This page has been archived and commenting is disabled.
When Capitalism Turns To Cannibalism
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
With authentic growth scarce, there's no other way to reap huge profits but cannibalism.
When people say "capitalism has failed" or "capitalism has succeeded," we have to ask: what type of capitalism do you mean? Authentic capitalism, in which capital is placed at risk to earn a return in a competitive, transparent marketplace, or do you mean cartel-state capitalism, or crony-capitalism, or monopoly capitalism or finance capitalism, i.e. the types that dominate the global economy?
As long as most startups crash and burn, and anyone with a few bucks and plenty of inner drive can start an enterprise, authentic capitalism still lives. But let's face it, authentic capitalism occupies a diminishing corner of the U.S. and global economies.
With a work force of 150 million and around 120 fulltime workers, the U.S. economy has about 6 million small businesses with employees and a few million self-employed (sole proprietors) who earn a middle-class livelihood: Endangered Species: The Self-Employed Middle Class.
The political and financial influence of small business and the self-employed barely registers on K Street, Wall Street and in Washington D.C. Politicos praise small business in the same way they speak of small family farms as the backbone of American agriculture--as a form of pandering for PR purposes while they pocket the big campaign contributions from Monsanto and Big Ag.
Meanwhile, in the real world, small business is in decline while corporate money floods the financial sector and Washington D.C.
The Washington Post published a study that found U.S. businesses are being destroyed faster than they’re being created. While not exactly a surprise, this is sobering evidence that small enterprise is in structural decline:
The 22.4 million with some self-employment income looks like a big number, but most earn a pittance: only a relative few earn what qualifies as a middle-class income, and 3 million of these are professional-sector corporations or partnerships:
The real action in modern-day capitalism is finance capital: that's where the really big money is made. You don't make money making inexpensive autos, you make the big money selling subprime auto loans.
Corporations aren't selling more products to boost their share prices--they're buying back their shares as a way to push their stock price higher. It has been estimated that the majority of corporate profits (presumably actual profits, as opposed to the tricked-up accounting games companies play to boost their announced earnings) have been spent buying back shares.
Correspondent Arshad Ali recently described the underlying dynamic of finance capital in a Facebook post: a lack of authentic growth is driving financial cannibalism:
"The modern banking system of the last few centuries has been based on lending to borrowers who do something productive with the capital -- open a mine, start a factory, start a ranch, drill an oil well. But this whole equation becomes unstuck when -- because of a finite resource-constrained planet -- there's nowhere productive to invest it anymore. That's when finance capital becomes cannibalistic, as it has over the last few decades. That's why the Greeks, for example, cannot grow themselves out of the debt pit -- there's no growth to be had."
This is why corporations are "investing" in their own shares--there's no place left to invest for growth. They are cannibalizing the entire financial system, buying regulatory and tax favors from thoroughly corrupt political systems to secure their profits, which are then used to remove shares from the market, boosting the price-earnings ratio and the share price.
Insiders grant themselves immense chunks of newly stocks via options which they promptly cash in, reaping tens of millions in personal gains from the cannibalism.
Yes, authentic capitalism still exists, but it's been relegated to the sideshow. The Big Tent with the Big Bucks is all finance/cartel/state/crony capitalism, and financialization is devouring all the other players.
With authentic growth scarce, there's no other way to reap huge profits but cannibalism.
»
- 12544 reads
- Printer-friendly version
- Send to friend
- advertisements -
"That's why the Greeks, for example, cannot grow themselves out of the debt pit -- there's no growth to be had."
Why does the EU continue to beat them over the head with this debt?
The minute you have a central bank, you have cannablism of the people.
Institutions are not corrupt. People are corrupt. Now so many have jumped on the Mafia bandwagon - trying to bleed off a share of real wealth from actual production that they are killing production. Like leeches, they are draining the system dry; and like vampires, the call to join them is seductive. Eventually the vamps kill capitalism because the heroes of Liberty, Freedom and Justice for All took a powder (probably with a spoon up their nose). Everything is a metaphor...
Then we start over with new eyes, realizing the horrific folly of our allegiance to unbelievable usury; our acceptance of the banality of evil. Etc. Ad nauseam
But, by then, what a mess.
give a man a fish, and he will eat for a day.
take away the fish, and he can go ahead and die.
-lao tsu
Give a man a fish, and he will eat for a day.
Teach a man how to fish, and he will sit in a boat all day drinking beer.
Oh, I get it, a Canabalistic economy.
"authentic capitalism still lives. " ... BS
Where does it exist? Garage sales and flea markets? Where did it ever really exist as described by its most ardent supporters?
All of these ideological labels are BS anyway and so tiresome anymore in these articles.
Good point.
I have been inspired by Germany and Greece's interactions: OK so I go to my next door neighbor and tell him about the latest and greatest multi-level marketing scheme, er um - company. And the best part, I will
LOAN him the money to come on board!! After a little cajoling, he accepts, terrific!! Then the pyramid scheme, multi-layer marketing co., starts to come unwound, and he gets behind on payments!! OK. so I loan him
some more money, BUT to show I mean business-- I bust his ankle with a pipe, I affectionately named austerity. This deadbeat bastard owes me money!!, and he just wants to lay around whining about his fucking
ankle, so I bust his knee---WHERE'S MY MONEY?? OK I've had it with this guy! I'm taking his house and his wife. AHH! Life is good for a cannibal!
"Times are tough?...FUCK YOU PAY ME!"
Right outta Goodfellas.
At least the Goodfellas weren't two faced, unlike the douches that helped Greece put themselves in a world of shit.
http://www.truth-out.org/news/item/26112-an-economic-hit-man-speaks-out-...
You mean your next door neighbor comes to you, after he and his accountant Blanky fudge his books, in order to join your credit union and get a loan from you.
Turns out he runs his house based on a reverse ponzi-scheme where the people at the top of the pyramid actually pay the people at the bottom. He has a fancy phrase for this arrangement and he calls it "democratic socialism." However, based on the books, you figure it must be working for him so you lend him the money.
Turns out, by the time he gets to you, the payers at the top have largely left, or been beaten into submission to the point where the dont really produce anything anymore and simply move down the pyramid since it paid better.
For decades, those at the bottom refused to move up since they were well taken care of where they were.
Of course, the loans you provided allowed your neighbor continue this way much longer than he would have otherwise been able to. Lucky for him, now it's your fault he's in the situation he's in. I mean, he even had a vote in his family to decide whether or not to pay you back and they voted 'no' so you're a democracy killer for still expecting payment.
At least a bunch of other brainwashed reverse-ponzi-schemers that can't think beyond a single premise of 140 characters or less have a lot criticism for you in the local paper.
Today, the problem isn't "Crony Capitalism".
It's Champagne Socialists.
Champagne anyone? http://cheezburger.com/2814131200
My small business reports a loss... depreciation baby...
It will be fun to watch them starve...no matter WHAT they do, the profits are just no longer there...
Things will NOT get better for these behemoths, the only growth to be had will be on the smaller, local level. Sell to and transact with your neighbors, and starve the beast.
The economics will ensure that the masses don't screw things up by going ahead and spending anyway like they have in the past. All potential sources of credit for growth on the scale the big guys need for survival have been exhausted. They will consume their excess in a futile quest for continuation, then they will fail, one by one until they downsize to the level they need to be at.
They refused to share the good fortune with labor, refused to bring labor up to where they were. Now economics will level the playing field by bringing them down to where their labor is.
"The people are hungry: It is because those in authority eat up too much in taxes." - Lao Tzu
Trouble with capitalism is that it can only devolve into what it has become.
Wanting the return of capitalism as we knew it, where you could start a bakery or a launderette without some chain immediately wanting to buy your business and push you out, is like expecting the return of European monarchies (I mean the ones where the kings actually ruled, not the ersatzes we have for instance in Great Britain).
Won't happen.
Time to erase the slate.
So we need a new system that devolves into capitalism?
"So we need a new system that devolves into capitalism?"
Time to use brains and imagination instead of sitting in front of the TV.
We sure need a new system and it won't happen by itself. There are no miracles.
So, do you think voting will help?
Every question that needs to be answered is in this book “The Market for Liberty”
That happened 15 years ago.
No fat left on the carcass, but does it matter anymore in a rigged game?
It pains me to say it, but it seems the Pinko, Birkenstock lefty, was correct in their analysis that capitalism left unregulated will become corrupt and all consuming. Marx said, "Unbridled Capitalism will destroy itself". Western puppet politician, corporate, bankster, MIC, Wall Street capitalism is corrupt to the core. The western political classes have failed us all.
When you see that trading is done, not by consent, but by compulsion–when you see that in order to produce, you need to obtain permission from men who produce nothing–when you see that money is flowing to those who deal, not in goods, but in favors–when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you–when you see corruption being rewarded and honesty becoming a self-sacrifice–you may know that your society is doomed. – Ayn Rand, “Atlas Shrugged”
When a political continuum is subjected to duress the extreme ends will touch, thus forming a circle. Marx and Rand might agree on that.
Research tells that in stone age western countries did actually indulge in cannibalism.
Various tribes used to go to war with each other, the defeated were eaten.
------
West had survived on cannibalism
West will always cannibalize others in some way or other in order to live (in luxury & grandeur)