Why most people believe in capitalism

(CALGARY, Alberta) - Capitalism is fundamentally about the production, distribution and consumption of goods. By itself, this is a neutral and harmless reality.

The harm enters when production alone, becomes capitalism’s raison d'etre. Capitalism “works” because capitalists risk their capital in an enterprise in the hope/expectation that they will receive an increased return (profit) on their investment. Again, this is not an unreasonable expectation.

But profit implies growth which means that production must always be increasing and increased production necessitates increased consumption.

Increased consumption means a continually expanding economy. If consumption slows, then production is pulled back, resulting in fewer jobs and, consequently, decreased consumption. Over the short term this can be just a blip but, if it goes on too long, the economy goes into a recession and, in the worst case, a depression like that of the 1930s.

This potential was noticed in 1960 by Vance Packard in his classic analysis The Waste Makers, when he wrote

When he wrote, the boom of the 1950s was just taking off and, although his book was a best seller, his theme was not heeded.

Let me clear up one point of confusion, that of between capitalism and free enterprise. They are not the same thing although commonly confused. Wal-Mart and Exxon are capitalism; Salem-News.com is free enterprise. Competition among individuals or groups of individuals is natural and benefits society. In capitalism, there is no competition in the sense that ordinary people know it. It's just financial behemoths uneasily co-existing and ordinary people play no role in their existence--except as they may be collateral damage when there are layoffs or changes in the business model. In just one of many examples, UBS announced last month that it would eliminate 3,500 jobs after poor second-quarter results. Those people? Just the flotsam and jetsam of capitalism in action.

Although the Jesuits deny it, an aphorism attributed to them says: Give me a child at six and I will have him for life. Without this truism, capitalism as we know it could not exist. Capture the children and all else follows.

While the U.S. has only 4.5% of the world’s population, America’s children consume 45% of global toy production. Sales to the four- to twelve-year-old market was $6.1 billion in 1989. Today, it’s in the neighbourhood of $30 billion, and increase of nearly 500%. Teen spending is even greater—$170 billion/year.

Children are the most heavily targeted by advertisers. Children as young as two can identify brand names and in the U.S. one quarter of preschool children has a TV in their room where they are bombarded by up to 40,000 commercial messages per year.

The average child spends about three and a half hours per day in front of the TV and American businesses spend an estimated $15 billion/year on advertising and marketing to those children who then make about three thousand requests for specific products and services each year. By the first grade, children can identify up to two hundred brands.

Every parent is woefully aware of this phenomenon. At the supermarket there is the incessant demand for specific breakfast cereals, etc. If a family goes to eat, there is the incessant demand that they go to McDonald’s or Wendy’s, etc. This is capitalism in action.

In 1931 the economist E. H. Chamberlin described advertising (which was still in its infancy), as:

The child, growing into an adult, remains helpless in the grip of never ending, and not understood motivations to consume. It would be reasonable to expect that part of the educational system would work towards teaching people about advertising so they can become responsible consumer-adults.

You would think it reasonable, but a look at the nation’s school boards contradicts that hope. A simple examination of school boards anywhere in the country will find them to be almost exclusively comprised of lawyers and business people—all of whom have a vested interest in keeping the production lines humming.

If it were up to the cupidity alone of the consuming public and they were isolated victims, you could say it’s a sad scenario, but what can you do? But it goes beyond that.

Global warming as a result of increased consumption is real. Consider the climate-sceptics and naysayers and just follow the money. You’ll find in every case that they are influenced by industrial interests (e.g., Rick Perry and the oil industry) or they are willing or unwitting shills for special interests (e.g., almost all right wing journalists).

With these thoughts in mind, a recession or even a Depression, has its good side. If enough people are forced, advertising or no, to significantly reduce their consumption, perhaps global warming can be slowed enough for long enough so that economic policies can be revamped to accommodate this new reality.

(The thoughtful reader will have noticed that I haven't even mentioned the impact of capitalism on the military.)

So, finally, if you are still not persuaded and continue to trumpet the wonders and benefits of capitalism, then you are almost certainly condemning your grandchildren to lives that the philosopher Thomas Hobbes described as “nasty, brutish and short.”

Daniel Johnson

Deputy Executive Editor, Salem-News.com

Born and raised in Calgary, Alberta, as a teenager, Daniel Johnson aspired to be a writer. Always a voracious reader, he reads more books in a month than many people read in a lifetime. He knew early that in order to be a writer, you have to be a reader.

Another early bit of self-knowledge was that writers need experience. So, in the first seven years after high school he worked at 42 different jobs ranging from management trainee in a bank (four branches in three cities), inside and outside jobs at a railroad (in two cities), then A & W, factories and assembly lines, driving cabs (three different companies), collection agent, a variety of office jobs, John Howard Society, crisis counsellor at an emergency shelter, salesman in a variety of industries (building supplies, used cars, photocopy machines)and on and on. You get the picture.

In 1968, he was between jobs and eligible for unemployment benefits, so he decided to take the winter off and just write. The epiphany there, he said, was that after about two weeks, “I realized I had nothing to say.” So back to regular work.

He has always been concerned about fairness in the world and the plight of the underprivileged/underdog. It wasn’t until the early 1990s that he understood where that motivation came from. Diagnosed with ADD (Attention Deficit Disorder) he researched the topic and, among others, read a book Scattered Minds by Dr. Gabor Maté, an ADD person himself. Maté wrote: "[A] feeling of duty toward the whole world is not limited to ADD but is typical of it. No one with ADD is without it."

As a professional writer he sold his first paid article in 1974 and, while employed at other jobs, started selling a few pieces in assorted places. He created his first journalism gig. In the late 1970s, when the world was recovering from a recession, the Canadian federal government had a job creation program where, if an employer created a new job, the government would pay part of the wage for the first year or two. The local weekly paper was growing, so he approached the publisher and said this was an opportunity for him to hire a new reporter. The publisher had been thinking along those lines but cost was a factor. No longer.

Over the next 15 years, Daniel eked out a living as a writer doing, among other things, national writing and both radio and TV broadcasting for the CBC, Maclean’s (the national newsmagazine) and a host of smaller publications. Interweaved throughout this period was soul-killing corporate and public relations writing.

It was through the 1960s and 1970s that he got his university experience. In his first year at the University of Calgary, he majored in psychology/mathematics; in his second year he switched to physics/mathematics. He then learned of an independent study program at the University of Lethbridge where he attended the next two years, studying philosophy and economics. In the end he attended university over nine years (four full time) but never qualified for a degree because he didn't have the right number of courses in any particular field.

In 1990 he published his first (and so far, only) book: Practical History: A guide to Will and Ariel Durant’s “The Story of Civilization” (Polymath Press, Calgary)

Newly appointed as the Deputy Executive Editor in August 2011, he has been writing exclusively for Salem-News.com since March 2009 and, as of summer 2011, has published more than 160 stories.

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Chris October 7, 2019 9:01 am (Pacific time)

Competition does not benefit us. You might like to read or listen to Alfie Kohn on the subject.

Hank RUARK September 28, 2011 3:12 pm (Pacific time)

Alberto: Thanks for verifying my previous evaluation by your uninformed, naive, arrogant dialog. IF you ever make it through U/O, try ten yrs. with state dept. of ed. with visits every week to school boards and schools with living kids in them...then you have base of experience from which to speak. Otherwise shut up, learn if you can, and try to grow up to college average...

Kris September 22, 2011 10:41 am (Pacific time)

Attention Kris, Sean K., Christopher Edwards, David Fisherman, et al. My heart goes out to you as you struggle with Multiple Personality Disorder. I hope you get the help you need.

Mike September 21, 2011 3:45 pm (Pacific time)

I have zero tolerance for ad hominem posts.

COLLI September 20, 2011 10:19 pm (Pacific time)

Dan, I do not believe that capitalism in and of itself is bad. As practiced by reasonable people, capitalism is actually very good. Greed however is quite another story. If individuals were not willing to invest in starting businesses, fewer jobs are created. The idea of growth to infinity is absurd. To make a reasonable profit from ones investments is not bad to create products or supply services that meet the existing demand is also a good thing. Greed does not have to go hand-in-hand with capitalism. The problem, as I see it, is greed. When the world banks (you know, the owners of the corporations) demand ever more profit and control the economy and the government (as they do), greed will run roughshod over brotherhood, compassion, and common sense. That is exactly where we find ourselves now. Greed infects the masses as well as the banks. Greed is like a cancer. It grows geometrically . . . at least it certainly seems to. Regardless of whether we agree on what the real problem is, I happen to think this was a good article and many of your points will (or at least certainly should) get people thinking and that is something which must happen or we will devour ourselves as a country.

And not just the U.S., but Western civilization as whole, and now nations like China and India want to emulate our consumption levels which of course is a guarantee of planet death. Thanks for your comment.

Anonymous001 September 20, 2011 7:54 pm (Pacific time)

Economics and finance are related sciences. Wrong again, daddy-o.

You may make the assumption that I am not an economist. You may also make the assumption that I am trolling. You should definitely assume that others who read your inane comments and put-downs of others realize that your bullying comes from some deep-seated issues YOU have. Have you EVER gotten along well with others who disagree with you? I respect Tim's and Bonnie's stories and Tim will realize when he is being overly aggressive with his comments. You are always predictable.

Because you're argument has no substance, all you can offer is an ad hominem attack. Now, that's predictable.

Anonymous001 September 20, 2011 7:26 pm (Pacific time)

I predict you will never admit you are wrong, Dan. That is based on my scientific observations of your demeanor. I also predict with certainty that your behavior and response to the readers of this website lose it readership everyday. --- And, just so you know, Finance is a discipline of economics and finance makes predictions EVERY DAY. Your assertions are as dry as the weather in Texas this year.

Finance is based on mathematics so of course it is unassailable. But economics is subject to GIGO.

Further, there are no scientific observations of my demeanour, only your opinions which, of course, are fallible.

I think you're trolling.

Anonymous001 September 20, 2011 7:12 pm (Pacific time)

Actually, we economists make predictions all the time.

But you go ahead with your fallacious arguments based on no real education.

If economics could predict anything, why is the world economy in such a mess? Oh, I know, policy makers don't listen to your predictions.

If you really are an economist, give our readers some verifiable credentials, starting with your real name.

Ron Adams September 20, 2011 6:30 pm (Pacific time)

I attempted to post the below, maybe I have problems with my server? Hopefully it gets through for it does reflect quite smartly with comments in this article. Of course we are talking about a physical science that is fully replicable for those who understand what they're doing. An impossible task for the untrained, that's for sure. "Exclusive: Nobel Prize-Winning Physicist Who Endorsed Obama Dissents! Resigns from American Physical Society Over Group's Promotion of Man-Made Global Warming...Giaever was one of President Obama's key scientific supporters in 2008. Giaever joined over 70 Nobel Science Laureates in endorse Obama in an October 29, 2008 open letter. In addition to Giaever, other prominent scientists have resigned from APS over its stance on man-made global warming. See: Prominent Physicist Hal Lewis Resigns from APS: 'Climategate was a fraud on a scale I have never seen...Effect on APS position: None. None at all. This is not science'

Giaever, a former professor at the School of Engineering and School of Science Rensselaer Polytechnic Institute, has become a vocal dissenter from the alleged “consensus” regarding man-made climate fears. He was featured prominently in the 2009 U.S. Senate Report of (then) Over 700 Dissenting International Scientists from Man-made global warming. Giaever, who is a member of the National Academy of Sciences and won the 1973 Nobel Prize for Physics.

Giaever was also one of more than 100 co-signers in a March 30, 2009 letter to President Obama that was critical of his stance on global warming. See: More than 100 scientists rebuke Obama as 'simply incorrect' on global warming: 'We, the undersigned scientists, maintain that the case for alarm regarding climate change is grossly overstated' " http://www.climatedepot.com/a/12797/Exclusive-Nobel-PrizeWinning-Physicist-Who-Endorsed-Obama-Dissents-Resigns-from-American-Physical-Society-Over-Groups-Promotion-of-ManMade-Global-Warming

It’s clear you’re just trolling. So-called Climate-gate is a non-story.

The American Meteorological Society says that the incident did not affect the society's position on climate change and said, in a statement: “For climate change research, the body of research in the literature is very large and the dependence on any one set of research results to the comprehensive understanding of the climate system is very, very small. Even if some of the charges of improper behavior in this particular case turn out to be true—which is not yet clearly the case—the impact on the science of climate change would be very limited.”

The American Geophysical Union reaffirmed their 2007 position statement on climate change "based on the large body of scientific evidence that Earth's climate is warming and that human activity is a contributing factor. Nothing in the University of East Anglia hacked e-mails represents a significant challenge to that body of scientific evidence..

The American Association for the Advancement of Science (AAAS) reaffirmed its position on global warming and that the illegal release of private emails stolen from the University of East Anglia should not cause policy-makers and the public to become confused about the scientific basis of global climate change. Scientific integrity demands robust, independent peer review, however, and AAAS therefore emphasised that investigations are appropriate whenever significant questions are raised regarding the transparency and rigour of the scientific method, the peer-review process, or the responsibility of individual scientists. The responsible institutions are mounting such investigations." Alan I. Leshner, CEO of the AAAS and executive publisher of the journal Science, said "AAAS takes issues of scientific integrity very seriously. It is fair and appropriate to pursue answers to any allegations of impropriety. It’s important to remember, though, that the reality of climate change is based on a century of robust and well-validated science."

All the above is from Wikipedia with verifiable sources.

I checked your link to CFACT and find that there is no one there with any particular scientific training or experience. Cofounder David Rothbard only has a Bachelor of Arts degree from a third tier university. The group is also funded, in part, by automobile and oil industry giants like EXXON and DaimlerBenz.

Anonymous001 September 20, 2011 5:05 pm (Pacific time)

I think your dislike for economics is because you do not understand the science. Your jabs are apparently not understood, either, because they do not support your position, Dan. Sorry, but economics and finance are required for efficient decisions to be carried out in this world.

Who said I dislike economics?

And, again, I repeat my assertion that economics is not a science. Reputable economists agree with that conclusion. A science is able to make predictions. The old saying is still true: If you laid all the economists in the world end to end, they still wouldn't reach a conclusion.

Alberto September 20, 2011 9:14 am (Pacific time)

I only approve comments that make sense and are based on facts. Before you post again, get out your dictionary and look up "sophomoric". Thanks for playing.

Alberto September 19, 2011 9:04 am (Pacific time)

This is Alberto, Marty is my roomie here at UO. "Daniel Johnson, so what's your take on a government mandate on purchasing health insurance? Is that government free enterprise, capitalism, threat of tyranny, or something else? Comparing student performance in science, math, and reading in different age groups between public and private schools makes it clear that public education has been failing a significant percentage of students. In addition, literally in all urban school districts across the country you will see a significant. percentage of teachers sending their own kids to private schools. This is not supposition, but prima facie evidence that public schools need complete reorganization in many areas. I am stupified how many people out there who have never taught assume that more money is the answer...hogwash! The unions are the problem, and in those schools that do not have unions, teachers perform or they are gone. We will always have high and low achievers in all school systems, but in the public system we have all test averages heading south, ergo, teachers sending their kids to private schools is the classic example of abandoning ship. In terms of school board make up, what are your sources? Have you compared rural, surburban and urban? Have you contrasted with student performance and long term scenario for adult success?"

We’ve had universal medicare in Canada since the mid-1960s and no complaints from citizens about government tyranny, free-enterprise or capitalism. It’s the same or better in European countries. Only the American people have been brainwashed into believing that cooperation among citizens is bad or in the American lexicon--unpatriotic, unconstitutional, treasonous or some combination of the three.

At the GOP debate last week, Wolf Blitzer asked Ron Paul, a doctor, whether someone who opts to not buy health insurance and then gets sick should be allowed to die. The crowd responded with shouts of "Yeah!" followed by applause. Paul's answer was more or less the same. "That's what freedom is all about: taking your own risks. This whole idea that you have to take care of everybody..." and was cut off by clapping from the audience. Blizter's hypothetical hit close to home as Paul’s campaign manager Kent Snyder died at 49 of pneumonia—without insurance— in 2008.

Snyder's mother was left with around $400,000 in medical costs.

Note: No one in Canada is denied health care, and no one goes into bankruptcy or loses their home as a result of catastrophic or, in fact, any illness.

That same “freedom”, complicated Snyder's health problems, as a preexisting condition made insurance premiums too expensive. After Snyder's death, Paul wrote on his website: "Like so many in our movement, Kent sacrificed much for the cause of liberty. Kent poured every ounce of his being into our fight for freedom. He will always hold a place in my heart and in the hearts of my family."

Three cheers for Snyder who is, I’m sure, basking in his restored/newfound freedom.

As for education I only made one point—that there is no curriculum anywhere in NA (that includes Canada) where students are taught how to deal with and resist the psychological push of advertising. People still are manipulated unknowingly against their will. I thought you were in support of freedom?

Anonymous September 19, 2011 8:49 am (Pacific time)

The causal variables involved in interpreting economics, and the jargon definitions provided below simply reflect a simplification of cause and effect relationships that demonstrate one's inability to understand the complicated dynamics of economics, i.e., showing a lack of any formal academic training. Most often the first step towards wisdom is simply saying "I don't know."

“If any body of knowledge is a pseudoscience, it's economics,” said Leonard Silk, the late economics columnist for the NY Times: "Economists try to do what all scientists do—observe certain aspects of the natural or social world, gather data to measure those aspects, construct theories to explain the data, and test the theories against reality to validate or invalidate them. On the whole, however, economists do a weak job at all this. They commonly spend vast amounts of time observing each other's articles rather than reality. Their data are poor, and they devote little time to improving them. Their theories are rigid and mechanistic. And they rarely discard them unless some academic or government position is at stake."

Harvard economist John Kenneth Galbraith concurs:

“Economists, on the whole, think well of what they do themselves and much less well of what their professional colleagues do. If a scholar probes deeply into a small section of the subject, he is fairly certain to mistrust, as superficial, the man who ranges more widely. The latter, in turn, will think the specialist lacking in vision or what is called reach. By knowing ever more about ever less, he will seem to risk becoming quite ignorant. Those who are mathematically inclined see others in retreat from rigor. The others think those who manipulate symbols impractical. The statisticians believe those who prove points deductively to be dangerously intuitive. But, by their colleagues, those who are controlled by numbers are often thought unduly cautious or even dull. It is exceedingly fortunate for the psychic health of the profession that inadequacy lies so uniformly with others. The situation in the other social sciences is said to be equally satisfactory.”

Now, tell me, what is it you don’t know.

Natalie September 18, 2011 9:20 pm (Pacific time)

Me again with my simplified understanding of the world: As far as I know, economy grows when total output increases. Total output includes both: consumer goods AND CAPITAL GOODS(ex. investments into better technology, newer machinery, etc.). You skipped that part. So when we choose to eat more hamburgers over reinvesting, our economic growth actually slows down, and not increases.

Couldn't do it all in a thousand words. Here is what I think you're getting at, from Wikipedia:

Gross domestic product (GDP) refers to the market value of all final goods and services produced in a country in a given period. GDP per capita is often considered an indicator of a country's standard of living.

GDP can be determined in three ways, all of which should, in principle, give the same result. They are the product (or output) approach, the income approach, and the expenditure approach.

The most direct of the three is the product approach, which sums the outputs of every class of enterprise to arrive at the total. The expenditure approach works on the principle that all of the product must be bought by somebody, therefore the value of the total product must be equal to people's total expenditures in buying things. The income approach works on the principle that the incomes of the productive factors ("producers," colloquially) must be equal to the value of their product, and determines GDP by finding the sum of all producers' incomes.

Martin Hagerty September 18, 2011 6:19 pm (Pacific time)

So, Martin Hagerty. You're not Alberto any more? If you write back and properly identify yourself, I'll post your comment.

Wingnut September 18, 2011 2:08 pm (Pacific time)

Hi. Don't forget that capitalism is also infested to the gills with servitude, and forces 18 yr olds to join it... or starve. OR ELSE! That's felony extortion and forced religion into a competitor's church.

Hank Ruark September 18, 2011 11:23 am (Pacific time)

DJ et al: You are too kind, but otherwise well summarized. Re local schoolboards, mine own painful experience taught me what to expect, and why education is totally and continuously under-funded, for what it can, should and MUST DO. Given that latter, including longterm consumer education efforts far deeper than ever achieved, we might make enough remedy to avoid the fate you depict, otherwise unavoidable.

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