Posted on by Art Powell

As one surfs the economic forums of Medium and other media one often sees the word “capitalism” in the headlines but mostly I ignore these items because the word’s definitions are generally so vague the word is meaningless. Because capitalism is such a meaningless word it is something in which we can believe while ignoring a less pleasant reality.

When we study economics we can try for an honest understanding so we can solve problems and reduce human suffering or we can seek rationalizations for things which will make us rich in spite of exploiting others, destroying the environment and overusing scarce resources. If I were the chief executive of a large corporation or a politician I would want the second approach to economics. Guess who pays the salaries of most economists. This blogger makes no money out of his study of economics, so he can take the first approach.

The main feature of the economic organization with which most of us are familiar is that a lot of it is based on legislation which restricts competition. Patents, copyright, licensing and subsidies all work to restrict competition and/or distort prices. These are so pervasive that we cannot say we have competitive market economy.

The problem with a perfectly competitive economy is that it does not allow for profits. Competition reduces profits until each firm makes wages and a return on investment but no profits. If one wants profits one needs government to pass legislation to restrict competition and most current governments are happy to oblige. Once upon a time this blogger used to make pottery. I suggested that in order to make a good living we should form the Canadian Potters Association and get the government to pass legislation that all the people in Canada should eat only from dishes make by members. Other potters laughed but lots of other occupations have that legislation: teachers, doctors, lawyers, septic tank installers, most large corporations (patents and copyright), etc.

Like lots of other people I would like to see an economy with more equality and less exploitation. I believe the best way to get it would be to have more competition. To get there we should repeal or at least reduce copyright, patent and licensing legislation and drop all subsidies.

This would leave many people exposed to economic adjustments which often cause suffering. A guaranteed income scheme would be a better way of coping with these problems than restricting competition.

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Filed under: Economics | Tagged: capitalism, copyright, Economics, equality, exploitation, guaranteed income, licensing, patents, Perfect competition, profits, subsidies |