Questions often come to mind as to why we have such inequality in our economic system. Insights about this can be found when we analyze how things changed after the end of the barter system. I know we could not go back to bartering at this point in our economy. We are way beyond that possibility. But if you look at the creation of money and capital, you can see why unregulated laissez faire capitalism became so inequitable. The reason is found in the nature of money itself. Dollars can be held in infinite amounts whereas doing so with actual goods would be impossible. With uncontrolled capitalism, money can be accumulated and possessed in sums that can never be spent on consumable goods by the holder, not even with the most conspicuous of spending. Thus, the capitalist can retain huge sums of money without spending it. The money merely accumulates and leads to the acquisition of more and more money in the capitalist's account.
On the other hand, look at how the barter system worked. If John had ten cows for milk, he had to feed ten cows. If he didn't use all of the milk from the cows, it would spoil and become worthless. So if he could not consume all of the milk and didn't need all of the cows, it would make sense to trade them for something else that he could use. For example, it would make sense to trade them for hay to feed the cows that he needed to keep for the milk that he could consume. The fact that the cows were a drain on him made them less valuable and encouraged him to reduce his herd. Similarly, if someone else had 1000 bales of hay but no cows, he'd have to store the hay somewhere. He'd have to protect it from rain so he'd need a building. If he didn't use it up, it would eventually rot. So he'd have an incentive to trade the hay for something that he did need, like cows for milk. So by trading cows for hay and hay for cows, both parties would have what each could actually use and consume. Not so with money. Money changed all that.
With money, an individual would not have to worry about using his resources. Money doesn't mold, get old or die. It doesn't care how it was acquired, who has it or how it is used. It's completely fungible so it can be held and used later for anything. So holding onto and continuing to acquire money in amounts far beyond what can be reasonably spent in a lifetime has no down side. At least, not for the capitalist who was able to acquire money. His greed and his appetite for money can become insatiable. He can accumulate billions of dollars that he can never consume and suffer no downside for doing so. Instead, he tends to gain more money from the accumulation of interest paid on his original capital.
Using a capitalistic system and encouraging a race to acquire money would not be problematic if everyone was placed in the same position at the starting gate. Unfortunately, that's not the case. To make things worse, this lack of equal opportunity is a blatant fact that most middle class conservatives fail to understand. Those individuals like the idea of laissez faire capitalism because they don't appreciate how disadvantaged they are in comparison to the wealthy. They don't seem to recognize the many variables in our society that make starting out much more advantageous for those who already have capital. They are played against the poor because members of the middle class like to think that they can easily become capitalists themselves by hard work and that poorer people are there only by choice. Of course, to no surprise, the elite rich perpetuate that myth at every turn of the capitalistic game.
It is indisputable that some individuals, the most fortunate, are born into wealthy homes. They start with access to excellent health care, better quality of food, expensive clothing, superior grade and high schools and access to the best universities. Once they graduate, their parents can subsidize any income that they generate and can enable them to complete graduate school, hold out for the best jobs and start a business with plenty of start up capital. When their parents die, they stand to inherit large sums of capital, thus they are in a much better position to take entrepreneurial risks throughout their income-generating years. Those born into middle class homes have some benefits but not nearly those of the rich. They may have parents who work hard to enable them to get adequate health care, food, clothing and education. However, they don't have the same access to start up capital. They don't have the same opportunities to go to the best universities. And they cannot afford to take the kind of entrepreneurial risks that the offspring of the wealthy can take. Of course, at the bottom of the opportunity scale, the children of the poor struggle along.
The middle class are encouraged, by the conservative propaganda machines, to conclude that these impoverished families often have too many children and the adults don't make good choices in their lives. Accordingly, since the parents made their bed, they should lie in it. That's true in many cases. But we are now talking about the children having an equal chance at the starting gate, not the adults. The children did not make the bad choices. They start way behind the rich and the middle class at the starting gate through no fault of their own. They may suffer from malnutrition, which will impact upon their ultimate health and perhaps their intelligence. Facing more health challenges, they will be in the worst position to deal with them since they traditionally have had poor, if any, health care. Since school quality is often related to the tax base for housing, and since they will be living in less expensive housing, their schools are often inferior to both the rich and the middle class. On the up side, they may qualify for some benefits that the middle class cannot get. Which is, of course, how the wealthy classes are again able to play the middle against the poorer classes again.
When advocates of pure uncontrolled capitalism talk about the invisible hand of the market, perhaps they need to weigh in the factors that the market incorporates. The inequality of opportunity under our present capitalistic system is blatant. The invisible hand may be invisible but it certainly nudges the rich along in the race and gives them the opportunity to perpetuate what we have: A system of entrenchment of wealth. We entrench accumulation of wealth, which can never be consumed in ones lifetime. That wealth is then passed on to make a new generation of the economically favored.
So that age old question persists: Is money the root of all evil? I would say that now it is, but it does not have to be. And we need not return to the barter system to do it. Merely formulating a modified capitalistic system that allows everyone equal access to the same place at the front of the line at birth, the starting gate of capitalistic life, could take the evilness out of money. It wouldn't be that difficult. It just takes a sense of fairness and altruism which, unfortunately, is in short supply with most capitalists these days.
Priscilla Herochik, R.N.J.D. is author of The Final War and 3001, Birth of a Political Renaissance. Visit her website at http://thefinalwarand3001.com for more information about this author.
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