"...under the current capitalist model, the performance of big companies, from time-to-time meet a dead end, because, at some point, the continuous seeking of profit in and of itself, with no concern for how the success of the business relates to progress of people in communities - aside from the latter’s consumption - and how people live, will, invariably, lead to the dilemma where the “market” must necessarily reach a 'saturation point',.."
Dear friends,
The big banks decided back in the late 19th Century to allow businesses to depend on them for capital (called finance capital), rather than the latter getting their own capital (called industrial capital) by earning it. Actually, only the largest companiies of certain industries were given the privilege of getting finnce capital. It was a neat trick, because it meant that no one smaller could compete with them, since they (big companies) did not have to worry about waiting for revenues to keep daily operations, buying new equipment, setting up subsidiaries, or providing paychecks for their workers. As a result, monopolies were formed that made sure that there was no "free market".
Yet, under the current capitalist model, the performance of the big companies, from time-to-time meet a dead end, because, at some point, the continuous seeking of profit in and of itself, with no concern for how the success of the business relates to progress of people in communities - aside from the latter’s consumption - and how people live, will, invariably, lead to the dilemma where the “market” must necessarily reach a “saturation point”, as it were, where there are either less or no customers (i.e., consumers), since there will come a time when people will not buy, if for no other reason than the fact that everyone has all of that particular items that they want. Hence, the constant wars in which, especially, the US, Britain, France, and Germany engage, so that they can establish new markets (i.e., new consumers).
In other words, you cannot have an infinite growth of the market, because there are only so many consumers who will want a product. Then what do you do? People who are really thinking about the future of humankind have to change the values of society, so that the market reflects those values, instead of vice versa (which is where the US ad other big capitalist nations now stand). But that means giving up either power or wealth to maintain legitimacy. To be sure, the Bush family and others shun that idea.
G. Djata Bumpus
Saturday, July 6, 2013
Subscribe to:
Post Comments (Atom)
1 comments:
Good post. I want to draw some clarifications to capitalism.
Capitialism is the competition field between companies/industry's for the acquisition of
resources, power, and (as you mention) capital from the market.
Excellent mention of how monopolies have developed. The paradigm shift I believe
that capitalism (or socierty as a whole) has never taken into consideration, is that the market controls everything- not banks.
Banks (in my opinion) are only the tools used to inject or stimulate responses in the flow of money. A balance of dollars equates to a good circulation of money. A low balance of dollars equates to a recessionary period where only those with dollars spend money. An over allocation of dollars by banks results in inflation and the dollars have restricted value, and no one uses them. In each case the stimulation is affected and so is the reaction within markets/individual spending patterns.
Exaggerated example of how markets can control/ influence the economy:
If for instance a segment of society/market took all of its money and directed it to the smaller companies or those of their communities vs. larger companies; the larger companies have no choice but to fall (even if given 'paper gold' assistance by banks). We saw this as the Auto industry in America tanked in 2008. Poor accounting measures mixed withlack of spending by consumers led to their downfall, but banks propped up by government loans (taxpayer dollars) kept these businesses afloat.
Consequently the capitalistic model is the same for large or small companies. COmpetition always exits and so does the ability to earn capital/ profits. The ever changing element is the market and competitive advantage within that market. If the market decides a different product is better it will buy it. Capitalism does not operate in a vaccum- it is organically evolving and changing- shifting. The benefit to this is smaller companies can shift quicker than the big giants.
I do not think I have ever seen a company completely dominate an industry due to the fluctuation in customer needs being so diverse. Also takinginto consideration the company's ability to keep pace with quality and costs. Someplace somewhere individuals are wanting a different product or have a different evolving needs. This is the beauty of capitalism is it allows companies to develop to these changes needs- even when one company may appear to have a cap on the industry.
Regards,
Black s.l.a.b.
Post a Comment