On Capitalism and Free Market

Despite the problem today, one thing that people continue to preach is that capitalism and free market will ultimately right itself. I think that is a load of crap. Not because the idea of capitalism and free market are wrong. Rather, it is about what people are doing with the idea of capitalism and free market. (People a f***ed up)

More than a year ago, I wrote about how people are treating the symptoms and not the root of problems. Observing what is happening, it looks like we have not moved beyond that. (People are still f***ed up)

How could we be so wrong?

The fundamental problem lies in the bottom line, and like John Bogle said, we have the wrong bottom line.

In a true capitalistic and free market, business FIRST provides services and products that are of quality, and in the process, because of the quality of services and products, they make profits. As such, business’ focus is on providing the best quality of service and product. Through competition, the best prevails and we all benefit. In a nutshell, this scenario means public interest precedes self-interest, where business creates values for society.

In the existing capitalistic and so-called free market, business FIRST makes profits, and in the process, they may… or may not provide services and products. As such, business’ focus is on making profits. While they are so focused on making profits, their services and products may or may not be beneficial and sometimes detrimental to everyone. In a nutshell, this scenario means self-interest trumps public interest, where business drains values from society. And this is what happened, and still happening.

Until people become aware and learn to behave otherwise, we will continue to see more of the same. Yeah, same different things.

Jacob at Early Retirement Extreme wrote a post, Symptoms and diseases, which main idea greatly resembles my 2007 post. Worth a read.

One Response

  1. rob says:

    I need to read more books on the subject, as this topic in particular interests me nowadays.

    I think the problem lies in the obsession with acquiring monetary currency while neglecting to provide true value that is in demand and benefits society. The monetary currency we strive for is an abstract concept invented by us, while the concrete Value which is the basis for that currency is forgotten.

    The breakdown in the economy is the result of that paper currency ceasing to exist, as it had no intrinsic value in the first place. Therefore, the only way for the economy to ‘recover’ is to start creating value that will serve as the foundation for future wealth.

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