Capitalism sold us a fairy-tale.

Companies compete for customers, they improve products so it breeds innovation and they also compete for workers, so it gets better for everyone! Except it doesn’t.

The reality is quite the opposite. Here’s what happens. They want to maximize profits so that the owners of the company get more money. How do you maximize profits?

• You can advertise, and attract more customers. Alright, but eventually everyone has a widget. Maybe you can poach some customers from a competitor, but ultimately the market is saturated. Things get replaced as they break there’s a natural equilibrium. How do you increase profits?
• You can charge more. Raise the price. That only works so far before you lose customers to your cheaper competition, again you reach an equilibrium. How do you increase profits?
• You can innovate! Oh yes, that’s what capitalism is all about, improve your production, instead of 5 parts that need to be screwed together, now it’s just one part that falls out of a machine. You spend less time making each widget so you make more profit. But eventually there just isn’t any room to innovate any more. How do you increase profits?
• You can use cheaper materials. But here again, you bump against an equilibrium, the cheaper materials often break more easily - sometimes that is wanted (planned obsolescence) but your customers will notice the drop in quality and eventually they’re not willing to pay as much for your widget any more. How do you increase profits?
• Well, the last big item on your list: payroll. Do more work with less staff, or in other words pay staff less.

So what you end up with is low quality products, it’s a race to the bottom of who can make the crappiest product that the customers are still willing to pay for.

And for the workers? Well, they don’t earn much, we outsourced their work to overseas or replaced them with machines and computers. All the money went into the pockets of the owners and now the workers are poor. They’re desperate to even find work, any work as long as it allows them afford rent and barely not starve. If one of them has concerns about the working conditions, fire them, somebody else is more desperate and willing to accept the conditions.

So capitalism is destined to make us all poorer. It needs poverty as a “threat” to make you shut up and do your work “you wouldn’t want to be homeless, would you?”

The problem is not money itself, it’s not stores or being able to buy stuff. That’s an economy you can have an economy without capitalism. The problem is that the capitalists own the means of production and all the profits flow up into the pockets of the owners. And often the owners are shareholders, the stock markets, they don’t care if a company is healthy, or doing well by their employees, all the stock markets care about is “line go up”, and it’s sucking the working class dry.

Regulation can avoid some of the worst negative effects of capitalism. Lawmakers can set a minimum wage, rules for working hours, paid time off, health and safety, environmental protection etc. Those rules are often written in blood. Literally, because if not forced by law, capitalism has no reason to care about your (worker or customer) life, only profits.

Oppose that with some ideas of socialism. aka. “The workers own the means of production” This is something some companies practice, Worker cooperatives are great. The workers are the owners, if the company does well, all the workers get to enjoy the profits. The workers actually have a stake in their company doing well. (Technically if you’re self-employed you’re doing a socialism) Well, that’s utopia and probably won’t happen, maybe there’s a middle ground.

Unions are a good idea. Unions represent many workers and can negotiate working conditions and pay with much more weight than any individual worker can for themself.

Works councils are also a good idea, those are elected representatives of the employees of a company. They’re smaller than trade unions, but can still negotiate on behalf of the employees of the company. Sometimes they even get a seat on the board of directors so they have a say in how the company is run.

That’s how you can have capitalism but also avoid the worst effects of treating workers and customers badly. Anyway, unchecked capitalism is not a great idea. The USA would be an example of such unchecked capitalism.

Especially when you know that money equals power and the wealthy can buy their politicians through the means of “campaign donations” and now the owners of companies control the lawmakers who write the laws these companies have to abide by … From Europe we look at the USA and are mortified, but let’s not make this even more political.

We have made mistakes.

We wanted it all to be free. It was free. I remember the early days of the internet, the webforums, the IRC, it was mostly sites run by enthusiasts. A few companies showing their products to would-be customers. It was awesome and it was all free.

And then it got popular, it got mainstream. Running servers got expensive and the webmasters were looking for funding. And we resisted paywalls. The internet is free, that’s how it’s supposed to work!

They turned to advertising. That’s fair, a few banners, no big deal, we can live with that. It worked for television! And for a while that was OK.

Where did it all go sideways? Well, it was much too much effort to negotiate advertisement deals between websites and advertisers one website at a time, so the advertisement networks were born. Sign up for funding, embed a small script and you’re done. Advertisers can book ad space with the network and their banner appears on thousands of websites. Then they figured out they can monitor individual user’s interests, and show them more “relevant” ads, and make more money for more effective ad campaigns.

And now we have no privacy online. Which caused regulators like the EU to step in and try to limit user data harvesting. With mixed results as we all know. For one it doesn’t seem to get enforced enough so a lot of companies just get away with. But also the consent banners are just clumsy and annoying.

And now we’re swamped with ads, and sponsored content written by AI, because capitalism’s gonna capitalism and squeeze as much profit as they can, until an equilibrium is reached between maximum revenue and user tolerance for BS. Look up “enshittification”

I wonder how the web would look like if we had not resisted paid content back then. There were attempts to do things differently. flattr was one thing for a while. Patreon, ko-fi and others are awesome for small creators. Gives them independence and freedom to do their thing and not depend on big platforms or corporations. The fediverse and open source are awesome.

There’s still a lot of great stuff out there for those of us who know where to look. But large parts of the internet are atrocious.