The dangers of unfettered capitalism

Unfettered capitalism destroys the very structure of the societies it enriches and creates totalitarian movements

I’m writing in to respond to Mark Walker’s column ‘Emergencies erode freedoms’ because he conveniently skips over the source of the solvency crisis facing not only Cyprus but most industrialized countries including the U.S.A.

Imagine a common pasture that’s owned collectively by the residents of Penticton. Each resident has the right to place cattle to graze on this pasture. The community as whole has no claim on the milk the cows produce, that belongs to the individual who owns any given cow. The pasture, just like the forest, oil fields, ocean and atmosphere, is a collective resource from which individuals are allowed to extract private profit, that’s what’s known as a commons. Now certain rules govern the use of the commons, like how much cattle each resident is allowed to place out to pasture.

Now let’s pretend there are no rules. Let’s deregulate. Let’s say that an individual buys additional cows but the pasture can only support so many cows before it suffers damage. It has a fixed carrying capacity, which means it can only support so many cows before it begins to degrade the common resource and lower its future carrying capacity. The individual with the additional cows receives all the benefit of the additional milk his new cows provide right away. The costs of this action, the damage, are shared collectively by the community. Under our economic system the individual with additional cows is pursuing their own economic interest in a rational manner. Seeing this, other individuals in the community have a choice. They can bear the costs of the degradation of the pasture and gain nothing in return or they can buy more cows of their own. In which case they also get more milk, but the pasture degrades even faster. Under our economic system, the latter choice is the correct one because each individual maximizes their own economic interest. The result is a pasture that instead of feeding a fixed number of cattle indefinitely has degraded and collapsed. The rational pursuit of individual economic advantage results in the impoverishment of everyone. It’s what’s known as a tragedy of an unmanaged commons. This is how our economic system works.

From 1933 to 1999 the U.S. banking system acted like a managed commons. But in 1999 the Glass-Steagall Act was repealed. This act was a piece of legislation that effectively separated consumer and investment banking. Financial institutions had to choose one or another. It was put in place because leading up to the great crash of 1929 the banking sector engaged in the same type of shady activities that led up to the great crash of 2008. By pursuing their own economic interest, a handful of banks, hedge funds, corporations and investors degraded the economic commons in 2008.

Just look at the numbers. Look at how many people lost their jobs, houses and life savings in 2008-2009 due to the recession compared to how many CEOs, hedge funds and corporations profited from the credit crisis. The rational pursuit of individual economic advantage results in the impoverishment of everyone. The repealing of the Glass-Steagall Act was a deregulation of the economic commons and was the source of the great recession of 2008.

The early 20th century totalitarian movements like fascism and communism were a direct result of economic conditions. Economic conditions that undermined the traditional forms of community and family that once served as social safety nets. When you rob people of their security they look for it elsewhere. Like the security found in being part of a mass movement. This is the reason why FDR created the welfare state: A social safety net to catch those people; to allow for a sense of security; to save capitalism from itself. That’s the paradox free-market Ayn Rand-acolytes like Mark Walker can’t fathom. That unfettered capitalism destroys the very structure of the societies it enriches and creates totalitarian movements. Capitalism and communism; hyper individualism and hyper collectivism; the ying and the yang.

Cody Young



Just Posted

Geordie Fife exits the dunk tank during 2017’s Discovery House Father’s Day festivities at Skaha Lake Park. The fundraiser helps raise awareness of the work done at the house and break down the stigma associated with addiction. (Western News File)
Discovery House Father’s Day fundraiser goes digital

The addiction recovery program will be rolling out videos ahead of the fundraiser

The proposed design of the five-storey building on Front Street. (City of Penticton)
Five-storey building proposed for Penticton’s Front Street

It will be the second time the proposal will head to council

“65 years, I’ve carried the stories in my mind and live it every day,” says Jack Kruger. (Athena Bonneau)
‘Maybe this time they will listen’: Survivor shares stories from St. Eugene’s residential school

Jack Kruger, living in Syilx territory, wasn’t surprised by news of 215 children’s remains found on the grounds of the former Kamloops Indian Residential School

RCMP thanked the public for assistance in finding Benjamin Archie, last seen in Princeton. (RCMP)
Missing Chilliwack man found safe and sound

The 80-year-old had walked away from his home in Chilliwack

57-year-old Kathleen Richardson was discovered deceased in her home Wednesday, June 9, 2021. Her death is considered a homicide and connected to the slain brothers found on a Naramata forest road. (Submitted)
Naramata community in shock as condolences pour in for homicide victim Kathy Richardson

Richardson was well liked in the community, a volunteer firefighter with a home-based salon

At an outdoor drive-in convocation ceremony, Mount Royal University bestows an honorary Doctor of Laws on Blackfoot Elder and residential school survivor Clarence Wolfleg in Calgary on Tuesday, June 8, 2021. THE CANADIAN PRESS/Jeff McIntosh
‘You didn’t get the best of me’: Residential school survivor gets honorary doctorate

Clarence Wolfleg receives honorary doctorate from Mount Royal University, the highest honour the school gives out

Two-year-old Ivy McLeod laughs while playing with Lucky the puppy outside their Chilliwack home on Thursday, June 10, 2021. (Jenna Hauck/ Chilliwack Progress)
VIDEO: B.C. family finds ‘perfect’ puppy with limb difference for 2-year-old Ivy

Ivy has special bond with Lucky the puppy who was also born with limb difference

A million-dollar ticket was sold to an individual in Vernon from the Lotto Max draw Friday, June 11, 2021. (Photo courtesy of BCLC)
Lottery ticket worth $1 million sold in Vernon

One lucky individual holds one of 20 tickets worth $1 million from Friday’s Lotto Max draw

A logging truck carries its load down the Elaho Valley near in Squamish, B.C. in this file photo. THE CANADIAN PRESS/Chuck Stoody
Squamish Nation calls for old-growth logging moratorium in its territory

The nation says 44% of old-growth forests in its 6,900-square kilometre territory are protected while the rest remain at risk

Flowers and cards are left at a makeshift memorial at a monument outside the former Kamloops Indian Residential School to honour the 215 children whose remains are believed to have been discovered buried near the city in Kamloops, B.C., on Monday, May 31, 2021. THE CANADIAN PRESS/Darryl Dyck
‘Pick a Sunday:’ Indigenous leaders ask Catholics to stay home, push for apology

Indigenous leaders are calling on Catholics to stand in solidarity with residential school survivors by not attending church services

(Heather Lueck image)
Crash north of Enderby knocks out power, slows Highway 97A traffic

A witness captured footage of a medical helicopter landing at the scene

The RCMP presence in Central Okanagan public schools is being reviewed by the board of education. (File photo)
RCMP presence welcomed in Central Okanagan public schools

Staff survey feedback overwhelmingly positive from students, staff and parents

Most Read