It fundamentally is NOT a pyramid scheme. In a pyramid scheme there is no actual product or service of value and simply extracts wealth from the people in lower tiers. Value, or wealth, is simply the byproduct of an equitable transaction between two or more parties.
Unregulated capitalism places all of the power in the hands of the wealthy. Even with the amount of regulation in place, the last 4 decades has irrefutably proven that. The transfer of wealth from the bottom 95% to the top 5% has has been insane.
The only reason we need so much regulation is because people are garbage and if they can gain something for nothing, they will. You cannot consider the pure idea of capitalism without also considering the reality of human nature, that it is inherently going to create a pyramid scheme like situation where the top transfer power and wealth to themselves in the largest quantities they can, in spite of pesky things like laws and taxes.
Yes that is true, and you can view wealth distribution as pyramid shaped, but that is not what a pyramid scheme means. As noted the system is very good at producing massive amounts of commodities, distributing them all over the planet, and exchanging them for your labor. If capitalism did nothing useful it would have disappeared long ago.
Except that you’re describing commerce, not capitalism. Capitalism is the idea that the commerce has value, and that one can own the value of the commercial activity. Further, the value of the business is tied to it’s growth.
Further, products and services are never exchanged in an equitable transaction between two parties, because capitalism necessitates a third party, the capitalist. The capitalist must acquire products and services from employees for less than their true value, and then sell them to consumers for more than their true value.
And because capitalism demands growth, one or both of those two margins must continue to expand. This means workers must be pressured to work for less and less, which is why the capitalist opposes social services, universal healthcare, and affordable housing. This also means the capitalism opposes consumer protections, environmental protections, and taxes that provide a functioning society that might interfere with their growth.
Now what happens when every producer and consumer is fighting for the same margins, the same advantages, and the same growth? Then the capitalist seeks new avenues for new capital and new capitalists. Building business on ensuring the growth of business for other capitalists. Selling the idea that you, too, can join us at the top of the pyramid, all the while kicking down ladders they climbed to get there.
So no, the system itself isn’t a pyramid scheme. It’s just an idea that encourages pyramid schemes because it relies on impossible growth, like a cancer eating away at society.
No, fractional reserve banking demands endless growth because debts can’t be paid off with interest since the extra money to pay the interest didn’t initially exist. Therefore, banks have to lend out more money they don’t have so the prior debts can be paid off but in the process they create more debt. But those following loans come with more interest which leads to the insatiable need for more growth in the economy by loaning more money.
Further, products and services are never exchanged in an equitable transaction between two parties, because capitalism necessitates a third party, the capitalist.
Hang out with small business owners and you’ll find lots of examples of two party exchanges. The closest thing to a third party is when there’s a contract dispute that involves arbitration or a lawsuit.
The capitalist must acquire products and services from employees for less than their true value, and then sell them to consumers for more than their true value.
This isn’t capitalism, this is employment. Employment has been a feature of most economic systems over the past few thousand years. It’s important to ignore Marxist theory on employment and alienation because is relies on cherry picking facts to create bizarre and blatantly false narratives.
This sentence also packs in a misunderstanding of how value is generated in all economic systems, not just capitalism. The migrant worker is an economic staple in most (if not all) societies that engaged in agriculture. Take the Roman economy for example, migrant workers lack any property ownership themselves and so must sell labor for money. In the absence of tools, property and seeds, they are not able to generate anything of value for anyone else. A wealthy Roman farm owner has more land than they can work themselves. Without workers, their land has some value, but much less. When the farmer purchases labor for money, more food is produced than was consumed by both parties over that time period. If an excess of food is not generated, then somebody starves. The same thing holds for McDonalds. McDonalds owns a trademark, a marketing organization and a supply chain; all of which are useless without a restaurant. A franchise owner purchases access to the systems that McDonalds owns in order to create a restaurant. The restaurant is useless without a fry cook. The fry cook operates the kitchen gear in the restaurant in order to produce food for consumers. It’s important to note that without the restaurant, the marketing and the supply chain, the labor of the fry cook is work very little.
And because capitalism demands growth
The demand for growth is not specific to capitalism. Economic systems that don’t exhibit growth either can’t physically support a growing population (with things like food or shelter), or the average standard of living decreases. Both of these situations are difficult to sustain for any political system.
It fundamentally is NOT a pyramid scheme. In a pyramid scheme there is no actual product or service of value and simply extracts wealth from the people in lower tiers. Value, or wealth, is simply the byproduct of an equitable transaction between two or more parties.
What a ridiculous take.
So you make all your own products?
Of course you don’t. You participate in the free market like everyone else has for thousands of years.
Just ask people who have survived socialism why they had to escape from your terrible ideas.
This is a bot isn’t it?
Transactions are often not equitable, and most wealth bubbles up to the people on the top tiers.
Markets are not always fair or efficient but that doesn’t mean capitalism is a pyramid scheme. It is still very much the opposite.
Unregulated capitalism places all of the power in the hands of the wealthy. Even with the amount of regulation in place, the last 4 decades has irrefutably proven that. The transfer of wealth from the bottom 95% to the top 5% has has been insane.
The only reason we need so much regulation is because people are garbage and if they can gain something for nothing, they will. You cannot consider the pure idea of capitalism without also considering the reality of human nature, that it is inherently going to create a pyramid scheme like situation where the top transfer power and wealth to themselves in the largest quantities they can, in spite of pesky things like laws and taxes.
Yes that is true, and you can view wealth distribution as pyramid shaped, but that is not what a pyramid scheme means. As noted the system is very good at producing massive amounts of commodities, distributing them all over the planet, and exchanging them for your labor. If capitalism did nothing useful it would have disappeared long ago.
Global south would like a word.
Like every proponent of capitalism ignores the cheap labor and blatant theft of natural resources the rich nations need to make the line go up.
It’s not the virtue of capitalism that makes our lives so luxurious. It’s the suffering of the rest of the world.
I don’t disagree. Although it is still not a pyramid scheme.
So, a reverse funnel system? 🙂
Except that you’re describing commerce, not capitalism. Capitalism is the idea that the commerce has value, and that one can own the value of the commercial activity. Further, the value of the business is tied to it’s growth.
Further, products and services are never exchanged in an equitable transaction between two parties, because capitalism necessitates a third party, the capitalist. The capitalist must acquire products and services from employees for less than their true value, and then sell them to consumers for more than their true value.
And because capitalism demands growth, one or both of those two margins must continue to expand. This means workers must be pressured to work for less and less, which is why the capitalist opposes social services, universal healthcare, and affordable housing. This also means the capitalism opposes consumer protections, environmental protections, and taxes that provide a functioning society that might interfere with their growth.
Now what happens when every producer and consumer is fighting for the same margins, the same advantages, and the same growth? Then the capitalist seeks new avenues for new capital and new capitalists. Building business on ensuring the growth of business for other capitalists. Selling the idea that you, too, can join us at the top of the pyramid, all the while kicking down ladders they climbed to get there.
So no, the system itself isn’t a pyramid scheme. It’s just an idea that encourages pyramid schemes because it relies on impossible growth, like a cancer eating away at society.
No, fractional reserve banking demands endless growth because debts can’t be paid off with interest since the extra money to pay the interest didn’t initially exist. Therefore, banks have to lend out more money they don’t have so the prior debts can be paid off but in the process they create more debt. But those following loans come with more interest which leads to the insatiable need for more growth in the economy by loaning more money.
Hang out with small business owners and you’ll find lots of examples of two party exchanges. The closest thing to a third party is when there’s a contract dispute that involves arbitration or a lawsuit.
This isn’t capitalism, this is employment. Employment has been a feature of most economic systems over the past few thousand years. It’s important to ignore Marxist theory on employment and alienation because is relies on cherry picking facts to create bizarre and blatantly false narratives.
This sentence also packs in a misunderstanding of how value is generated in all economic systems, not just capitalism. The migrant worker is an economic staple in most (if not all) societies that engaged in agriculture. Take the Roman economy for example, migrant workers lack any property ownership themselves and so must sell labor for money. In the absence of tools, property and seeds, they are not able to generate anything of value for anyone else. A wealthy Roman farm owner has more land than they can work themselves. Without workers, their land has some value, but much less. When the farmer purchases labor for money, more food is produced than was consumed by both parties over that time period. If an excess of food is not generated, then somebody starves. The same thing holds for McDonalds. McDonalds owns a trademark, a marketing organization and a supply chain; all of which are useless without a restaurant. A franchise owner purchases access to the systems that McDonalds owns in order to create a restaurant. The restaurant is useless without a fry cook. The fry cook operates the kitchen gear in the restaurant in order to produce food for consumers. It’s important to note that without the restaurant, the marketing and the supply chain, the labor of the fry cook is work very little.
The demand for growth is not specific to capitalism. Economic systems that don’t exhibit growth either can’t physically support a growing population (with things like food or shelter), or the average standard of living decreases. Both of these situations are difficult to sustain for any political system.