The capitalist system

The essential characteristic of the capitalist system is economic freedom, or freedom of industry and enterprise; and it has four postulates which we will call the postulates of capitalism. They are the postulates of: (l) private property, (2) choice, (3) equality, and (4) egoistic altruism.

Private property: The right of the individual to own and control as much economic goods as he can appropriate to himself from the operations of supply and demand is recognised and protected by law. These goods may consist of personal possessions, tangible and intangible, corporeal and incorporeal, and of physical means of production which in turn consist of land and capital.

Choice: It is assumed that each individual has complete freedom of choice; he may use his energy and property as he thinks fit subject only to such restraint as may be imposed upon him by law.

Equality: Here, it is posited that everyone may work, live, and freely contract on a basis of equality with others and with the same opportunity as their fellows.

With the new combines among the powerful  and rich capitalist nations of the world on the one hand, and among tne weak and poor nations on the other hand, the stage is undoubtedly being set now for large-scale and ruinous economic collisions between the two, in the not too distant future.

Because his sole aim is to make profit, the capitalist neglects the development of basic and other infrastructures. He does not touch any business or enterprise which shows no promise of yielding profit,  either in the present or in the immediate future. Accordingly, he is completely indifferent to the education and health of actual and potential workers, except in so far as their education and health have every prospect of redounding to his business efforts, and improving his chances of making profits. Whenever he is satisfied that this is certain to be the case, he may undertake the education of a limited number of workers to enable them to acquire such skills as will raise their productivity, and boost his profits.

For this reason, and because the reins of govemment are in the hands of capitalists, the education of the citizens in rnost capitalist countries is unplanned and distorted, and their health largely neglected. As a result, the masses of the citizens remain enslaved to heredity, develop malignant and injurious sentiments, and give unfettered rein to negative and poisonous emotions such as anger, hate, fear, jealousy, selfishness, and greed. We shall have more to say on these negative emotions in Chapter 9. But at this stage, we would like to assert and emphasise that the capitalist system places too high a premium on man’s negative emotions, especially those of selfishness and greed. Because it recognises and legalises stealing by cunning, and recovery by stealth, strike, or violence; because it promotes and fosters sharp disparities and inequity in the distribution of wealth as between the rich few and the poor masses; and because of the inescapable economic insecurity to which it exposes the masses of the people, the capitalist system inevitably produces anger, hate, fear, jealousy, selfishness, and greed among all and sundry.

Several devices have been introduced and adopted by the capitalists with a view to correcting the evils and righting the wrongs of the capitalist system. We will itemise some of these devices, and briefly assess the efficacy of each of them.

Taxation: The primary aim of taxation is to make the citizens pay money in lieu of the services which they are in duty bound to render to the state. The taxes thus collected are used to employ a number of people full-time in the service of the State. In addition, there are quid pro quo taxes or rates which are paid to the state in consideration of direct services rendered to the citizens. As a modern evolution, however, some new, important, and radical principles have been introduced into taxation. These are designed to achieve three fundamental social ends, namely:

(i)            to reduce the gap between the rich and the poor by taking, in tax, much more than proportionately from the income of the former;

(ii)           to make the rich contribute, by way of taxation, much more than propottionately to the revenue of the State on the grounds that they can bear the comparatively heavier burden of taxation, and still be able to satisfy their demands for necessaries, comforts, and a fair number of luxuries; and

(iii)          to make the rich contribute specifically to the development of basic and other infrastructures, such as the education and health of the poor, and the provision of some elementary amenities for them; the construction of roads; and the maintenance of social services and institutions which do not normally yield profit.

All these are good as far as they go. But the experience of well over a century has demonstrated beyond any doubt that they do not go far enough. In spite of progressive taxation and super-tax, and in spite of the taxation of luxury and other goods usually consumed by the rich, the gap between the rich and the poor remains, and widens, whilst good education and health and the enjoyment of modern amenities remain largely the preserve and privilege of the rich.

Incentives to workers: It would appear that the capitalists themselves recognise and admit the gross and glaring injustice which is being done to workers in the process of distributing the wealth of the nation. In any case, the workers themselves have never, at any time since the 19th century, relented in using the weapon of strike and other forms of protest in agitating for improvement in their wages and conditions of work. Consequently, various methods of remunerating the workers have been adopted by the employers.

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