How do we fix capitalism?
Is Capitalism even broken?
Arguably, Capitalism is working just the way it was designed to. Over the decades, the majority of wealth has been concentrated up at the top, with the pandemic contributing to this wealth transfer in epic proportions.
When I say “fix” capitalism, I am meaning to fix the end goal of capitalism.
We need to transition capitalism to a system in which everyone can flourish. As it is right now, many are disenfranchised and suffering, and to me that does not illustrate a fair and just system.
I’m a socialist at heart. I believe that humans have created amazing things and technologies (while causing irreparable damage) and that there is no excuse for anyone in this world to be going hungry. We have the resources to take care of everyone, but yet we don’t.
I don’t believe capitalism is an all or nothing thing. I think that we can change capitalism into a fair and just system, and I have some ideas which would help it move in that direction. I shared all of these in a TikTok series, which I will link in the headings below. Feel free to head over to TikTok and share your thoughts on these ideas!
Idea #1: Wage caps on CEOs
In order to see a real-life example of the wealth gap between the rich and poor, look no further than the gap between the highest and lowest paid employees in most organizations. Executive compensation has gotten out of control (both in salary and stock options), while the lowest paid employees have endured stagnant wages.
In Canada, unlike in the United States, there is no limit to the amount of executive compensation which is allowed to be deducted when calculating the corporation’s taxable income. We need to implement similar limits on this, otherwise it is way too tempting for corporations to massively inflate these wages to reduce their tax bill.
Further to this, the highest wage in an organization should be tied to the lowest wage. For instance, the highest paid employee cannot make more than 10 times the lowest paid employee. Some say this should be 5 times, others say it should be 100 times. Either way, there needs to be a connection.
This won’t prevent executives from paying themselves well, but it will ensure that others in the organization also see wage increases.
Idea #2: Disallow throwing out items
Nothing grinds my gears more than when I hear about the amount corporations throw into dumpsters.
Whether this be food that is imperfect, or just past it’s expiry, it is going into dumpsters instead of being distributed to those who cannot afford to eat.
This should be illegal.
BuT tHe LiAbIliTy they’ll cry… what about the liability that corporations should have for gouging consumers at a time when many cannot afford to eat?
Similarly, stores that have merchandise they can’t sell will often destroy these items before putting them in a dumpster. This is an incredibly wasteful practice and should not be allowed. It is bad enough that so many of these items are manufactured in ways that are harming the environment, but to take the products of this manufacturing process and put them directly into a landfill is the epitome of evil, in my opinion.
Idea #3: Protection for whistleblowers
Corporations right now are teeming with overworked and frustrated employees, who don’t speak out about what is happening out of fear for their jobs and livelihoods. Employees are forced to be complicit to all sorts of shady practices that contradict their own morals in the name of collecting a paycheque.
For those employees who won’t go along with the shadiness and speak out internally, they’re often shown the door quite quickly. They’ll be given a golden handshake - a payout, if you will. In return for this payout, they will have to sign an NDA which legally prohibits them from speaking about the organization.
The answers to fixing corruption exist within the corporate employees - past and present. Because of the scenarios above, they will not speak out for fear of personal financial ruin. We need to set up a system to not only protect whistleblowers, but to compensate them so that speaking out doesn’t cause them harm.
Idea #4: No more NDA’s
Tying into idea #3, I don’t think corporations should be able to utilize NDAs, except for in situations where the NDA protects intellectual property.
NDAs prohibiting employees from speaking about the abuses they have endured, or witnessed, should not be allowed. NDAs which force employees to stay quiet about illegal activities being performed by corporations should not be allowed.
Illegal activity needs to be called out, full stop. The laws and judicial system should be protecting citizens, not corporations.
Idea #5: Pierce the Corporate Veil
A corporation is a legal entity which can “sue and be sued”.
As such, the actions of employees and executives of a corporation are covered under the liability insurance of the corporation.
When someone murders someone, they are charged with murder and are penalized accordingly.
When executives around a boardroom table make the decision to hike prices of food so much that many can no longer afford to eat, they will contribute to the starvation of a population. Where are the murder charges? These decisions which are harming society are done so with no accountability and with immunity, and that needs to change.
If these decision-makers were to be held personally liable for the consequences of these decisions, I think they might reconsider some of them.
Idea #6: Tax the Churches
I’ve always thought that churches should be taxed. It never made sense to me that they weren’t, especially given all of the news pouring out about the atrocities committed by the Catholic Church in North America.
It also seems that the churches are acting as a vessel for money laundering. This article shines some light on what is happening, and I believe this is just the tip of the iceberg. The amount of social programs that could be funded if churches had to pay their fair share of tax would be enormous.
Idea #7: Reform the Stock Market
The stock market is a vessel to extract wealth from society and funnel it up to the rich. I have posted many criticisms of capitalism and the stock market on TikTok, and am usually met with a barrage of misinformation on what the stock market is, and how it operates.
People think that the stock market is where the shareholders continually inject money into a corporation. The reality is, after the IPO (initial public offering) when the shares are initially sold - subsequent buying and selling represents profits going to shareholders, not the organization. The only continual flow of funds as time goes on, is the dividends that are paid out of the corporation to the shareholders in dividends and share buybacks (which is another issue for another day).
In order to keep their shares trading at higher and higher prices, the corporations must continually pay out dividends to their shareholders. It is a never-ending tap into corporate profits, and it is sucking society dry.
As we endure late-stage capitalism, profits have been maximized. The continual strive for MORE profits is causing some nefarious things to happen in order to get those profits, such as overworking employees, understaffing, price gouging, eroding quality of product… etc. Anything to squeeze every last ounce of profitability, and it has to stop.
Idea #8: Transparency in Financial Reporting for Foreign entities
When I did my grocery greedflation series, analyzing the large grocery conglomerates to look at their profitability and the amount of taxes they paid, I found myself quite frustrated when I attempted to examine the American players currently operating in Canada.
Specifically, I looked at Walmart, Amazon and Costco. All of these are publicly traded companies in the United States. They have Canadian entities, which are subsidiaries of the US company. As such, the financial results of the Canadian operations are rolled up (down?) into the US results and the publicly released financials are those of the parent company.
Unfortunately, there is very little mention of Canada in these consolidated statements. In the case of Walmart, Canada isn’t mentioned once! Where is the transparency here? We should be able to also see the standalone financial results for these foreign corporations operating in Canada, so we can see their profit margins and how much tax they’re paying, for comparison purposes.
Idea #9: No more government subsidies
During the pandemic, and many times throughout history, government has ‘bailed out’ corporations. When they do this - they are taking our taxpayer dollars and giving them to corporations. This alone is problematic, but even more problematic is that these corporations who take these government subsidies often turn around and pay dividends to their shareholders with it.
The CEWS program in Canada was a program intended to help corporations survive the pandemic, and prevent layoffs - the reality is, many companies took this funding, paid their shareholders with it, and laid off employees anyway. This article outlines how this took place in the telecoms industry in Canada, but this is just one of many examples of this happening. In my opinion, this money needs to be clawed back from any organization who took the funds and also laid off employees or paid shareholders in the year they took it.
I think any government subsidy should be paid back in full to the taxpayers before any dividends are able to be paid to shareholders.
Idea #10: Increase corporate tax rates
Corporations should be paying way more in taxes!
Often, their effective tax rate is so much less than the average citizen. There are so many tax loopholes for corporations, and the bigger and more profitable they become, the less they seem to pay in tax. Canadians for Tax Fairness put out an excellent article on this phenomenon.
Especially as the profits soar into the billions, a large chunk of that needs to be going back to the government via taxation, and in turn used to fund social services for the very society it was extracted from.
Instead, the rich just keep getting richer.
#eattherich
I have been very vocal on TikTok with my “radical, anti-capitalist” views, and I am pushing for fairness for all citizens.
My passion is helping small business owners, and I know how hard it is for them to compete with the big guys who have taken over. We need to reform things in a major way, so that everyone has an equal opportunity to prosper and help society.
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