Why I’m Not A Free Market Capitalist Neoliberal

This article is part of a series
Supply Side Ponzi Stories
I'll polish this up in July

First things first, I’m not a communist or a communist who masquerades as a socialist and I’m not also going to post some compilation or countdown about the various horrors of capitalism and how capitalist greed and incentive helps to screw over the consumer, the competitor, the manufacturer and merchant. I’m going to keep it very simple. So simple that I won’t even be talking about anything about how good companies go wrong under bad management. This isn’t going to be a blog article about bad management or about the advantages and disadvantages of competition law and Sweden and Germany style high industry regulation.

I don’t like NFT’s and the current trend to get rich quick from running startups (even though I contradictingly run them myself) because I don’t believe in Free Market Capitalism and I’m against people and companies trying to profit from speculative value instead of labour value. But that’s a whole different topic for another time. I’ll link it below at the bottom of the article.

I’ll keep it simple so simple it is. Here goes!

My explanation

I’m not a free market capitalist. It’s an oxymoron and it cannot work in the real world, it’s infeasible. It can only work in cartoons.

ShitCoin & Buttcoin - comedy

If you ask those british capitalists (or wherever like Ron Paul, Ayn Rand, Margaret Thatcher, Ronald Reagan) who hate paying our high taxes, what political ideology they believe in from an economic standpoint, they will often say that they believe in Free Market Capitalism.

Get rid of all the regulations that govern companies like health and safety regulations, environmental regulations, competition regulations. Get rid of all the market distortions. A market distortion is something that artificially inflates or deflates the value of something, whether that be a product, service or labour. Like a minimum wage, import taxes or price caps. And have very low taxes, like a flat tax, 0% income tax or zero (or less than 15%) corporation tax and capital gains tax.

I think that free market capitalism doesn’t work because in order to have a functioning and healthy economy, you need to stimulate consumer spending, so that money is circulating around the economy, instead of getting stagnant just sitting there collecting dust, not doing anything.

Free market capitalists claim that we need lower taxes in order to reduce poverty by creating jobs, on the basis that when companies have lower taxes, that they will create new jobs, expand the company, as well as expanding into new product lines and industries that they previously did not participate in.

However nice, laudable, utopian and funkydory that sounds (although not hippie-dippie), in reality, that’ll not be what happens once they get their lower taxes. Instead all these companies will be putting all their expansion and investment inside speculative value instead of consumer value.

If I write a book, someone is working in customer support in some call centre or if someone is flipping burgers at mcdonalds, they’ve created some sort of consumer value for the customer. Or even better, labour value, value backed by someone’s labour from toiling and trudging at work.

All these companies will invest their money into speculative value like….

  • Cryptocurrency mining and trading
  • Fine art (eg. Andy Warhol, Vincent Van Gogh and Banksy)
  • Property speculators (eg. leaving a house empty for 10 years then selling it on to pocket the difference as profit)
  • Jewellery and other commodities (eg. diamonds, gold, oil shares)
  • Shares and forex
  • Arbritage (profiting from the disparity in currency exchange rates or any other exchange rate)
  • Dropshipping (buying in bulk from alibaba.com then selling it on ebay or etsy)

So that’s why I’m not a free market capitalist.

You can’t have a functioning and stable economy if the consumer spending market is dead, where no one is spending money to consume, it’s not circulating around, so money just sits in some millionaire’s bank account sitting stagnant, collecting dust. You also can’t have a functioning and stable economy if companies and capitalists are just making money from speculative value and not labour value. They’re just like crunching numbers on a computer and viola! Value has been created out of thin air, with ZERO labour output behind it, like Monopoly Money. Walk past “go” and collect $200

And it’s a bubble, a speculative bubble. It can’t keep going on forever. Eventually the bubble will grow so big that it’ll eventually burst then they’ll be another financial crisis and huge debts to be immediately repaid.

Simply Look Outside

I can’t comment on other countries but in the UK, the declining consumer spending market, is much worse than piracy, on the effects of declining music sales. In the UK, people just aren’t spending money. Restaurants are shutting down, not due to a poor product, being uncompetitive, too expensive or falling behind trends but instead because of the declining consumer market. The general public in the UK, just has less disposable income than before, less every year, so they aren’t spending the money to circulate the economy.

  • Restaurants closing down
  • Designer fashion and casual fashion shops closing down, so we’re just with those cheap fast fashion ones (C&A, Benetton and Gap saw the writing on the wall and started trading online only)
  • Music sales declining

The record label I’m signed to agreed with me, when I said that the declining consumer spending market, is a much bigger cause for killing music sales in this decade, than piracy ever was for the past 30 years.

That advert was back in 1999. Could you imagine them doing that nowadays? There being a bakery inside every supermarket, where you’ve got bakers baking fresh bread? And not just that, it’s baked throughout the day, not just at 5-9am in the morning. You’d never see that nowadays, as the consumer spending market is declining. People just have less disposable income, so they’re just making those consumerist purchases, to circulate around the economy and small companies.

Consumer spending in general took a hit in 2017, having its worst year since 2012, according to payments processor Visa.
It also said interest rate rises and Brexit concerns had “put a dent” consumer spending growth, as operators faced rising overheads such as the minimum wage and ingredient costs.

In the high street, we’re seeing a decline of designer fashion like Gap and Benetton, casual fashion like C&A and Dorothy Perkins, so we’ll only be left with the cheap “fast fashion” companies like Primark and TK Maxx, as far as the high street in the UK is concerned. Most of the designer and casual fashion shops, that existed in the high street back in the 1990s, they’ve gone and are now “online only”. They saw the writing on the wall, that the consumer spending market is declining.

Selling a product right now in music ( CD’s or vinyls) is becoming really hard because of production costs of the product and costs of postal services

In my opinion, as far as the UK is concerned, the declining consumer spending market is worse than piracy, for making the music industry lose money and album sales.

Now You Can See Why

So that’s why free market capitalism or those “tax is theft” types are idealistic and implausible. So no I’m not a free market capitalist and that’s why. Now apply the same logic to NFT’s and running startups.

I’m just not a fan of speculative value being prioritised and aspired for, at the expense of labour/producer value. There’s too many people nowadays trying to get rich by attempting to creative speculative value instead of the things that really produce something of value.

So that’s why I’m not a free market capitalist.

Supply Side Economics is a ponzi scheme

I think we need to look beyond the neoliberal and socialist dichotomy, to also think about supply side economics (monetarism) and demand side economics (keyensianism). Demand side economics says that the way to grow the economy is to increase people’s spending power in order to buy things, hence increasing the demand, like doing things like a minimum wage, rent caps and anti-monopoly laws. As always with economics, such things are best learnt by example, so here the series goes.

I’m not a “paycheck socialist” like Gordon Brown who would de-regulate the markets

There is more to socialism than increasing welfare and the minimum wage

tynamite

The diagrams above are misleading because the regulations about Public Service Broadcasting are NOT enforced any more, after de-regulation, due to blue Labour politicians like Gordon Brown Tory and Tory-lite politicians who believe in “the free market” since 2007 then 2010.

For example, none of the british tv channels produce children’s tv shows any more, as it doesn’t make much money (except for the BBC due to the tv license). The problem is, as you’re VERY restricted in what you can do with children’s tv shows, as America can naturally produce higher output than you within 1 year, it is VERY hard for the british to differentiate themselves for kids shows, like they can do with drama. They see it as producing dud wins, not colossal wins, so they stopped making kids shows.

Under the socialist regulations, ITV the broadcaster, not the singular tv channel, it was a consortium of multiple companies which all shared one tv channel, with each member company being assigned a regional area of which they operated in and produced new tv shows in, called an “itv region” Under the free market capitalism and de-regulation, the politicians allowed the “itv regions” to buy each other out, until nowadays there is only one regional company (after Granada brought Carlton). As you can imagine, that also encouraged them to reduce the quality and output frequency of their tv shows.

So ITV with MORE money, did the opposite of everything they said they were going to do! What does that remind me of? Hmm!

Further Reading

This article is part of a series
Supply Side Ponzi Stories