From The Distributist Review.
Capitalism fails on a number of levels philosophically; however, here we will limit ourselves to its failures due to its fundamental misunderstanding of the nature of human economy, based on the principles we’ve discussed previously.
When a society begins to mistake money for wealth, it begins to dedicate itself to the production of money rather than to the production of wealth. The accumulation of money is seen as the acquisition of wealth, and the constant flow of money is seen as the lifeblood of the economy. Because money must be constantly moving, this system requires the greatest amount of spending by the greatest number of people possible. This encourages everyone to continue accumulating still more money, and so on, ad infinitum.
The capitalist, of course, argues that this fact also encourages production. After all, people have to be spending their money on something, and someone has to produce that something. This argument, however, misses the material point, which is that the purpose of this corrupted system is to produce money, not wealth. While people certainly spend a good deal of their money on things, and that those things must be produced, people also spend large quantities of money on things which have little or no real wealth behind them.
The current system is interested in producing money, not necessarily in producing wealth. So men in our system naturally turn to those professions which can produce the greatest amount of money in the shortest amount of time. Needless to say, this does not include farming or shoemaking; rather, it consists largely in finance. Short selling, ludicrously complex derivative packages, credit default swaps, and various esoteric types of insurance are the lifeblood of such a system. Trading money back and forth to each other while selling each other insurance on the packages occupies an astoundingly large portion of our population. Meanwhile, the portion engaged in such tasks as growing food and making tools continues to dwindle.
In other words, it’s clear that people still consume as they always did; however, what they consume, how much they consume, and what’s behind that consumption are quite different.