Capitalism isn't working! Has time proved that it never can!

In my view, the current global economic crisis is the result of rampant global capitalism.

Industry used to employ 100's of millions of people, albeit at minimal wages, in order for the owner of the means of production to become grotesquely wealthy at their expense. Now expand this over a global scale, millions of factories making the products that we all use on a daily basis, without a second thought about who made it or the conditions they were forced to work under. Now pay all of these hundreds of millions of people a paltry wage, so paltry in fact that none of them can any longer afford to buy the products they have all contributed to making.

Now bring mechanisation into the picture! You've just made millions unemployed as their jobs are now being done by a robot, that can work 24/7, 365 days a year without a break, holiday or needing sick pay. The owner of the means of production still needs to charge the same for the product as he has to repay the banks for lending him the money to buy the robots, but he/she is still getting richer, until one day he realises that as all of the other great production houses have done the same, there are no longer any customers that can afford to buy their goods.

This factory can no longer sell their products, as all of the others, they all start to go bust and they can't afford to repay the bank loans.

Meanwhile, lots of the previously employed people are now on the dole and they have defaulted on their mortgages and the homes are reposessed, thus pushing down the price of homes and making the banks jittery about lending money to anyone at all.

You still have a very small amount of incredibly wealthy people, multi billionaires that have become rich at the expense of the other 6 billion of us that have been forced to pay over the odds for just about everything.

Result - the current global economic crisis.

But Socialism/communism can't work either as each of these political strategies rely upon altruism and absolute honesty to work as they should, but us weak humans are not that way inclined, sadly, many of those that end up in the seats of power are corrupt and far from altruistic.

Where do we go from here? Answers on a postcard please to your nearest honest, altruistic and incorruptable politician.

About right about the inventions Glen. the difference between all innovations and what we need is that we cannot eat the new gadgetry and before fuel, filthy lucre and so on the main thing we need is nutrition. Until an alternative is invented, all else is actually surplus to need.

Jon, careful, Finn Skovgard will come down on you with his full weight if you praise Denmark too highly. He is Danish.

Ever been to Denmark?

Small communities club together to buy their own turbine, if you move into such a village you will take over the "wind share" from the previous owner.

The Danes have got over themselves on this one, most Danes are blind to them now, its become such a part of the landscape that hardly anyone notices them. I have lived with them in large numbers for over three years and I cant say I really notice turbines them - the UK "not in our backyard" response seems like a storm in a teacup from that perspective - sure national parks and so on get exemption but apart from that I really dont understand the fuss, I find them rather elegant.

As a small business owner and rather large energy consumer I shifted our entire energy demand over to 100% guaranteed wind energy and I was delighted to hear it on the grape vine that at least one of my local competitors who I know keeps careful tabs on my website and PR shifted over to wind and added a similar "we are green" page to his website.

People are a little cynical though - most who see our green initiative webpage interpret it as just another company trying on the "green coat" to attract new customers which could not be further from the truth, we advertise it in the hope that businesses take note of what other businesses are doing and it seems to have worked at least once. I am content to be mis-understood - the net result was a positive one.

I've always said "the more you know the more you realise you don't know"

I've been told this is not my own "quote" but it was original to me at the time.

The conclusion...ignorance is bliss!!

Profit growth and forecasting could be dealt with swiftly be reintroducing Bubonic Plague, burn down the centre of London (and a few other metropoli) and rearming the Mongol hoards... Which is equally as fantastic as the projections that are largely designed to keep gullible investors in their boardroom seats and not rushing off to put their money elsewhere.

Just think of how awful life would be if we knew all the answers? It would be like knowing exactly the date on which we would die.

The problem remains though with often totally unrealistic growth demands. As an example there remains the predication that growth in commercial terms can be a constant year on year thing. This ignores completely social conditions. That last year might have been a great year for whatever reasons and had profit growth of say 15% doesn't necessarily mean it will do the same next year and the year after that.

Thus is where profit forecasting can be more like fantasizing. I have found over the years that many Company Reports and Forecasts must have been written by congenital idiots who must have shared the same cells as those who write Customs Duty rates.

Norm, the more you know and more you have been educated then the big the bloody jigsaw puzzle and the smaller and fiddlier the pieces. The puzzle is never finished either. So who is better off? It's a kind of uneven tie I think.

Now who is thick Norm? You said the same as me below in English wiv lotsa 'ard words.

Incidentally, with all the typos and so on, and your continuing Darwinism theme, I am a fellow of Darwin College and on one occasional the master's secretary sent me a message that she typed whilst having a sneezing fit (as I learned later) in the days before letter heads could be put into emails. The top line read: Drain College!

I think you are too kind. Do you know what is fascinating though about being ignorant?

Life becomes a giant jigsaw puzzle, and you find pieces that fill in gaps which keep you involved. Yet all the time you know you can never finish the puzzle.

Odd isn't it?

Obsession came with the Industrial Revolution and the kind of mercantile competition it created. So that producer A had to make better than B and trader C could do better deals that D and then more and more needed to be invested in production. More raw materials, more workers to pay, etc and then prices went up to compensate so workers needed higher incomes so worked longer hours, produced more and flooded markets so that prices went down. Then wages went down, production stagnated and clever entrepreneurs kept an eye out for the market gap. Investors were behind good bets (and a few bad) and bankers loaned them the money. Standards of living gradually rose and with them expectations for a better life. In the end the reserves (for instance, the famous stack of gold ingots in bank vaults) were worth less than money in circulation, much of which was debt but finance was still required therefore new debt created. Give it 150 or so years and in the direction of 97% of all 'money' does not really exist but has been created. Since populations grew apace improved living standards, so too demand for goods, services, homes, etc and more and more will need to be created until the bubble bursts. OK Robert? Tough one that, trying to sum up so simply and in as few words.

Makes perfect sense..thanks!! I hadn't thought of the demographic increases. Told you I was

I remember reading last year that Japan was "happy" with zero growth for the last ten years or so. It made me conclude "it" was a shareholder led necessity which I'm sure some of it is??

You are far from it.

In Marketing terms 'growth' is regarded as essential generally, which in most cases means swiping those shares of the market sector that others have got, rather than growth 'per se'. In other words growing at the expense of others by offering the better mousetrap. In this context it is no bad thing as in theory at least it leads to better products and/or services through competition, where in a Darwinian process the weak or less efficient go to the wall.

Growth of course also reflects Demographics. The balance between those dying and those being born defines the markets of tomorrow. This is where a combination of being able to assess Demographics and Psyschographics is important in business. the Demographics can be reasonably be projected as 'facts', and Psychographics less accurately as predictions as to what people will want to buy in the future.

I think it is fair to say that Marketers have got it about right as far as it goes, but overall 'wants' have probably gone too far, too fast, and we (me included) have made possession and ownership an end in itself, which has create what we now call the 'Consumer Society'.

A major problem has been that sheer population increases have led to frenetic competition and we simply don't have the time to consider the longer-term effects of our actions. Again to use a useful Australian euphemism it is sometimes 'hard to remember the original need to drain the swamp when you are up to your arse in alligators'!

Who said Life was meant to be easy?

I am told that a knowledge of Latin makes it easier to learn other languages too?

I always maintained that I spoke English, Yiddish (untrue) and Rubbish, and I often got paid for the Rubbish (untrue Guv - honest!).

I envy you the benefits of a good education, I've battled with my own ignorance all my life.

Love this reply and "respect" to all the contributors who have served to make me realise how thick I am. Learning a great deal though. Thanks to Glen for opening the debate.

Could someone explain why the system as it is, is obsessed with growth. Why is growth important/necessary. I would have thought it promoted/allowed inflation??

Thanks in advance

Nutshell, pure nutshell Norm.

Japanese companies and banks on the whole have an ethos westerners do not understand. Unfortunately, a few Japanese noused up on 'how the west was won' (by finance) gave it a whorl and went bottom up. The rest was so interconnected with the world economy anyway, that it went 'ping' too that it was carried along with the tide...

I did Latin at school, I was the only one on our estate who did, that and other Latin 'proverbs' adorned a few walls. I even daubed a few Ancient Greek ones too, but they never quite had the same ring. What you had was one of the finest ones of all, worthy of a very long detention if ever caught using it!

None of these things are deniable, and I agree with them, but again I still contend it is the ABUSE of the system and not the system itself, and any system of whatever colour, creed or form is going to be vulnerable to just that.

Re. Japan, I was under the impression that their laudable system of capitalism had also gone belly-up for similar reasons, and again (as I imperfectly) understand it through it being abused or misused.

Ditto re. the pension scheme but mine, and my wife's were deliberate Government actions by Australia where 'as there is no Protocol between Australia and France, you cannot receive your pension'! Four years of chasing was finalised when we simply gave up, which of course is the sole role of politicians and civil servants to give you the run around until that's precisely what you do, and get on with your lives.

I remember I used to own an old ex-War department Norton 500cc motorbike in my 'yoof'. On the tank someone had expertly painted under the logo the words 'Nil Illegitimi Carborundum' which being the ignorant yob that I was, I thought was quite classy, until someone far cleverer than me pointed out that it meant 'Never let the Bastards Grind You Down' (which I am sure you knew).

I prized it even more when I understood that! I have also always tried to act on it, although it has been very hard sometimes.

Hope you enjoyed the espresso. Japanese capitalism is quite unique because of its ethos, one that the like of M. Arnault with his Luis Vuitton, etc, empire does not get the hang of.

The banking world is there because there is debt. For every Euro created there needs to be a Euro debt. Banks begin with nothing of their own in theory and get something from nothing, which is the interest repaid on the debts, usually loans, repayable to them and also by default what can be recovered from what we think of as actual debt which they sometimes do not recover. However, whoever does not have debts but savings actually only has money the bank is using with them which they convert into debts on which they gain repayments that includes the savers' interest. It is then hard to understand that when all of that goes wrong because of massive debt default, that both savings and the nature of money we have in our normal 'current' accounts suddenly no longer exists. We lose for effectively speculating but also for having them look after our money for us.

Where that has gone terribly wrong is that they always have reserves that are used to rescue the bank, hence the pay offs to departing executives and their sometimes surreal pensions for losing 'our' money. We only see the fortune of others and measure that against our losses or those of our peers who might have been us. I have certainly entirely lost a pension I paid into for over 30 years and when I attended a meeting in London saw the anger of other people and after a while gave up and left because there was nothing to regain anyway and anger was going to acheive nothing. But I understand the people nonetheless. Banks have created a world without transparency, the inability to make amends and, in my view worse, the abilities to explain the apparently hypocritical preferential treatment of a CoE over investors and offering real apologies.