Capitalism is, allegedly, the dominant economic model in the world. Allegedly, because there are no true ''capitalist'' societies, and usually the case is of oligarchies and insider's capitalism. In capitalist societies, 4 structural flaws can be pointed out: the flaw of full employment, the flaw of regulation, the flaw of trust, and the flaw of centralization. The meaning of a “structural flaw” is such that it doesn’t characterize a specific country, but they exist in every capitalist state, in one form or another.
A state of full employment is not such of 0% unemployment rate. In fact, it is accepted to view 5% unemployment rate as a state of full employment. The reason being, is that the power of the employees to demand a higher pay strengthens, which in turn, increases labor costs, and therefore – the product’s price. As the product’s price rises, it becomes less attractive in comparison to competitors. The company loses money, and is forced to fire workers. Because of this, in every capitalist society, there will always be who are left on the edge, unemployed, and weak.
In many capitalist states, there is a very week regulation, compared to the power of the wealthy and other interested parties (powerful worker unions in monopolistic positions). The weak regulation means that the few are enjoying themselves on the account of the many. Again, the claim is that this is yet another structural flaw that characterizes capitalist society.
The business community is responsible for a large portion of our knowledge, but how well can we really rely on this knowledge? When a company advertises its product as “eco-friendly” – is it for real, or just Green-Wash? Our claim is that this lack of trust is a built-in factor, and cannot be resolved. The lack of trust is also expressed in corruption – when people believe that they will not get good service, unless they pay additional sums to the service providers.
The inequality and wealth centralization rates in the western world have been nearing, over the last decades, those of the end of the 19th century, when western countries had become societies in which the wealth is controlled by an elite few. The culprit is a flaw in the capitalist system itself, which is created in a way that generates centralization and inequality. This great inequality endangers western democracy and threatens to make it an oligarchy, in which an elite few of wealthy people hold all of the power, where the wealth is passed on through inheritance, and the family into which you were born is of crucial importance for your economic survival in a world that is being more and more characterized by a deformity of income distribution.