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Issues with Extreme Capitalism

by Kevin Tennert about a year ago in finance
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The rise of Plutocracy

The rise of the Western world occurred due to capitalism. In fact, the notion of businesses, companies, and large corporation uses this customary bread and butter design of capitalism to make money, contribute to the economy and employ workers, skilled or unskilled. Because of this, the Western world rose in the Industrial Revolution and continued to rise amid corporatism and consumerism in the 20th Century and beyond. Due to developments and changes, capitalism has in many cases got out of control and became extreme in its measures to make profits. How did this happen? Let us look at its history.

A healthy dose of capitalism is to make money quarterly, bi-annually, and annually while guaranteeing the rights, security, and safety of its workforce. Essentially, a moderate form does this well since many long-term workers stay with the business throughout their careers, earn money to buy a home, raise a family, and live the dream they have always wanted. This is the typical duration of the regular Western citizen and it has been untested for decades until the rise of mega corporations and big business.

The first case of extreme capitalism occurred during the great railroad boom of the 19th century. Countries needed railroad lines to transport goods, passengers and military personnel and equipment (in some cases) to predetermined destinations. By doing this, the federal economy grows, businesses enlarge, more people work and get around. Railroad barons (Jay Gould, Cornelius Vanderbilt, Collis Huntington, Leland Stanford etc) and major industrialists such as Henry Clay Frick, John Rockefeller and Andrew Carnegie laid the foundation of the first major industries in the United States of America. The country needed their ingenuity, technological advancements, and know-how to push the country into the future and be competitive with others internationally. Furthermore, tens of thousands of Americans were employed with this companies, so many people relied on them for making a living. The aforementioned industrialists knew this well and drove their agendas forward for their businesses and themselves. Working conditions weren't the best and so was the pay. Poor treatment and exploitation rounded it off. During this time, we see the rise of the first labor unions to fight for the common worker (The Knights of Labor and later the American Federation of Labor led by Samuel Gompers). At this time too, political parties that favored more acceptable conditions for workers at major industries popped up to challenge the great industrial might of unhinged greed and power. President Theodore Roosevelt at the turn of the 20th century also did not appreciate the lawlessness and rising power of such companies on home soil, so his fight against them (trusts) bestowed upon him the famous nickname Trust Buster. Under his leadership, railroad trusts were cut and its power was spread out. President Franklin Roosevelt with his New Deal policy during the Great Depression helped labor unions especially. The Wagner Act is a good example of this as it gave labor unions the legal right to organize.

The first massive case of unparalleled consumerism occurred in the 1920s, leading up to the 1929 stock market crash in New York City. Of course, there were warning signs such as the Recessions of 1873 and 1893 respectively, but the economic bubble grew so rapidly after the First World War with real estate purchases in Florida until a great hurricane wiped it out around 1925 that the majority of the population wanted a part of it. In other parts of the country and the world, excess consumerism in major metropolitan areas enlarged the bubble until it finally burst in 1929. The people of the world experienced the grave consequences of consumerism firsthand for the first time and had to deal with the fallout throughout the 1930s.

The Second World War officially ended the plight and in the decades after (50s and 60s) the United States and the Western world experienced untold economic boom never seen before. Companies grew again, more people could afford more, and there was plenty to go around if you were willing to work for it. By the 1980s and 1990s, the stock market became so influential, hedge fund managers, traders and stockholders dominated the bulletins. They amassed so much wealth with their business that they became dominating figures of monetary power and affluence. Shady dealings, corruption, bribery and fraud exploded to new heights. It was, and still is, a toxic environment that could make or break you. Consumerism had reared its ugly head again, and it overtook financial centers all over the world, especially in the financial district of Lower Manhattan.

The rise of gargantuan companies such as Wal-Mart, Fed-Ex, Boeing, Target, big automakers and tech giants like IBM, Apple, Google, Facebook and so on opened a new chapter in formidable power and prestige of wealth at a whole new scale never seen before. In fact, some of these big conglomerates can overtake the annual GDP of certain countries and do more! Apple, for example, became the first One Trillion dollar business in the world. Tech Giants uses fiber optics, internet networks, smart technology and computers uses handsome contracts from countries to extend their reach to our daily lives so easily and unchallenged. Wal-Mart has attacked small traditional Mom and Pop stores who cannot compete with Wal-Mart's ultra low prices and inventory. Many of them disappeared, rendering downtown centers of small communities vacant. Massive retailers have encouraged townspeople to move to large urban centers to take advantage of consumerism. This move are turning rural communities into ghost towns, it is a phenomena that has been happening since the 1960s. If you would go to a small town now, you will see what I mean, especially in rural America.

These business have exploded in size because we need them. We can't live without them at all. We use their services every single day because it is so damn convenient. Many of these companies don't even pay their fair share in taxes, big retailers have moved production lines to countries with ultra low safety and pay standards so they could make more money. Countless workers have lost their jobs due to outsourcing because it is too expensive to employ people in Western countries with labor unions, government restrictions and standards watching them every day. They flourish when governments look the other way (low or no taxes, no standards of any kind). Many workers in developing nations have lost their lives due to lackluster safety regulations and exploitation. Buildings have collapsed, fires have started, accidents occur, and terrible working conditions have made workers very sick. This has been the norm for many decades and it won't end because massive corporations have so much power. They can almost do whatever they want. They decide where to go, how many they want to employ, and how much money they are willing to spend. That is how it is.

Greed is the toxin that destroys the human soul. Business ethics is a well-known oxymoron that does resonate with many. That's because many businesses have no ethics when it comes to making billions of dollars annually. This has been building up since the dawn of the Industrial Revolution. People want to be rich and have lots of power. They dream about it all the time. It is human nature that fuels their resolve. Fortunately, not every billionaire is greedy and corrupt (Warren Buffett is likely the best example of this) but the majority of them are. In the end, you will see the true character of a person once you give him/her power.

finance

About the author

Kevin Tennert

I think expressing yourself in fundamental and categorical topics help create a more transparent, concise, and educational environment. For me, I like to explain key issues that dominate current events in society and encourage dialogue.

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