Why Capitalism is flawed
Posted on September 29, 2005
Filed Under News |
CBC News: Policy group says oil companies gouging
So the oil companies have been gouging us (err… you, since diesel prices are within the quoted range) with the price of fuel in the past month due to fear of shortages. No more evident than greater than $2/L last week before Rita hit. So what?
It is the oil corporations’ duty to shareholders to maximize profits. How is this done? By exploiting any and every opportunity to increase profits, say by gouging fuel consumers. That is capitalism working at its finest. Making as much money as possible is the goal, period.
Now many, especially in the US, have been misled to believe that capitalism is equivalent to freedom, democracy, and equality. Where as, communism is equivalent to state sponsored rape, pillage, human rights violations. Socialism is somewhere in between. Wrong!
The actions of governments are political actions, and not respective of the given country’s economic system. You cannot make those direct corrolations — not matter how much anit-communist propaganda you hear from the US since the 1950s. Some economic structures permits governments to do what they wish (”evil” or not) with somewhat more ease, but the past 4 years have shown that a country based on any economic system can do what they wish.
So next time you fill up your 5KM/L SUV - that you paid for with money you made from stock gains - with over priced gasoline, do not complain. Life is a balance… so are economic systems.
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3 Responses to “Why Capitalism is flawed”
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lol. I do believe in free markets. If you turn on the news you’ll see segments about high school students riding horses to school because hay is much cheaper than gas now. They choose not to participate in the free market, although it is arguable that many people have no such choice for fuel.
If someone is willing to pay 145.6 cents/L then that is their decision.
By the way, by using an alternative fuel then you are simply delaying the cost increase and convincing yourself your short term gains are beneficial. Energy in general is going to be much more expensive from heating your home this winter to running your laptop. The privilege to use such energy will likely soon start to seperate countries in our lifetime unless the laws of physics are bent.
Every thing is a market, including hay and horses. Not everyone can be in every market, I’d sure like to buy an airplane but… get it. People do have a choice for fuel, problem is most choose to buy low mileage gasoline vehicles. Now they are paying for their poor choice. While I get 1000km on 50L, and pay $0.20 less per litre.
The short term gains ARE benefitial… and they will be in the long term as well if the free market continues to operate as it is. Why? Because north americans cannot read the writing on the the wall. Why is it that 50% of european cars sold are diesels, but here (north america) they are Recall the demand curve, there is someone is willing to pay just about any price, the quantity of these someones increase as the price decreases. The selling price is the point where the supply and demand curves intersect. When faced with excess supply, one creates the illusion of limited supply (i.e. in Chatham where prices reached $2/L because someone started the rumour that there would be a shortage due to Rita — yes, shortages in Texas — Chatham is down the road from PetroCan, Imperial Oil, and Sunoco refineries, all less than 100km, no shortages there) Please tell which oil excutive would be foolish enough to transport gasoline from texas to Chatham… Exactly, a shortage in texas will have little impact in Ontario, because our fuel never came from there, and never will go there.
This illusion allows one to bump up prices because it is not supply that is being limited (supply curve isn’t shifting left, it is bumping the demand curve through to the right using FUD. The wizzardry of free market economics at work.
Which gets me back to my original point… the premise that the capitalist machine runs on is money for the sake of money, period. Nowhere in the equation is people, unless people will make you more money. I incourage you to read The Corporation: The Pathological Pursuit of Profit and Power, by Joel Bakan to become further informed of these concepts.
Is there not something wrong with that equation?
Sorry Mark, I don’t plan on buying this book. But I did read the reviews.
There was a brain fart in my original post. The people riding horses are participating in the free market, just not the petrol market any more. A lot of people feel traped because they paid $40,000+ for a vehicle which now is becoming too expensive for them to operate. Mind you it’s their own damn fault, but the resale value of those vehicles is declining even faster as the operating and maintenance costs are increasing. This isn’t just for new vehicles either, it could be for a 5 to 10 year old vehicle too where petrol prices were not a concern - like in Florida where a vehicle can last much longer than up here in the north (salt, potholes, etc).
The end result is people feel trapped in the petrol market. There is not much choice in North America which you mentioned - who else makes diesel powered vehicles other than VW? Natural Gas? There was even an article recently that Hybrids may not be as economical as regular vehicles under certain conditions.
As for diesel vs. petrol. They are tied together by the common denoninator of crude oil. There are alternative fuels for diesel vehicles which you have mentioned, but the long term solution to the energy crisis won’t be based on crude oil - maybe corn or straw - but I doubt it. Inprovements in energry usage are needed across the board, but most automakers are not concerned with that aspect, just horsepower and style.
If I understand correctly, you are saying the equation maximizes financial gain w/o respect to the values of people.
Each member of the economy can place their own price tag on their values of clean air, independance, convience, and other non-financial values - if only to bring them into perspective. Many mis-value such things and take them for granted to the advantage of corporations (in this case auto makers).
Is it the fault of the free market if people are greedy and stupid? No, that is a human flaw which will be around long after you and I.