The Free Enterprise System vs. Capitalism

It’s a common mistake in the media to equate Capitalism with the Free Enterprise System, implying they are one and the same. But it’s a fallacy promulgated by those who control capital as it serves their agenda; it provides the sheep’s clothing for blending into society making it more acceptable. In simple terms capitalism is about the bottom line of making a profit, it makes no difference if it makes a profit building prisons or schools.

Capitalism is nothing more than a capital accumulation scheme, and more often then not it acts as a cancer on the Free Enterprise System and the values that it nurtures.   Capitalism, particularly the cartel Capitalism that presently exists, seeks to mitigate, or even eliminate the values that sustains and nurtures the free enterprise system, as those values do not contribute to the bottom line of making a profit. 

Capitalism is myopic, focusing on the bottom line of making a profit; it makes no difference if it makes a profit on manufactured needs or on real needs.  It is indifferent to the needs essential to our individual wellbeing and the wellbeing of the global environment which sustains us; yet, it is our wellbeing that is at the heart of our pursuit of happiness.

Capitalism, as it is presently practiced, is not sustainable, not just due to the pyramid scheme nature of the practice, but also environmentally as it externalizes many of its cost to the environment and to society at large in order to achieve its short term profits. Capital seeks “efficiencies” and will externalize processes that pollute the environment, while it also reduces the cost of labor either through improvements in technology, or by outsourcing. 

Capital is hailed as a great savior, but capital has no conscience; cartel capitalism capitalizes on our fears, doubts, desires and superstitions.  Capital will chase capital and will continue to increase wealth even as the economy as a whole stagnates, pooling in ever larger reservoirs.

The holders of these vast pools of capital, in symbiosis with government, provides the power to promote capital’s own vested interests; whether it is in banking, real estate, military procurement, “national security”, medicine, oil, transportation or high tech, you name it.  Indeed this power and authority to control is furnished by government through a plethora of means such as limiting their liability by law, providing subsidies, guaranties, bailouts, government contracts, loans, price controls and on and on. 

For Capitalism to flourish with its corporate structure requires the authority to control, with a perverse allegiance and vigilance to its bidding.  Those who control capital control the Capitols of the world; money interest skews the political process.  It’s no longer a democracy of one-person one vote; the almighty dollar is the measure of the vote. When capitalism is given full reign, we no longer have a government of, by and for the people; democracy is allowed to languish and by default the holders of capital become the masters! 

Capitalism is equally at home in a fascist system or in a totalitarian regime, as in so called democratic republics, as governments, in all cases, protect and defend it from the people.  This assertion is echoed in a recent article by foreignpolicy.com, “In China, Russia, and the sheikhdoms of the Persian Gulf, state-led brands of capitalism are holding their own.”   Indeed the power and authority for capital to control the economy is furnished by governments through a plethora of means such as limiting liability by law, providing subsidies, guaranties, bailouts, government contracts, loans, price controls and on and on. 

In contrast to “Capitalism”, the free enterprise system is about finding needs and filling them; fulfilling useful and beneficial needs of society; profit is only one of the myriad rewards or values accrued towards this end.  The perceived inefficiencies in the Free Enterprise System support the human needs and values of the community; it is less efficient than capitalism as profits are often forsaken to fulfill these other values. 

Among the countless values that motivate people to engage in “free enterprise” activities is self-direction, independence, a sense of accomplishment, the freedom to work for oneself, an economic activity which employs the whole family, as well as a desire to simply serve the community; to provide for community needs and to accomplish this in a sustainable manner.  For entrepreneurs engaged in free enterprises ventures, profits are often sacrificed to meet these diverse values and ends.  The Free Enterprise System at its core is about self actualizing, expressing oneself, being fulfilled while at the same time fulfilling the needs of others.

The Free Enterprise System, when it’s vigorous and vital, is the bulwark of a vibrant democratic meritocracy; it provides the structure of freedom where the actions of a free people can flourish.  When capital concentrates in the hands of the few, democracy suffers; it misappropriates the invisible hand of the Free Enterprise System and converts it into slight of hand of politics and government.  Free markets do not breed a free people, free enterprise does! The present “free market” is about promoting corporate interest around the world to manipulate resources.  Free enterprise represents individual efforts to solve problems; find a need and fill it!

The free enterprise system is the invisible hand expressed by Adam Smith, although he expressed it as a free market of a multitude of small producers primarily producing for their local communities.  Capital with its seductive power distorts this concept of “free markets” to mean the freedom of capital to go wherever it wishes to be directed and have power over the market. 

This is accomplished by multi-national corporations that have allegiance only to the holders of capital with no allegiance to any sovereign state, whether expressed as being communist or capitalist.  It is simply greed that motivates the holders of capital, not the self interest of the myriad members of society as they interact in personal commercial pursuits.

Instead of citizens participating in a democracy enhanced by the Free Enterprise System, we have been reduced to consumers and laborers in a capital driven scheme that dominates and subjugates the market.  Until we reinvigorate the Free Enterprise System and democratize capital, we the citizens will continue to be at the mercy of capital’s interest.   Changing the metrics of capitalism is the challenge ahead; it must evolve into a new form that is equitable and inclusive and provides value to all of society, only then will democracy have a chance to flourish.