Money classes that generated the wealth in previous slave working system.
The judicial system obeys laws decreed by parliaments that are dominated by the richest and political “aristocracy” classes, and the executive branch is intrinsically dominated by these classes, directly and indirectly.
This whole 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.
Three: The previous article described Communist economic systems (Russia and China) and then, capitalism in Western European social-democratic States.
Four: The one foundation that all economic systems of developed States share is free global trade; which means the liberty to exploiting the developing countries in natural resources and cheap labor.
The developed States are allowed to subsidize their agriculture, but the developing nations are not to do it and they cannot, even if they witness the need to do it .
The developed States are to flood the markets of developing countries with affordable products with No “legal rights” for the developing nations to increasing import taxes in order to safeguarding their own meager means of productions.
The developed States (colonial powers) can find financial resources at low-interest rates (at 3%, even if they accumulated far higher sovereign debts than the poorer States), but not the developing nations( at least over 7% interest rates on loans
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 and facilitating exploitation and transport of raw materials efficiently.
Five: All “international” institutions such as World Bank, International Monetary Fund, Commerce Trades are dominated by the US, China, and a few European States. Thus, transparency and access to timely information and intelligence are practically denied the developing nations.
Six: 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.
Small community banks with excellent transparency in decision process and lending policies should be the norm.
The current status of multinational financial institutions is generating abnormal profit with no risks whatsoever.
The aristocratic political family class (representing less than 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.
Seven: 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?
Eight: States should start taxing according to the number of employees hired and net revenue (not based on financial sheet profit): These two criteria are the most objective representative of net profit and easy to investigate.
This gimmick of taxing on “net profit” is an accounting fraud that is not objective or fair.
Companies relocating their factories or main business 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 be able to subsidize unemployed people until they find jobs and be imaginative enough to opening up newer job opportunities.
Nine: There is a trend for owners with strong ethics and moral values 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 reclaim fairness and justice in actions the more institutions will be reminded of what is best for society.
Land and private property are 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 monarchical powers that were backed by the clergy.
The structure of private ownership of land and properties materially weakened nobility and clergy and eventually displaced them.
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 retain political power in “democratic” political system.
Ownership of land and real estates must be legally abolished in order to have 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 and never owned by individuals or enterprises. Why?
First, 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.
Second, land and properties leasing laws prevent inheritance problems and its successions of hate, suffering, and legal procedures.
Land and real estates should be leased for a period No longer than 30 years and never renewed for any member of the family in order to dissuade political inheritance of images and statuses.
Leases can be extended for three years under particular circumstances. For example, father, mother, and grandparents have the right to die in their property and not experience humiliation and exacerbation at old age. I guess children will make sure that their folks remain at home and not be sent to specialized rest homes in order to enjoying a free location.
Third, leases on unused properties or uninhabited could be canceled. Consequently, homes will be properly maintained and the homeless people will have the availability of shelter in unoccupied properties. Families with crippled or handicapped children will have priority for occupying uninhabited properties.
Fourth, leased land and real estates offer greater opportunities for the newer generations to different life-style in habitat, sustainable energy, and better community life.
Fifth, 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 manufacturer to real estates development is Not acceptable.
The third part of this series of articles will develop on election processes and laws reforms that would shift the odds for the middle class and lower classes to acceded to legislative and executive positions.
Note: You may read about the Real Estates bubble that won’t burst and is converging to another financial crisis in https://adonis49.wordpress.com/2010/10/24/obama-praying-mantra-next-f-crash-not-on-my-watch/
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