Capitalism is an Economic Pyramid

Capitalism is a pyramid; a social structure that requires an abundance of laborers to produce, process, and transfer all of the goods that we consume. The base of this pyramid is very wide with a large number of laborers supporting a relatively small number of elite at the top of the pyramid.

The individual laborer is sustained by his or her productive labor, but society is created and sustained by his and her surplus productive labor. We create surpluses for future consumption, but we control them in the sense of who may distribute those surpluses to their exclusive benefit, and then we call such surpluses “wealth”. When those surpluses are used to expand the productive economy, they are called “capital.” The use of private wealth (surpluses) to build and control industries is the foundation of Capitalism.

Capitalism is used to generate a pool of surplus productive labor, stored in goods and infrastructure and consumption debt. Our democracy is supposed to regulate the distribution of that surplus productive labor. But our political system has been subordinated to the power of wealth from its beginning. Capitalism, unchecked by social examination and regulation, and unguided by principles of social liberty and relative equality of opportunity, will tend toward what is called an oligarchy; where a relatively few hold power to rule and perpetuate their rule by economic and political tyranny. Voters have little recourse to correct the actions of an oligarchy, because political parties, which are controlled by the oligarchy, choose the candidates that will perpetuate the economic tyranny.

Through capitalism we are forced to build an economic pyramid, arising from a foundation of economic inequality, and then we consume our social energies trying to politically re-arrange it. However we may arrange it, our pyramid requires that many must be at the bottom so that a few can be at the top. Those at the top of our socio-economic pyramid continually delude the poor and middle class into believing that all of us could join them if we simply work harder.

In the past, society was also structured like a pyramid. A king or queen stood at the top, aristocracy further down, merchants further down, and serfs and slaves at the bottom. Societies were quite rigid then, in that one could not easily change classes, regardless of their abilities. In today’s pyramid, fate, violence, corruption, or the right connections, can allow anyone to obtain any position in our pyramid. The opportunities of ownership and control that are available to some can only occur if those same opportunities are denied others. The unemployed are left milling about near the pyramid, hoping for an opportunity to join the structure and work for or inherit a place at the top. The pyramidal axiom of capitalism is; “some must labor more and receive less so that others may labor less and receive more”. Though our modern economic pyramid is more fluid in the sense that your class at birth does not now prohibit you from rising higher in that pyramid, our economic structure will always require that many must labor and receive less to support a few who will receive more.

America may be the land of opportunity, but it is not the land of equal opportunity. By limiting access to education, especially higher education, we create a pyramid of individual capacity that interfaces with our economic pyramid of ownership and productive labor. Rather than discipline children to learn and attain certain skill levels before advancement in primary and secondary schools, we matriculate all children according to their age. Such measures only create classes that are peers in age, not in ability. This does not profit the majority of students; it only supplies our economy with new replacements for those retiring from our economic pyramid. We do not want the majority to be peers in capacity. We want many to be very limited in skills, willing to do as they are told for wages that do not permit any opportunity to acquire surplus labor wealth and economic independence.

The anarchy of the capitalistic marketplace is always searching for increases in efficiency and more resources. Through technology we are able to increase industrial production and to locate or extract more resources from the Earth. Technology continually improves productivity because of competition for increased profits. But competition can be both constructive and destructive. Constructive competition promotes increased technology and frees up labor to pursue the production of more and varied products, conserving resources and reducing the labor input of society while raising the over-all standard of living for all. On the other hand competition often allows one person or company to control sufficient resources to destroy its competitors by temporary over-supply of its goods, and lowering prices below production cost; using its stored labor-capital to carry it until its competitors go out of business. Those who are driven out of business and into unemployment will have to be carried by the rest of the laboring economy. The company that is victorious in such an economic battle will then have a greater monopoly over the consumption of its goods or services. This will lead to price increases, which will ignore need. Those without sufficient labor-money to exchange will be unable to consume.

Regardless of the strength or weakness of any company in our economy, all companies should be required to make a profit on current sales to moderate competition. And all companies, regardless of profits should pay a percentage tax on gross sales.

Government should have the authority to liberate resources that are being monopolized, and further, to support companies whose growth will foster good competition. Doing this within the nation, and as a nation competing with other nations, would bring the world into an economic system wherein all standards of living would tend to equalize; needed goods and services should be produced in sufficient quantity to meet demand, and their prices regulated if necessary. But equal reward for equal labor is equal consumption, nearly impossible to establish and control. Inequality establishes itself easily, responding only partially and grudgingly to social controls. Capitalist ownership and monopoly are the antithesis of economic freedom and will forever deny such freedom, because economic freedom would lead to the collapse of our economic pyramid.

A capitalist economy must always increase productivity with machine technology that reduces the need for human labor, rather than use technology to increase overall company productivity to produce and sell more goods at a lower price. It’s apparently irrational to believe that auto makers should work together world-wide to meet the transportation needs of all economies, and do it for lower and lower costs as technology reduces the labor needed to manufacture those cars. Consumers should benefit from such price reductions without having to bear the increased burden of supporting those who become unemployed. Social freedom and harmony would be more forthcoming if technology was universally shared.

Surplus productive labor is our only source of capital. When our government talks of tax policies that promote the creation of capital, or which promote capital investments, the government is really just talking about surplus productive labor. This surplus productive labor can be the potential of machines and materials to build things (stored labor). It can be what we call borrowed capital (current surplus), debt acquired in order to build or expand a business. In either case, the recent focus of the government has been to aid the wealthy in gathering more and more capital, which has been poorly invested and scandalously misused. We have for most of the last generation been borrowing from the wealthy, the surplus productive labor they have taken from workers, to finance government deficits; requiring future workers to repay the wealthy for the communal use of today’s surplus productive labor.

The wealthy of today are so ignorant of how capital must be generated and expended to promote social stability that they invest and build to undo each other. One corporation moves outside the country to reduce its labor costs, causing unemployment here. Its competitors point to that event and force labor unions to give back wages and benefits. Still other industries see these tactics and do likewise. This may generate more profits for some corporations temporarily, but when the laborer receives less and less of his or her own productive labor to barter for goods and services; they obviously spend less, which hurts all manners of industries. Too much pressure on labor from the wealthy or from government will cause a downward spiral of economic activity, and an explosion of debt that cannot be repaid; resulting in a long economic depression.

Rather than lower capital gains taxes to promote resource availability, we can encourage wealthy individuals and the corporations they control to invest in our economy in times of economic decline by increasing their income taxes and capital gains taxes on a sliding scale, averaging 1% or 2% more tax for every 1/10% increase in unemployment and or every 1/10% increase in welfare recipients. We should set a benchmark of 4% unemployment and 5% welfare recipients, and begin with those whose personal income is in excess of $100,000 annually. This along with a law to limit dividends, interest receipts, and capital gains on investment outside our country when unemployment rises above 4%, will force the wealthy to turn over resource assets both to meet increasing tax burdens on their income, and to get the economy rolling again, which can result in having their taxes reduced. If capitalists believe that only the wealthy can lead us out of recessions and depressions, then we can persuade them to do so by threat of economic revolution, or coerce them with new tax laws. We should not have to beg or bribe them with tax reductions or other concessions.

© May 2009
Craig D. Hanks

Social Capital – Need of the Hour For India

Numerous incidents in recent times have concerned me about deteriorating social capital of the country. Rising crime rate, corruption, communal riots, rising regionalism, casteism are symptoms of it. India is currently in an enviable position demographically, with half of its population under 25 years. I too believe in its youth power. But got a big shock when a promising youth leader used language to divide people, breed hatred and spark riots, just to firm up his regional votebank. These incidents indicate declining social capital in the country and a misguided youth can become a liability rather than strength of the country.

What is Social capital?

It’s a set of informal norms in the society. The informal norms that constitute it lead to greater trust and cooperation in society. These informal norms are related to traditional virtues like honesty, honouring commitments, sincere discharge of duties, reciprocity etc. Maybe this is what makes Social Capital an elusive and ignored subject in public debates. A high social capital has not only social benefits but also economic benefits. Studies by World Bank have shown that social cohesion is critical for societies to prosper economically and for development to be sustainable. A perfect example would be Japan, who shattered in Second World War rose back due to its high social capital. For a modern stable democracy, social capital is sine qua non.

Can Government Play a Role?

Can government increase our stock of social capital? Yes, it can to some degree. The best way government can influence it is through education. Not any education but morals and values based education. The need of this education was emphasized long back by ‘Father of Nation (India)’, Mahatma Gandhi. But is being ignored as today’s education is more geared towards science and profession. Also a government which provides property and public safety breeds trust and cooperation in society hence indirectly creating social capital. Promoting organization of people for greater cause like environment protection, poverty eradication etc also strengthens society cohesion. More specifically to India, which is home of more than 100 languages, many religions, cultures and ethnic groups, any voice of separatism should be nipped in the bud, rather than allowing it to spin into vote bank politics. Separatist sentiments are a killer of social capital in the country.

Role of Non-Governmental Bodies

Many non-governmental initiatives like ‘Art of Living’ also go a long way in preserving the social capital and improving it. Spirituality opens ones heart and inspires one to live a value driven life. Indian public is very emotional, when it comes to movies. In recent times many movies like Rang De Basanti, Chak De India, Peepli Live etc., not only entertained but also sent across right message to public. In real life too, there are many stories which demonstrate human values and compassion. Media can play its role by covering these incidents, rather than sensationalising all negative incidents. Last but not the least, how a common man can contribute? For a start, follow the core values of his/her religion, which is based on moral values and love for humanity and is common to all religions. A common man would do just great by believing in ‘One World One Family’ and uphold moral values in work & public dealing.

Social Capital and Sustainability

But why should one worry about social capital at all? Yes, one can choose to ignore it as we become used to living in present conditions. But if we want to gift our children and their children a better world to live in, then we have to act now! And that is the basic tenet of Sustainability.

Some members of society employ unethical means to amass wealth, justifying it in name of creating better future for their children. Unwittingly they end up teaching unethical short-cuts to their children too. All unethical actions by members of society invariably flow and diffuse into the society, hence polluting it. Happiness of a person is a function of his surroundings & society too. Wealthy children cannot remain happy as the world around them grows meaner, corrupt, violent and polluted. No one lives in isolation, we are all connected and hence we can no longer afford to ignore the need to develop this all important but elusive Social Capital for our progeny and posterity.

Education Capitalization


Education carried out by government and also private sector requires a real operating expenses height. Most all sector is relating to education must be bought. Book, chalk, ruler, and teaching aid readily uses for example, must be bought. Therefore, education requires cost.

Presumption like that not then is followed up with closing eyes and ear with interest places forward commercial factor than social. Education is not commodity, but effort carries out system and certain mechanism that man is able to improve; repair their/his self, can make balmy itself, and solvent of interaction as man.

Education paradigm growing in Indonesia in this XXI century step by step has started leaves aspiration of the founders this republic nation-state that is that every citizen entitled to get education that is competent. The republic founders aware to that performing of the education are addressed to makes man is humanitarianly and can make process towards at fullness of spirit hence would very ironic with situation of education these days.

The Role of the Government and Private sector

Education is responsibility of all suborder. By referring this assumption, education organizer is not merely government but also entangles the side of private sector individually and also group. Thereby, governmental hoped all members of publics responsible educate Indonesian.

Despitefully, because of limitation of cost, governmental given opportunity of it’s bigger to public to participate and develops business through education. This assumption comprehended by public by building opening school, courses, or skilled education type with facility that is better than school build and owned government. By giving supporting facilities for education that is rather differs in, rather complete, and promises makes education managed the side of private sector must be redeemed with cost that is not is cheap. So expensive education.

Indonesia has ever owned Perguruan Taman Siswa carrying out education for public? People with motivation educate public? People. Indonesia also has education system of pesantren (Islamic models) which is not collects payment which in the form of money from it’s the student. Student in pesantren modeled this salaf (classical) not only studies public sciences (like biology, physics, mathematics, language, and art) they also studies Islam science for the sake of individual and public.

Without realized already happened friction of motivation of organizer and the management of the existing education. Education organizer of private sector tends to sells dream with equipment of facility which they perform. They disregard condition of Indonesia public most doesn’t have purchasing power and energy? Power to bargain. Pupil old fellow will be given on to reality “expensive school” and “go to school for rich man children”.

Of course, must also be confessed that the school requires cost. However, collects expense of height for education is a real wrong deed; more than anything else in Constitution 1945 has expressed that any citizen [is] entitled to get education.

Capitalist: Having Under the Law

Shifts it purpose of education levying from formulated by the Republic of Indonesia founders is really peeping out suborder concern. If education only be carried out just for man who is having money, hence the biggest layer of Indonesia public? People will not have formal education. Poor people and people, who don’t have purchasing power, will yield apathetic generation. Thereby, will lose also one civilization links a nation.

Education carried out with only menitikberatkan at present financial advantage will only make man is more individually and once in a while overrules that the man basically is created autonomous. Tendency and dependency to get it’s (the capital returns will make education product to enable all ways, machiavelistical.

Other side, education system this time makes detached man from it’s (the area and sometimes abstracted from its (the community root. Properly is critical that education system this time makes educative participant not autonomous and sometimes forgets spirit to as social creature or according to opinion Aristotle’s that the man Zoon Politicon.

Semestinyalah had if education aimed at accomplishment of copartner ship standard (company) must be refused. Ideally, education must load agenda for “humanizes man” (humanization), non dehumanization. By collecting expense of height because law barium; by itself education has been transferred to accomplishment of industrial requirement. More than anything else in Indonesia, diploma is respectable reference and the only equipment to get work that is competent.

By positioning education carried out by government and also law barium private sector must, public trapped at acute dilemma. In one public sides requires education to increase it’s the humanity reality, medium on the other side no cost is small monster or endless nightmare.

Tussle between fears and desire of public to send to school it’s the children exploited by certain party sides. This condition is a real condition profits if evaluated from the aspect of business. Panic buyers are really condition hardly to the advantage of my pelaku-pela is business.

Opinion: Education is Sacral Factor

Indonesia Public till now still of opinion that formal education is equipment the only to improve; repair life, to get work with good production, good salary, and to fulfill primary requirements, beside can boost up degree. This assumption by generations and always is looked after causing peeps out assumption and places formal education as thing which sacral.

Though all formal education, vocational school is not interesting means. As it’s (the impact, vocational schools teaching is skilled becoming not draws. Vocational school is school for member of marginal public. Vocational school teaching how facing and draws up life is assumed not elite and ancient. Despitefully, vocational school is not place of for rich man children, but majored for children from poor family.

Social Lameness as poison impact goad to school which only is enjoyed by rich man children will peep out oppressed feeling and not balmy among poor people. Poor public of which cannot send to school it’s (the children will assume it as destiny which must be received and assumes it as penalization of God. Irony, of course. But this is reality when schools becomes is expensive and poor people [shall] no longer have place in school.

Minister of National Education in Indonesia for the existing likely increasingly far from nationality vision. Even with movement of schools autonomy increasingly clearly shows capitalization symptom of education. Now education is managed by using management of business that is then yields cost is sky. Expense of education more and more expensive, even impressed has become business commodity for the owner of capital (capitalist). By using pre-eminent school label, favorite school, peer school etcetera expense of education increasingly strangles poor people. Our education increasingly grinds marginal clan. Where situation of our education justice if certifiable school of that is just for they having money only?

While as man who sure is normal of public will choose best life. However, because of its (the disability and its (the kepicikan in looking at education problem, its (the objectivity is also disappears. Indonesia Public of course requires resuscitation that education is one essential part to improve; repair quality of it’s (the humanity. Of course, there is no guarantee that education will make people to become rich, influential, famous, and in command.

Cover? Conclusion

Debate of length still need to be strived before Indonesia public can look into formal education as not the only equipment to improve; repair its(the life. Public must realize formal education is not as of its (the pitch.

Resuscitation need to be trained to pebisnis. School that is till now is viewed as the only equipment which able to be used to reach for and can realize its (the aspiration is not farm to get advantage. Therefore, not righteously school utilized as means to make a living. In school still and ought to slip between idealism, so that there is no reason again to expensive of education that is with quality, complete supporting facilities, and has various facilities.

Other alternative is publicizing intensively that non diploma required but ethos and hard work, motivates to build their/his self, and desires to live in better front must be inculcated early. Public must be awaked that becoming public servant is not the price of death.