1. Introduction
Basic premise of capitalism is that skilled people are starting new businesses, inventing new products which are succeeding at the markets and are achieving profits, which are by merit their reward for taking risk and generating innovation. Profit is reinvested through banks and capital markets into new companies which again spur new innovations, new companies and the cycle is repeating indefinitely. Successful companies are generating employment, taxes, unsuccessful go bust and make space for those that are better able to satisfy demands of customers and better use capital and natural resources. At the first glance it looks like that there is no mistake in this equation, that the system is perfect and is an ideal way of organizing the human society.
Why do we then have an economic crisis? Why every 30 or so years comes the stock market crash and savings of millions are changed to dust and millions more are sentenced to life without perspective? Why those scores of unemployed which are not able to find the jobs whatever they do? Hundreds of thousands of people are losing their roof above their heads, people are dying on the street without health insurance. It is 21st century. We have all the technical inventions one can dream of: computers, electron microscopes, space shuttles that got us into the space and yet we are not able to achieve social peace and prosperity for all.
The problem is in the system itself. It is not very obvious, from the perspective of individual, company it is not possible to see hidden faults, built-in genetic code which is programmed to destruct this perfect system. It will manifest itself only on global scale, gradually as the time goes by. The time will allow the pathogen to fully develop, reach the breaking point where it is no more possible to pretend that the problem does not exist. When the illness takes full-blown shape, it is important to understand its origins, reasons, methods of growth and manifestation techniques so we could implement the correct cure in time. If we decide correctly, we can heal our economic system. If wrongly, economy will die. That already happened in the 30ies, during the Great depression. Advices of that time leaders and economists were: Austerity!!! Liquidate labor, liquidate stocks, liquidate farms. Consequences were devastating. Total economy depressions, millions of unemployed, crash on every level. Did we learn our lesson? Do we know why it was so wrong, what was the reason that caused such great fall? Is today’s situation the mirror of thirties? The saying goes one who does not learn from history is destined to repeat it.
Let´s have together a look at how, without ideological prejudices and colors, the profit is created, how it is accumulated and distributed, what is capital and what are the genetic rules of our capitalistic system.