Capitalism is a Pyramid Scheme
Understanding Our Economic System
What is capitalism?
Capitalism is a pyramid scheme.
You've doubtlessly heard of pyramid schemes before. Pyramid schemes are illegal. A type of fraud where new investors are brought in and the money they bring is paid to investors higher up in the period. Bernie Madoff is one of the most famous examples. He made off with billions.
Multilevel marketing schemes are a legal version of the same idea. In a multilevel marketing scheme, the people down at the bottom of the pyramid do all the work while the lucky few at the top of the organization collect the lion's share of the money for themselves. The rich DeVos family who run Amway are just one example.
Well, that’s essentially how capitalism works!
Some people get confused. They think capitalism is commerce, the use of money to exchange goods. They believe that handing someone a few coins instead of bartering is capitalism! It's not. They had coins way before capitalism existed. Have you ever seen a Roman coin? Emperor on the front? Ancient Rome didn't have capitalism. Ancient China? They had coins too. But no capitalism.Â
Capitalism didn't start developing until the 16th century. Before that was feudalism. You’ve heard of that. Europe from the fall of Rome to the Enlightenment was predominantly feudal. It was an arrangement where a feudal lord siphoned up as much wealth as he could from the hard work of all the serfs living on "his" land. Not capitalism.
Capitalism is a modern phenomenon. It's only been around for a few hundred years. Capitalism is an economic system designed to concentrate capital. That’s why it’s called capitalism. Capital. Money accrues to the private owners of the means of production. Ownership. Property rights. The people who own things use their money to make more money. When money brings in more money, that is the concentration of wealth. Think about concentrated orange juice. Take a lot of something and make it fit into a smaller space. Instead of money going into a lot of hands, it goes into fewer hands. And those fewer hands get bigger and bigger piles of money. Concentration of wealth. Concentration of capital. Fewer and fewer hands. Bill Gates. Elon Musk. Jeff Bezos. Warren Buffett. Fewer hands, bigger piles of wealth.
Like the serfs and slaves, modern wage workers get the short end of the bargain. We do all the work while someone else gets all the money. This is why our grandparents and great-grandparents called workers who sell their labor wage slaves. Writer David Graeber said that if someone like Aristotle were magically transported to the present day, he wouldn't see much difference between workers selling their labor and slaves. He says Aristotle would probably just think we're all slaves. Something to think about.
It was slaves who made the pyramids. And just like in a pyramid scheme, in capitalism, money travels up. The people at the bottom, like us, do all the work. The people at the top get all the rewards. We make all the things and do all the things that bring in the money that goes up through the pyramid to the CEO and the shareholders. Wealth and capital concentration… that’s capitalism. Like a pyramid. That's why capitalism itself is a pyramid scheme.
Let’s make them pay.