Too many people believe that FREE MARKET ECONOMY and CAPITALISM are one and the same thing, as opposed by COMMUNISM.
Communism is nothing more than a philosophy originating from a study of the poor living conditions of workers during the industrial revolution.
Capitalism is nothing more than a monetary system originating from the use of gold and later deposit slips for gold as a means of exchange.
But Free Market Economy is a wisegolfers natural way of bringing offer and demand in balance that already existed in the time of barter trade.
Capitalism exploits labour to create added value. Or so Karl Marx said.
But let’s face it. The only real existing value in this world is LABOUR! Nothing can be achieved without it. No raw materials can be extracted from the earth without labour. No food can be produced. No added value can be created. No profits can be achieved. Nothing! On the other hand. CAPITAL has no real value at all. You can’t eat it. In Mugabe’s Zimbabwe, they burn CAPITAL (paper money) because it is cheaper than firewood!
Contrary to popular believe: Money is TIME! When you earn money, you have given your time in producing something. In rendering a service of some kind. In trading something. Or whatever and received money for that! This money allows you to buy TIME from somebody else. You can buy a product that someone created with his time. A service. You name it. It is always TIME that you buy!
Part of the time that you can buy for your money has already been transferred into products. A car waiting to be sold. Food in the supermarket. Tools of some kind. A house. But services still to be rendered and products not yet created are still in their basic form of available TIME! So when unemployment is skyrocketing we should be so happy! There is so much TIME available! What richness! What wealth for a nation! But are we happy with high unemployment?
TIME when it is not consumed loses it’s value. At a rate of 100 % per day. We are used to transfer the time that we are owed into CAPITAL in order to be able to transfer it back into TIME when we want to buy something or invest it. CAPITAL keeps, but TIME doesn’t!
In order to persuade someone to invest his capital he wants interest or profit of 4 % or more or he hangs on to his capital. In order to persuade someone to invest his time in a period of unemployment you can give that person less than what he needs to survive and he will still sell you his time. Something is better than nothing!
And that is how capitalism is able to exploit labour to create added value. By transferring time owed into CAPITAL and only buying time back when it can make a profit, allowing TIME or LABOUR to be completely lost when it is thought that no added value can be created with it. High unemployment, poverty and crises are the flaws of CAPITALISM. Not of the FREE MARKET! Without transferring the time that we are owed into CAPITAL and having to consume that time without too much delay we would still have a FREE MARKET ECONOMY, but we would not have CAPITALISM!
So how can we have a Free Market Economy without the flaws of Capitalism?
Barter trade? Of course not! We live in the 3rd millennium! Even though we still use a money system from the 1st or 2nd millennium! If CAPITAL or MONEY is to be a means of exchange for TIME, then it should have the same property as TIME! Meaning: it should lose value when it is not consumed within a certain period, just as TIME does! But how to achieve that?
Nothing is easier. Let’s look at one possibility: Substitute V(alue) A(dded) T(ax), which is a punishment for transferring labour into added value, by V(alue) D(iminished) T(ax) on money in possession as long as it is not used. A negative interest Tax on money. For that we would have to change cash money into digital money in our bank account. But hey! We pay with pin, credit card, chip, cheque, internet, mobile phone.
We are in the 3rd millennium! Substituting VAT by VDT will certainly make us all a lot richer. As TIME or LABOUR is the only real value that exists we cannot accept a monetary system like CAPITALISM that allows it to go to waste.