Comment: Capitalism

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In reply to comment: Spending less = Saving (see in situ)


is based on the premise that if goods are produced, they will be bought, which will increase demand, furthering the cycle.

If money is saved rather than spent, then goods are not purchased, and businesses are harmed.

While it is the goal of an individual to raise their wealth, it is the goal of capitalism to have the wealth change hands more.

This is why, in many ways, a graduated or "socialistic" taxation program like we currently have is actually better for capitalism, because it takes more money from the rich (who would more likely save it) and gives it to the poor, who will more likely spend it. Not saying that's "right", but it is a basic function of capitalism. You need a flow of capital from the top to the bottom to keep the system going. Otherwise all wealth is concentrated to the top, the bottom have none, and it all comes griding to a halt.

The downside is if the staggard taxation of socialism is too high, that the rich end up taking their ball and going home (cashing out, closing factories). Then the system also comes to a grinding halt.