Capital is the fuel for the engine of the economy. But what happens when the only goal of the capital is piling up the capital at one place?
Posted: Apr 2014
Wealth of banks and corporations grows. Global wealth does not really grow. So, what is the catch? Where the wealth is going to?
The whole situation is very absurd. Development of technology, information flow and automation increased productivity in every industry to the level that was difficult imagine a century ago. Since productivity and automation is improving efficiency it is logical to expect that working time should be decreased, while workers could have more free time for entertainment, travel or education. Based on this entertainment industry have a great future. But reality is bringing something that more looks like 19h century.
During the 19th century the workers were exploited to the maximum limits. Working time was 12-16 hours. Worker's wages were low. Labor rights didn't exist. Workers couldn't count on social welfare and pension. That situation could be understood by low level of technology development that required many hours of manual work. Also, the capital concentration was still in emerging phase, at least compared to today's standards.
But now, with the technology of 21st century and financial models that we see today, we are again returning to 19th century. All benefits of growth from previous decades were harvested by investors. Workers do not earn more. The difference between average worker salary and average CEO's salary grew exponentially. Investor's profits grew even more. Technology didn't allow people to work less and to have more time for free activities.
Instead, workers are consolidating into two major groups. One group is working more and more, with less and less free time. The other group is unemployed, with small chance for employment, being smaller every day. What is the cause of that? Developing technology that makes workers redundant? Capitalists that exploring every opportunity to increase profit? Or both?
Obviously, wealth is distributed by principle – someone get's more, some get's less. Profit accumulation is obviously the main motive. This motive is justification for every action of capital, regardless of consequences. First victim of brute capitalist approach is work time and respect of work-life balance. The second casualty become worker himself, becoming the member of unemployed army.
But imagine soda drink company that manages to replace all workers with robots. Imagine car manufacturing company that succeeds to replace workers with robots. Imagine ... Imagine who will be buying soda drink and cars at the end. Robots?