Saturday, November 7, 2009

The Capitalism Tax

Free market capitalism constitutes a system whereby concentrations of personal wealth can be leveraged to purchase more wealth from an enterprise via investment. Since all wealth must be produced, and the act of investing produces zero new wealth, profits are derived from those who did the work to produce the new wealth in the given enterprise (from which the profits to the investor are derived). Wealth being transferred from its producers to others who contributed nothing is what I call the capitalism tax. The bulk of the wealth accrued by the richest people in the U.S. and the world, is investment income.

Further, since the producers (the workers) didn't necessarily consent (due to their relative bargaining position quantified by their relative personal wealth--many must consent to do the work due to the need for necessities for survival) to their labor being taken, profits derived from investment constitute a form of theft.

Obviously, since having wealth is the most efficient means to gaining more wealth under a capitalist free market, while it must be 100% produced by labor, the snowballing continual concentration of wealth constitutes an economic system which is dysfunctional and unsustainable.

And of course, profits again are leveraged on the consumption side of the equation by those in a greater (wealthier) bargaining position. One of the best observable examples of this is when, during the GW Bush administration, gasoline prices skyrocketed simultaneously with record oil company profits.

The capitalism tax is further exacerbated when wealth (leverage) is accrued to the point where benefits in terms of government laws and regulations are again simply purchased.

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