|Spiritual and Practical Socialism
CAPITALISM'S LAST DAYS. Capitalism's last days are foreshadowed through the
immense contradiction which exist between its ambition, higher profits through cost reductions,
and needed revenues, undermined by these cost reductions. The competitive capitalist
battlefield dictates cost reduction as a matter of survival. The firm substitutes technology for
labor during this effort. This is great for the firm which monopolizes the temporary gain from cost
reductions, not so good for the larger economy which endures the cost of lower income.
Competitors repeat the labor reducing technological investment, each enjoying a momentary
boost from lowered labor cost, while the larger economy bears the brunt of lost income and
At the end of this process, we are left with equal or greater productive capacity, but less income
to support it. Lower consumer income reduces corporate revenues, stock prices fall,
perceptions of corporate risk rise, debt values fall, leveraged investors are forced too sell assets
to cover shrinking equity margins. All of this downward pressure on asset values results in a self
reinforcing downward spiral and at the end of the day, debt exceeds supporting asset values.
Consequently more defaults occur, consumer spending takes another hit, more people become
The pace of technological development is so fast, the capitalist economy so dynamic, that the
crisis cycle of over-investment and reduced incomes speeds-up. The resulting addition to the
mass of unemployed creates social unrest. Society cautiously holds it collective breath.
But does it have to be this way? If we see this coming, if we understand the current capitalist
model is digging its own grave, then changes can be made which avert the unrest.
Two approaches can help us avoid potential disaster. One, a practical is interim approach, the
other, a deeper philosophical destination.
First the practical. Many policy measures can be taken to spread income to those who both need
it and who through the consumption of a major portion of their income will support productive
capacity. We can start with a Basic income Guarantee (BIG) . It is check granted to all citizens
regardless of income or wealth and it reduces the vast bureaucratic screening expenses
associated with other transfer programs. It can be modest, or great, depending on other forms
of available income and the degree of inflationary pressures present in the economy.
Next, a federal jobs programs. This is a guaranteed jobs program which pays a livable wage for
work directed through non-profits and government agencies for services tailored to meet
community needs. Modern Monetary Theorist are great advocates of this approach.
How to pay for the above? Many ways. Added progressivity to the tax code, government equity
and debt positions in large corporations, and net public money. Net money creation occurs
when the federal government spends money into creation in excess of the money that it takes
out of the economy through taxation and borrowings. Co-incidentally, net money creation will
also help fight off global deflationary pressures which have occurred, and will continue to occur
as paid-for labor is replaced with technology.
These are interim practical solutions, an accommodation to the capitalist model. Ultimately we
need to move beyond the greed based capitalist scheme towards a cooperative model. This
takes us to the dreaded "S" word, you can call it whatever you like, but eventually its going to be
called Socialism. Americans generally fear the term. It is associated with the Soviet failure. It is
thought of as anti-religious, anti-individual, anti-prosperous. None of which is true, or need be
true. We can make socialism to be whatever we want it to be. There may be as many socialist
concoctions as there are adherents to its ideals. They range from highly idealized versions of
Christian Socialism on one end of a spectrum to the scientific version of Marx on the other end.
Socialism, first and foremost, is a philosophy based on cooperation. It encourages full individual
spiritual and physical development which is then offered in service to the greater community .
With growing orthodoxy among various world religions, socialism can be promoted as consistent
the ideals espoused in the scriptural teachings of these movements. This contrast sharply to the
capitalistic individual competitive model, which seems to conflict with the teachings of most of
these orthodox movements.
So, we have a choice. Capitalism or Socialism?
Capitalism's warring nature has brought us to where we are and leads us to a dismal near-term
future. More capitalism will not fix the problem. Socialism is the alternative. In many ways, it is the
fulfillment of many of our humanitarian and religious ideals. It represents universal brother and
sisterhood. It is a "Kingdom Come, Thy Will be Done, On Earth as it is in Heaven" destination.