5 Reasons Capitalism Has Failed

[marmar]

The Smirking Chimp / By Bob Burnett

5 Reasons Capitalism Has Failed
The root cause of our recent turmoil is the failure of the dominant economic paradigm -- global corporate capitalism.

August 21, 2011 |


We live in interesting times. The global economy is splintering. U.S. voters hate all politicians and there's political unrest throughout the world. The root cause of this turmoil is the failure of the dominant economic paradigm -- global corporate capitalism.

The modern world is ruled by multinational corporations and governed by a capitalistic ideology that believes: Corporations are a special breed of people, motivated solely by self-interest. Corporations seek to maximize return on capital by leveraging productivity and paying the least possible amount for taxes and labor. Corporate executives pledge allegiance to their directors and shareholders. The dominant corporate perspective is short term, the current financial quarter, and the dominant corporate ethic is greed, doing whatever it takes to maximize profit.

Five factors are responsible for the failure of global corporate capitalism. First, global corporations are too big. We're living in the age of corporate dinosaurs. (The largest multinational is JP Morgan Chase with assets of $2 Trillion, 240,000 employees, and offices in 100 countries.) The original dinosaurs perished because their huge bodies possessed tiny brains. Modern dinosaurs are failing because their massive bureaucracies possess miniscule hearts.

Since the Reagan era global corporations have followed the path of least resistance to profit; they've swallowed up their competitors and created monopolies, which have produced humongous bureaucracies. In the short-term, scale helps corporations grow profitable, but in the long-term it makes them inflexible and difficult to manage. Gigantism creates a culture where workers are encouraged to take enormous risks in order to create greater profits; it's based upon the notion that the corporation is "too big to fail." ............(more)

The complete piece is at: http://www.alternet.org/economy/152118/5_reasons_capitalism_has_failed/

[Owlet]

1. The goal of capitalism..

..is the accumulation of wealth. Period. There is no innate social responsibility, moral imperative, invisible hand or anything else. The five-letter word for capitalism is Greed. We are living in the End Times - not the one in Revelations - but the period distinguished by the inevitable concentration of wealth in fewer and fewer hands due to unregulated, unrestricted global acquisitiveness.

Feudalism Redux

[deutsey]

2. +1

[xchrom]

3. recommend

[unblock]

4. there's really just ONE reason why it's gone off the rails

that's because the genius of capitalism is that greed can be harnessed and channeled into productive activity ***IF*** rules are set up so that the only way to satisfy greed is by doing economic good. if the only way to profit is by discovering, inventing, and distributing goods and services to those in need, then it leads to good. greed itself is not good, but capitalism can channel greed into good provided that the rules are set up properly.

what has happened is that the rules have been bent, twisted, and discarded so that greed is unchained. now, powerful people and institutions can profit not by doing economic good, but by doing ANYTHING they can get away with. this is bad in the way that greed has always been bad. when companies are allowed to damage uninvolved third parties (pollution) or brainwash or disinform their consumers (leading to irrational decisions) or undermine competition through improper barriers to entry (selling at a loss to keep competitors out or tangling them up in baseless litigation) then this does not produce the desired result of capitalism.

i would argue that this is NOT capitalism at all, it is simply financial anarchy. everyone understands that you can't just rob people, yet they fail to understand that brainwashing you into buying something you don't need is hardly any different.

football needs referees to enforce the rules. without the referees, it's just not football, it's mayhem.
our economy is devolving into a game of football where the referees have either been bought off or have simply left the field.