In fact, say for example you work in a factory and are paid $10 per hour. In a day’s work you produce $200 worth of product. However you are only paid $80 that day - where did the other $120 come from? Workers are paid for their ability to work and not the work that they do. We are given enough money to live (just) so we can maintain a steady pool of workers for exploitation by the capitalists. The extra $120 goes as profit to the capitalist. He gets this money purely because he previously had enough money (capital) to own factories, equipment, etc. but he has actually done nothing productive in this process. (In fact, if you remove the capitalist taking profit, production proceeds quite smoothly - the same is not true if you remove the workers). This extra profit on top of wages is called surplus value. After spending some of the surplus value on mansions and private jets, our capitalist is forced to re-invest the surplus back into production. Investment is the motor force of the capitalist economy and helps improve the productivity of labor. If our capitalist does not invest, then he will be out-competed by other more efficient capitalists who do. If investing in new machinery makes production 20% more efficient then the boss can fire 20% of the workers (or cut everybody’s hours 20%) and still make just as much stuff. Unfortunately for the capitalist his profits are based on how much labor is worked ($120 per worker); when he fires people the rate of surplus value to investment decreases. This is fine as long as the market is growing and the capitalist is selling more items in total (even though the profit per item is decreasing - the recent explosion of the computers market is an excellent example of this). Unfortunately this eventually reaches its limits; the tendency for the rate of profit to fall means that an initial relative reduction in profits turns into an absolute reduction in profits. Workers earning $80 a day can only buy so many computers and the capitalist cannot sell his goods at a profit. Our poor boss is forced to close factories and lay off even more people (e.g. Nortel Networks). While we may gain intellectual satisfaction in the fall of a particularly exploitative employer, it is clear that the workers in this situation are far worse off than the boss. The crisis of capitalism is systemic.

Yes, I've considered it, and I believe it doesn't work. It works fine for a time, in a monetary-based society, but after that time of usefulness, the divide is just too great and capitalism makes it harder for the small to get big, and easier for the big to stay big. Eventually, the giants must topple, and the damage done reaches so far. I mean, think of it as a huge skyscraper building falling - yes, the building crumbles so the giant is destroyed, but the fall out from the fall hits far and wide, sending dust up into the air, debris rains down on the surroundings. Nothing is left unscathed.

What I think would work better is something I heard about watching the Zeitgeist film: a resource-based economy.

There is a project out of Florida called the Venus Project (link in the resources) that talks about how a resourced-based economy would work over a monetary-based economy, and the more I read, the more it made perfect sense to me.

Everyone gets to do what they are good at, what they are best at, what they enjoy, and there's enough resources for everyone and everything.

We live in a world of abundance... when we make things based on monetary systems, the only way the monetary system works is to limit the abundance. (I.E.: the more expensive something is, the more people 'perceive' it to be worth), and limiting availability adds scarcity which adds to perceived value.

Monetary-based systems limit abundance. Resource-based systems share abundance and expand it.

Capitalism doesn't work long-term. Period.

I have considered the idea, but I've abandoned that theory. Capitalism works wonderfully. A large number of people complain that it doesn't because they don't understand that the system can be leveraged in more than one way. The theory that a worker goes without while the guy at the top wins is too simplistic to contain any truth. Owners, investors, operations managers and biz dev guys all play important rolls. Without them, the workers would scatter and then fail to produce anything. I have read about one solid, glowing exception to this rule, but I unfortunately can't find a second one.

With all the examples out there of people going from broke to rich in a matter of 20 or 30 years or less, I find it unfortunate that anyone out there would feel capitalism or "the man" is holding them down.

I've given a lot of thought to the workings of economic systems. And by a lot of thought, I mean I've done post-grad level work, hung out in think tank seminars and the like.

First of all there is no one never-changing thing called "capitalism" any more than there is such a thing as a same-everywhere never-changing "democracy". These things are always evolving, partly in response to what worked well, and what went badly. Partly this evolution is intentional, with people designing policies and institutions to achieve some purpose or solve some problem, but a lot of it just the end result of lots of different unplanned changes by lots of different people acting independently in response to what's going on in their own lives, businesses or communities.

Secondly, when people think of capitalism, they are usually thinking of something that doesn't exist at all in reality. In reality in every rich country in the world goivernment activities make up 30-50% of the economy, and on top of that the private sector operates within a framework of laws and policies dictated by government.

It's ended up like that as a result of the evolutionary processes that I talked about before. Through the history of a couple of hundred years, we've discovered ways in which a 100% free market economy sucks, and we've discovered ways in which a 100% socialised economy sucks. Within that range the pendulum has swung back and forth in response to particular problems and the lessons of history. And it'll keep doing that as we keep learning more about what works and what doesn't.

Overall, the economic systems we have in the West work pretty well.

"Pretty well" is about as good as you're going to get with any system.

Pretty well means you have a life expectancy of over 70 years, and you are unlikely to ever be really hungry a day in your life. Not only will you get to live for 70 years, and not be hungry, you get to eat pretty damn well, you'll get a home that would seem wonderful to people who had the misfortune to grow up in other times and with other economic systems, you get to have vacations pretty regularly, you get to watch TV and play on the net and so on and on.

You take all this for granted because you know nothing else.

Look at comparisons with countries that have tried other systems, and you'll realise none of that is inevitable. Consider the difference in quality of life between former West Germany and former East Germany, between Finland and Estonia, between Miami and Havana, North Korea and South Korea. Even in the same country in different eras with different policies - China and India and Vietnam, before and after they become a lot more "capitalist".

There's a reason why most everyone from the Chinese Communist party to Nelson Mandela has accepted that the way to go is basically a mixed economy, with a big role for free markets together with government action to mitigate the problems that come with them.

Like Winston Churchill said about democracy, what we have is "the worst system, apart from all the others".