Firstly, to start this discussion we must differentiate between Capitalism and Free Markets. Investopedia.com differentiates the two concepts as:
“Capitalism is focused on the creation of wealth and ownership of capital and factors of production, whereas a free market system is focused on the exchange of wealth, or goods and services. A free market system is based solely on supply and demand and leads to free competition in the economy, without any intervention from outside forces. On the other hand, a private owner in a capitalist system can have a monopoly on the market and prevent free competition.”
Now, this capitalist system is based on theories of traditional economics such as utility theory, self-interest, rational economic man, people responding to incentives, opportunity cost etc. I won’t be an economist worth my self-proclaimed title if I didn’t endorse free markets and Adam Smith’s “invisible hand” however, because of the ownership structure in capitalism, there are incentives inherent in the system that handsomely rewards controlling the factors of production, of which, labour is a key factor.
But wait, some of you are saying that households control the factors of production not a limited few; if that were the case would we have so many issues in the jobs market- from debates about minimum wage, to unemployment and underemployment. The truth of the matter is that the system is designed to keep you indebted such that the current and future labour you control has already been spent. Thus, majority of the world’s population is stuck in thankless jobs, living from pay check to pay check until retirement. At least they send their children to schools and universities, so the cycle can repeat…huh!
I mean just look at the key driver of the world’s largest economy (America), which is consumption- Aggregate demand. It fuels “productivity.” So we have endless credit card debt, mortgages and houses packed with all nine versions of the iPhone, when before the mark of a good product was that it lasted for 5 years.
(please note, I use to be a banker and still am an investment professional. There is nothing wrong with leverage provided it is used correctly.)
However, there is nothing inherently wrong with slavery. It is an economic system.
The problem is that it always allows for the exploitation of slaves.
A friend of mine shared this on my Young & Catholic group’s WhatsApp:
“The Church did not condemn slavery in theory or outrightly because it was a viable economic system just like today’s capitalism. In the same way she did not condemn monarchy as it was a viable political system just like democracy today. But she has always condemned the practical abuses of slavery as much as of capitalism. It is natural for one man (the slave) to belong entirely to another (the master) if we understand that the master is in turn completely responsible for the slave…Similarly children belong entirely to their parents and their parents are entirely responsible for them and when abuses are absent, the arrangement is perfect!”
So what is my message, what is my call to action? Am I asking you to fight tooth and nail to get into the world’s 1% that controls ~80% of the world’s capital? Unfortunately, No. This whole topic started because my friend was having a conversation with someone who was like why didn’t Jesus abolish slavery…my response to this is:
“If Warren Buffet came to your house to explain to you how to be an intelligent investor like him and was willing to serve as your guarantor…will you be complaining to him that the ‘akara’ and ‘custard’ you made for breakfast is now cold because you answered the door. Dude, priorities”
– God bless