Capitalism

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Although Solecopedia proposes and promotes the solidarity economy as an alternative to the conventional capitalism, it is fundamental to define the capitalism and to recognise its faults.

Definition

Capitalism is an economic system of the capital, by the capital and for the capital. In other words, those who possess capitals (money, land, buildings, production tools etc.) enterprise directly or borrow them from somebody else in case they do not have the whole set of capitals, and in the latter case the contributors of capital = the capitalists own this enterprise collectively in accordance with the amount of capital they brought, entitled to charge profits in case this corporation makes money. For example, in case A offers US$10,000, B offers US$20,000, C offers US$30,000 and D offers US$40,000 to set up the E corporation (capital: US$100,000) which churns out the profit of US$50,000, A will be entitled to receive US$5,000 as dividend, B to receive US$10,000, C to receive US$15,000 and D to receive US$20,000 (actually they cannot receive that much, as a good part of the profit should be reinvested). The word "share" (stock) means this portion for each stockholder.

Common misunderstanding

Some labour unions tend to identify the CEO with the capitalist, which is not always true. This understanding is applied to those enterprises in which a single person puts (almost) the whole amount of capital to the enterprise managed by himself/herself, but many corporations, especially big ones, do not belong to this category. The CEO is only the person in charge of the management of the corporation who is appointed at the General Assembly, in other words the CEO is just an employed manager who himself/herself is not a capitalist. However, it is right to say that he/she represents the stockholders' = capitalists' interests, as he/she works every day with the aim to maximise the profit for them.

Faults of the capitalism

The following can be pointed out as faults of the capitalism:

  • As its main goal is the maximisation of the profit to the stockholders = capitalists, it tends to shrink to the minimum the workers' salary, costs to protect the environment, etc.
  • As the enterprise is the capitalist's private property, workers there cannot participate in the management of the very enterprise they work for, lacking a democratic management.
  • Especially those rich in financial resources tend to rule over the weak ones (the colonialism was a fruit of the capitalism). Even today institutions like World Bank and IMF (International Monetary Fund) work as tools to allow the North to rule over the South.

To get over such a picture we have today, one of the main goals of the solidarity economy is to achieve a balanced development for the whole world.