Capitalists don't understand how capitalism works

It's no secret that capitalists don't understand what socialism is. When they talk about socialism they mix in communism, fascism, feminism, atheism, and just about any other word that scares them. So it's no surprise that the vast majority of Americans have no idea what socialism is.
The surprising thing is that the vast majority of Americans fail to understand what capitalism is either. Even professional capitalists appear ignorant of how capitalism works.
There are a lot of examples, but this one is a particularly good example.

Yet amazingly enough, the stock market is at an ALL TIME HIGH.

More than 11 million people in the US alone are still unemployed. 2.7 million homeowners are in forbearance (meaning they’re not paying their mortgages). Millions more are relying on food banks to feed their families...
Plus there are entire industries– retail, travel and tourism, commercial real estate– which have been completely vanquished. And it’s unclear if they’ll ever fully recover.

Somehow lower profits + lower consumer spending + higher unemployment + ravaged economy + soaring demand for food banks = record high stock prices.

I don’t think you need a PhD in finance to understand that this makes absolutely no sense– the stock market is completely disconnected from any sort of reality.

It’s no longer about productivity, innovation, profitability, or the health of the economy.

This is a brand-new thing, huh? The stock market going up even while the working class gets exploited and destroyed. This capitalist thinks that this is something new.
He seems to have missed the lessons learned from the 1980s 90s and 00s. Time and time again, in literally thousands of instances, factories, mines, and other places of employment for the working class were shut down and off-shored.
And guess what the stock market did every time? It directly responded positively every single time that the working class got screwed.
The only thing different about it this time is the size of the screw job.

Capitalism is functioning exactly how it's supposed to. And how it always has. The fact that it's dysfunctional and has a negative impact for American society is how the system is designed.
That this diehard capitalist doesn't recognize this fact only shows how indoctrinated he is.
There is one other item worth noting.

And according to Standard and Poors, corporate profits of the S&P 500 are down 48.96% compared to this time last year.

Right. Market always punish falling corporate profits, amirite?
Well no. A lot of the best stock market winners of the last 20 years have been companies that don't make any money. Tesla, Uber, Netflix, Twitter, the list goes on and on.
But once you recognize that capitalism rewards losing money (i.e. bad investments) then you are forced to recognize that capitalism isn't efficient. And that's just the stock market.

In real estate the wealthy are incentivized to buy investment houses that sit empty while our homeless population explodes.

And what can you say about a system in which farmers go broke producing crops that they plow under or get dumped in the landfill, while people go hungry in the cities?

It's worse in the labor markets, where the people that are most important to the economy, supplying us with our food, clothing and shelter, are almost always the lowest paid.
While on the other end of the scale, people paid the most do nothing but push electronic bits that represent money across a computer screen.

Now when it comes to your well-being, which is more important in your life? Food clothing and shelter, or electronic bits across a computer screen? Let's not forget that the person pushing bits on a Bloomberg terminal are often doing it to destroy the livelihoods of working-class people who produce your food and shelter.

This is how capitalism works. It destroys the working-class. It destroys people that you need most. And it incentivizes that destruction through the mechanism of compensation. Or lack of.
And then there is the environment, which capitalism incentivizes its destruction by using the term "externalities".
And of course there is the always extremely profitable capitalist enterprise - war.

What the cheerleaders of capitalism always do this blame the government, even when the government is bought and corrupted by the capitalists, and directly does the bidding of those capitalists.

Cheerleaders of capitalism besides being ignorant of how Capitalism works, are also ignorant of the history of capitalism. They will tell you, and honestly believe it, that more capitalism leads to more freedom and prosperity.
Let's just ignore the obvious question of "At what point when you are at work, when the boss is telling you what to do, how to do it, and where to do it, do you tell yourself 'This is freedom'?"
Let's instead focus on some history.
Three times in the last 150 years major nations were owned and controlled by corporations, whose sole purpose was to reward shareholders with profits. In other words these countries were run just like a business, and for decades if not centuries, without major interference from the government.

The examples I'm thinking of include India under the British East Indies Company, Indonesia under the Dutch East Indies Company, and the Congo Free State.

So how were these capitalist utopias?
They were all guilty of slavery, war, famine and genocide.
The Congo was a particularly gruesome example, in which it is the only instance in history where severed hands became a tradable currency.

Until the institution of capitalism is honestly critiqued and its role in society questioned, nothing will ever improve.

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Lookout's picture

Perhaps we could take a page from the fed program buying the market and all the toxic debt?

The plunge protection team might could help too.

It's more off-the-rails under Powell than his predecessors, handing trillions of dollars of virtual free money to Wall Street banks and other corporate favorites at a time when policy making should focus like a laser on helping ordinary Americans by creating jobs and reviving economic growth.

Instead, neoliberal slow-motion train wreck Fed, White House, and congressional policies keep worsening conditions at a time when vital aid is needed for most Americans.

Instead of contributing to the solution, the Fed is a key part of the problem.

https://www.freedomsphoenix.com/Article/283025-2020-05-18-federal-reserv...
Probably a RW site?

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17 users have voted.

“Until justice rolls down like water and righteousness like a mighty stream.”

Cassiodorus's picture

Capitalist "economics" is a genre of propaganda cranked out by the academy. If you want to see the most objective treatment of it, as a form of literature, I would recommend (since we are talking about introductory texts here) Chapter 2 of Kees van der Pijl's A Survey of Global Political Economy. As van der Pijl explains it, marginalist economics is "axiomatic" -- you have to subscribe to the axioms, which are basically false, in order to buy into the academic field's generation of mathematical models, which are its way of advertising itself.

As for "the economy" -- the CARES Act created a class of direct recipients of Federal Reserve loans (whereas previously such loans were only available to banks), and said loans were ultimately used to buy Treasury bills (which interest will pay back the loans) and to pay for stock buy-backs, thus the thriving stock market. It's really that simple. No?

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16 users have voted.

"Every election is fake." -- Janna Ordonia, from "Star vs. the Forces of Evil"

@Cassiodorus In other words they only make sense in comparisons to similar economic theories.

When they expose these capitalist theories to the light of day, aka reality, they look like the carnival freak show that they are.

I'm going to do some updates to this essay

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13 users have voted.
Cassiodorus's picture

@gjohnsit -- of "rational choice theory," which assumes (and this is what you read in the canonical texts of marginalism) that people are "maximizers of utility," which in real life they are not.

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11 users have voted.

"Every election is fake." -- Janna Ordonia, from "Star vs. the Forces of Evil"

@Cassiodorus
"Man is not a rational animal. Man is a rationalizing animal." I do believe this firmly.
This is why all attempts at a rational economic theory must fail. Any economic theory that purports to reflect the real world must take into account mankind's psychology. IMHO, an abnormal psychology. i.e. (or is it e.g? help me here, teacher) mankind is nuts!

What we call economic theories are really political theories with a God and a Devil. Maybe they are really religious theories. Communism says the owners are devils and the proletariat are angels. Capitalism says the owners are gods and the workers are devils. Most likely the owners are devils and so are the workers. each makes a bad master. Everyone is out to screw everyone. Or (is this in the Bible?) "All have sinned and come short of the glory of god." Power corrupts and absolute power corrupts absolutely (Lord Acton on Papal infallibility). Power must be dispersed, so that none can impose their will on another. But Power abhors a vacuum. There is always someone who needs to have people obey him. And there are always people who need an infallible leader and will do anything in his cause. Dachau proves this.

Solution? There is none. Or so I feel today. The Universe is strange. Is an electron a particle or a wave? Both. And neither. Experiments show both contradictory proposals to be false.

EDIT: added "Dachau proves this"

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8 users have voted.

I've seen lots of changes. What doesn't change is people. Same old hairless apes.

@The Voice In the Wilderness

Most likely the owners are devils and so are the workers. each makes a bad master. Everyone is out to screw everyone.

If this was true then pre-historic man never would have made it off the African plains.
Dog-eat-dog is NOT a system that any sane person would want to live in.
It's not normal. It's sick.

I know why you think this: because we live in a system that rewards those that screw over eat other. So gradually people learn that dog-eat-dog, devil-take-the-hindmost is our world.
And assuming that everyone are assholes helps to justify the current system.

But if you remove this system, people would be an act a lot different.

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7 users have voted.
Pricknick's picture

@gjohnsit

Dog-eat-dog is NOT a system that any sane person would want to live in.
It's not normal. It's sick.

It's just where all mammals and most insects are destined to.
Someday you will die and somehow something's gonna steal your carbon.

Peace

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6 users have voted.

Regardless of the path in life I chose, I realize it's always forward, never straight.

@Pricknick
we created this system. it wasn't decreed by Gawd.

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2 users have voted.

@gjohnsit
Where do I sign out?

Examining communism, fascism and democracy can you think of a case without exploitation?

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1 user has voted.
ggersh's picture

LTCM the Hedge Fund and the Banks that had trades w/LTCM were bailed out by the FED
2001 markit crash bailed out the Banks
2008 crash empty n co bailed out the Banks
2020 C19 panic bailed out the Banks

in capitalism this is a feature not a bug

surprisingly the bugs haven't risen up to fight back for they haven't received jack except for a boot up their arse

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19 users have voted.

In the "Age of Trickle Down" why does most money go to billionaires?

We have a government in DC, of the MIC by SV for WS

NO MORE WAR

@ggersh
But if all the money went into that program I would have gotten $120,000 bucks and could have REALLY spent it on local economic activity.

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9 users have voted.

I've seen lots of changes. What doesn't change is people. Same old hairless apes.

snoopydawg's picture

@The Voice In the Wilderness

If you can figure out that putting money into our hands would boost the economy then the PTB know it too. Of course they do. It’s just that they don’t want us happy and fat, but being constantly stressed out so we’re too busy to rise up against them.

Great essay. I’ve tweeted it for others to understand.

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14 users have voted.

“Restoring the soul of this nation” is just MAGA with more words

Twitter is like a game of telephone

RantingRooster's picture

There's this from Secular Talk - US Hospitals Charge Up To 1,800% Over Cost

And then there this --> after 5 felony convictions, "JPMorgan Chase Is Under a New Federal Investigation, One Month After Getting Slapped with Its 4th and 5th Criminal Felony Count" reports WallStreetOnParade.com

Each quarter publicly traded companies file a form known as the 10-Q with the Securities and Exchange Commission. The 10-Q filed by the largest bank in the United States, JPMorgan Chase, on November 2 carried a very disturbing paragraph that had not appeared in the 10-Q the bank filed on August 3. The paragraph reads as follows:

“JPMorgan Chase Bank, N.A. has been advised by one of its U.S. regulators of a potential civil money penalty action against the Bank related to historical deficiencies in internal controls and internal audit over certain advisory and other activities. The Bank already has controls in place to address the deficiencies related to the proposed penalty. The Firm is currently engaged in resolution discussions with the U.S. regulator. There is no assurance that such discussions will result in resolution.”

Why is this paragraph so disturbing? First of all, the words “deficiencies” and “audit” are not two words that one wants to read in the same sentence pertaining to any Wall Street bank. But they are particularly frightening when it comes to the largest bank in the United States that has racked up an unprecedented five criminal felony counts – to which it admitted guilt – in the past six years. That’s five more felony counts than the bank racked up in the prior 100 years of its existence.

(bold mine)

It's absurd! Crazy

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20 users have voted.

C99, my refuge from an insane world. #ForceTheVote

Bollox Ref's picture

I think is the old term for 'professional capitalist'.

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16 users have voted.

Gëzuar!!
from a reasonably stable genius.

Pricknick's picture

@Bollox Ref
The thief would long ago be called the ordinary man or human.
Those that have not wish for more.
Those that have all also wish for more.
There is no more left to give.
Enjoy the ride.

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3 users have voted.

Regardless of the path in life I chose, I realize it's always forward, never straight.

I mean SOCIALISM! Her radar spewed in Monday's EB with no further commentary. I guess The Hill people felt they had to shout it so granny's kids would believe it to be true. And Sagaar for his part says mRNA like it's not a brand name or a stock symbol. Suddenly bigly corporations are saviors of the world, not destroyers for profit. At the end they referred to AstraZeneca's vaccine but nowhere in the segment did they talk about dollar cost, or cui bono Wall Street. Australia will only charge $3 per tablet, or some low number that sounds non-profit to me. Pfizer and Moderna? ftg fta

It's no wonder tube and tv consumers get confused by word definitions, they change direction every time the wind blows.

good luck

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7 users have voted.

@eyo

says mRNA like it's not a brand name or a stock symbol

https://www.sciencedirect.com/topics/medicine-and-dentistry/messenger-rna
Do you want to doodle on your genetic code?

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3 users have voted.

I've seen lots of changes. What doesn't change is people. Same old hairless apes.

@The Voice In the Wilderness
This isn't CRISPR.
mRNA has a relatively short lifespan inside a living cell -- and shorter if it's being actively translated into protein. eukaryotic cells have "machinery" that actively digests mRNA, constantly. in humans, an mRNA transcript will last about 10 hours, depending on what else is going on in the cell at the time.
these vaccines can only work because of techniques that protect the mRNA, usually in some sort of lipid coating, allowing a "timed release" -- but that would be over a scale of days or possibly weeks. none of the vaccine mRNA will remain in your body beyond the short term.
BTW, I guarantee that, contrary to an earlier comment of yours, you will not "die with the DNA" you were born with. In addition to various mutations that will have happened here and there throughout your body during cell replication, you've acquired retroviral DNA that has been inserted into the genomic DNA of some of your cells. C'est la vie -- literally.

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7 users have voted.

The earth is a multibillion-year-old sphere.
The Nazis killed millions of Jews.
On 9/11/01 a Boeing 757 (AA77) flew into the Pentagon.
AGCC is happening.
If you cannot accept these facts, I cannot fake an interest in any of your opinions.

@The Voice In the Wilderness thanks for the zebrafish link. Yet another Canadian scientist, eh?
doctormanitoba.jpg
"these unfortunate, uneducated people"
Zebrafish do it with polarization. ar ar!

How do you pronounce a capital M on TV? I mean Upper Case M? I am so lower case now it ain't funny.

case caste class
good luck

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4 users have voted.

@eyo
a stock symbol -- the scientists who founded the company did so precisely to try to commercialize the new technology of mRNA vaccines -- but that doesn't mean they own the abbreviation. Indeed, they would be unable to trademark it, because it is used ubiquitously in biotech research and commerce, and has been for more than a century.

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7 users have voted.

The earth is a multibillion-year-old sphere.
The Nazis killed millions of Jews.
On 9/11/01 a Boeing 757 (AA77) flew into the Pentagon.
AGCC is happening.
If you cannot accept these facts, I cannot fake an interest in any of your opinions.

@UntimelyRippd
Like the one in the '70s that allowed companies to patent technology that they didn't develop and was already common knowledge.

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2 users have voted.

I've seen lots of changes. What doesn't change is people. Same old hairless apes.

@The Voice In the Wilderness
make me a trillionaire, but that's not going to happen, and neither is anybody successfully trademarking "mRNA" for use anywhere in commercial biotech.

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2 users have voted.

The earth is a multibillion-year-old sphere.
The Nazis killed millions of Jews.
On 9/11/01 a Boeing 757 (AA77) flew into the Pentagon.
AGCC is happening.
If you cannot accept these facts, I cannot fake an interest in any of your opinions.

@UntimelyRippd
with a big enough "campaign contribution"

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1 user has voted.

I've seen lots of changes. What doesn't change is people. Same old hairless apes.

Who knows if he can pull off a win but that's the easy part. Actually doing what he wants to do would be opposed by lots of power and money. The only thing I'm pretty sure about is that Lasso would be a disaster for the people and the country.

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5 users have voted.

"But I was so much older then, I'm younger than that now..."

Adam Smith did not dream up the system he described. Nor did any other subsequent Founding Parent create the idea of "profit." Exploitation of the weak by the strong predates capitalism by thousands of years. And it also happens in putative socialist states, although I do agree that the basic idea of "socialism" is to prevent the strong from exploiting the weak. Any society without at least a nod to the ideal of socialism will not survive long -- as we are about to experience here in the USA.

What describes the current idiotic price levels for stocks is GRAFT.
.

Graft, as understood in American English, is a form of political corruption, being the unscrupulous use of a politician's authority for personal gain. Similarly, political graft occurs when funds intended for public projects are intentionally misdirected in order to maximize the benefits to private interests.

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9 users have voted.

I cried when I wrote this song. Sue me if I play too long.