Many think that Capitalism has been corrupted, socialised. It hasn’t – it’s been purified.
We used to have capitalists that produced things; they weren’t the worker’s friend, but they did actually serve a purpose, setting up factories, providing the machinery for workers to use. But now we have a new class of capitalist that doesn’t do anything but accentuate boom and bust, making money on the way. People like John Key, Michael Fay and Graham Hart. They buy and sell, strip assets and bet against the common good. But they don’t create anything, their wealth is ultimately derived from the work we do.
Currently these speculators are subsidised by the rest of us. In New Zealand, with no capital gains tax, they pay no tax at all on their core business activity – speculating. Productive industry subsidises them with 28% of their profits; the workers with up to 33% of their incomes, and 15% of everything they buy.
What’s so valuable about what they do that means they should be able to avoid tax entirely? They create housing bubbles, a problematic exchange rate and the Credit Crunch. For that they get to be some of the richest in the land and pay nothing in tax towards their health & education, or that of the employees their businesses benefit from.
They aren’t some monolithic class to overthrow however. Less than 2%* of the population are true capitalists – those who live off the work of others. Some of those capitalists are, like Bill Gates, productive capitalists, but more and more are pure speculators. About 85% of us are ‘wage slaves’ – who fund most of our lives through wages, salaries or as ‘independent contractors’. The rest, a diminishing amount as capitalism becomes more pure, work for themselves as farmers or small business owners.
As we live in a democracy, that means we, the workers, get to set the rules. We just need to see that taxing these people and restricting their activities won’t just not harm our society and economy – it will improve it. I’m sure we can do much more to restructure our society to do without this class of speculators, who impoverish the rest of us both monetarily and socially; but at the very least we need a Capital Gains Tax so they pay something towards society, and a Tobin Tax to limit the damage of their dangerous activities.
* In each of the anglo-saxon countries 1% of society owns approximately 1/3 of the wealth. In Britain 169 individuals own 10% of the economy, whilst the poorest 50% own 1%. Elsewhere in anglo-saxon land it’s similar, although Australia with its compulsory super saving has the bottom 50% owning 6%, significantly better than the rest. In non-anglo saxon countries the financial sector of the economy is much smaller, and wealth is distributed much more evenly. (From: Economics For Everyone)