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Capitalism: The People’s System

Capitalism is often painted as this demonic economic system that only benefits the rich while robbing the pockets of the poor. This is simply not true; capitalism is an economic system that naturally occurs. It is not a hypothetical economic theory that can only exist within utopian circumstances; it naturally exists in a free society. People argue that capitalism is a heartless system. This is absolutely true; capitalism is not a human being. Capitalism is an economic system that is not capable of experiencing human emotions. When the self-checkout at Walmart says “Thank you” after every transaction, a rational being does not actually expect the machine to have felt gratitude because it is incapable of any type of feelings. 


Business is not personal. This is an important sentiment held by many in a capitalistic society. This sentiment softens the blow when a manger has to layoff their employees. In capitalism, it is not rational to retain employees that you do not need. When jobs become obsolete, it is not wise to keep those positions filled, especially when less expensive options become available. Though people may be angry that they lost their jobs, they’d certainly understand that it was not a personal decision, but a necessary one. You cannot spend more for a service simply based off of emotions; that is irrational. If we were to continue to allow irrationality to play a role in our decision-making process in regards to spending, then we would not be able to save, invest, or profit off of our money. 


Capitalism takes two to tango. There has to be a market for a product for that product to exist and maintain profitability. There also has to be a market of people willing to produce that product. The cost of production is set by the producers of labor. If a someone offers you an insultingly low wage (say $7.25 an hour) for your labor, you have the ability to either negotiate a higher wage or refuse the offer completely. You also may accept the offer; maybe you consider this a fair offer for the product of your labor. Low-wage jobs exist because there is a market for their existence. As long as their are people willing to work for low wages, there are going to be employers that offer those wages. 


What would happen if people altogether stopped working for low wages and instead only accepted positions for $15.00 an hour? Some businesses would not be able to support employees at $15.00 an hour and would therefore fail in the market because they would be unable to offer a competitive wage. Other, more prosperous, businesses, would be able to offer the market wage to their employees. Some businesses may choose to operate in other countries. 


Regardless of what happens, a free market society gives both employees and employers the power to negotiate the cost of labor. If people no longer want to work for low wages, they need to stop working for low wages. Businesses in a free market want to produce the most efficient product at the lowest possible cost. In order to do so, businesses strive to find the highest qualified candidates at the lowest possible costs. People seeking employment have the ability to negotiate their cost and are not required to take positions that they are overqualified for or do not pay your price. 


Capitalism is the only economic system that could exist in a truly free society. It allows for private ownership of property and labor. The is no limit on how prosperous you can be in a truly free market (which is not the current market present in the United States, but that’s another discussion for another time). If you do not want to work, you absolutely do not have to. There is no requirement by law stating that you must work. If you do not produce, you do not profit.

 

You could choose to work hard at a tireless, thankless job and earn very little doing so. There is no requirement by law stating that hard work must pay off. You could perform difficult tasks for long hours every day for the rest of your life and still earn very little. The point is you make the final decision in terms of the price of your labor. 


As a consumer, you also have an abundance of power in a capitalistic society. If a business continues to offer an ineffective product, they will lose their customers. If they lose their customers, they will no longer be profitable and will go out of business. If you are dissatisfied with your end of the deal as a customer, you do not need to purchase that business’s product. You also have the First Amendment protection to express your dissatisfaction with a particular business. Enough negative reviews may deter future business transactions between that business and other customers. 


Capitalism is not a one-way street. The ideas in this post may not be very descriptive, but they serve the purpose of portraying capitalism as an economic system that benefits members of all classes. Furthermore, a system of checks and balances develops in a free market. Consumers will not do business with people who engage in unfavorable business practices. People can choose to not work for low wages through negotiation or refusing offers completely. Businesses can choose to not pay their employees a higher wage and can still prosper. These are only a few example of how everyone benefits from capitalism. Capitalism is, without a doubt, the only economic blueprint that respects and protects individual liberty. 


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