Operating properly, Capitalism provides the best system yet devised by man to ensure the optimum use of natural resources, and to enable widespread prosperity. Capitalism punishes waste of labor and resources, while it encourages efficiency, invention, and innovation.
Capitalism, to use a trite saying, continually builds better mousetraps. Capitalism is primarily responsible for the success and prosperity of these United States of America; nobody could effectively argue otherwise. There simply is no better economic system. However, Capitalism contains within its own rules the seed of its own destruction. Only government can save Capitalism from itself.
The rules a good capitalist must follow are these: 1. Expand or die, 2. Increase market share, and 3. Absorb or eliminate competitors. When followed diligently, these rules lead to a business’ success. But these rules ALSO lead inevitably and quickly to Monopoly, which represents the FAILURE of capitalism. Competition is the essential ingredient of Capitalism. A Monopoly destroys competition.
Competitors seek to achieve efficiency and quality, the better to sell more of THEIR product than their competitors, and at a profit. Inventors seek better ways to solve people’s problems, and progress results. Capitalism results in better, cheaper products, and “the market” determines winners and losers. Specialists can concentrate on a higher quality product (rather than a cheaper product), and if a sufficient market exists for that quality, that specialist can thrive.
Monopoly destroys all the advantages of Capitalism. In a monopoly, the advantages of a competitive market vanish. When a monopoly controls enough of a market, it can set its own price. Through mergers, or buy-outs, the monopoly can eliminate competition. None of the efficiencies or inventiveness seen in a properly operating Capitalist system need concern a monopoly; a monopoly makes its own rules. Profit supplants every other concern. And a monopoly can be one company, or a few with cooperative goals, working together to control a market.
Government first confronted the trend to monopoly in our Capitalistic system when Teddy Roosevelt was president at the turn of the last century. Big industries like the railroads and steel manufacturers had become so big, and with so few owners, that the problems associated with monopoly were obvious, just as it was obvious that Capitalism was failing. This forming of monopolies was to the detriment of our entire economy.
Teddy Roosevelt addressed this problem by passing the Sherman Anti-Trust laws. In the interest of saving Capitalism and in turn the American economy (and, in truth, the WORLD economy), the government intervened and prevented any single owner from monopolizing a controlling segment of any industry.
Over the decades, Anti-Trust has been imposed to try to keep monopolies from forming. This effort continues, as our economy diversifies with new technologies and heretofore unheard-of product development (video games?). Still, there are those who would oppose Anti-Trust actions, and stand in favor of large industry getting as large as they want. These people downplay the hazard monopoly brings to our economy. In many cases, these are politicians who benefit from contributions FROM these large industries. The Citizen United Supreme Court decision opened the floodgates of political contributions, and other laws enable contributors to keep their contributions SECRET. If we do not remain vigilant, Capitalism will be allowed to die. Teddy Roosevelt is not around to save it again.
Submitted by Jeff Harrison.
