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The Fall of Capitalism

By Jeff Margenau
Published: Wednesday, July 9, 2003

Jeff Margenau

It always surprised me how when Russia moved toward a capitalistic economic structure, it was spread throughout the media as "capitalism triumphs over communism". This fallacy was propigated due to Russia's economic collapse in their effort to keep up with the bomb building machine in the United States led by Ronald Reagan. (Of course, in order to do this, Ronald Reagan doubled our national debt in just 8 years.) This was seen universally as evidence that capitalism must be the "best" form of economic structure for a nation. They couldn't have been more wrong.

What it did prove however, was that if you want to produce the most bombs in the least amount of time - capitalism is the way. However the relevance of such a claim to fame for capitalism escapes me.

The principles of capitalism are based on exploiting (taking advantage of) something and also usually someone. For example cheap oil or labor from a lesser developed country. The goal of producers in a capitalistic economic structure is to produce at the lowest cost possible so that the company can maximize it's profits. So if a producer can pay a Chinese or Indian person $3.00/hour to do the job, he would have no reason to pay an American worker $8.00/hour to do the same work. Therefore, many of our jobs have gone to other countries. The problem will arise though, when the majority of people lose their jobs to foreign workers, those unemployed workers can no longer pay taxes or purchase other American made goods. What this means is that the our money keeps moving out of this country. You may be familiar with the traditional guage of this - our ever-rising trade deficit. Eventually that will bankrupt this country. Similarly, if valuable resources can be obtained cheaply from a country, the producer will tend to acquire those resources through whatever means necessary.

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Jeff Margenau
Jeff Margenau

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