Sunday, June 28, 2009

Two sides of Capitalism

There are two side on which Capitalism can collapse. One is if the Capitalist, does not want to spend his capital, because he cannot think of any productive use. This leads to recessions. Here, capitalists hoard on to cash, instead of spending it. This reduces the velocity of money leading to unemployment.

On the other hand, if the worker, does not want to work to the capital of the Capitalist. This leads to inflationary environment. This increases the velocity of money, leading to full employment but high inflation.

It is this balance, between the worker and the capitalist, that has to be managed to run the economy. However, we have seen for a lot of time, the imbalances from the side of capitalists. However, great imbalances have never been seen from the side of the worker.

Things are changing now, because everybody has started to feel rich. The problem is, if a worker thinks, he is rich enough to sustain his daily living, he will stop working. The worker, is never greedy like the Capitalist.

With more money, the greed of capitalist goes even higher. But with more money, the complacency of the worker goes higher, and the amount of work goes lower. A feeling of contentment and self-satisfaction is coming to the workers in these prosperous period. Lot of them, do not want to work anymore. Remember that, it is not gold/silver or currency that have any value, the valued thing is the hard-work of men you can buy with these currency. When these men do not want to do the hard-work, the money is worthless. Money goes from everything to nothing, when these workers are content.

If we cannot take the feeling of contentment, out from the workers, the capitalist system could collapse. The natural progress of opulence, is hindering with the nature of the worker. We will soon see, what nature wants.