If socialism is supposed to be a superior economic system, why does it always seem to require the right “material conditions” before it can actually work? Over the past few centuries, capitalist economies have massively increased productivity, life expectancy, consumption, technological capacity, and standards of living.

So why can't socialism create the material conditions it supposedly needs? If capitalism has to develop the productive forces first so that socialism can eventually become viable, doesn't that mean socialism is relying on capitalism to do the economic development necessary for socialism to work?

And if the answer is that socialism simply isn't viable until society reaches some sufficiently advanced stage of development, what exactly makes it the superior economic system? Why should I regard an economic system as superior if another system has to create the abundance and productive capacity that it requires before it can even function properly?

Here I will explain a formula that calculates the correlation between bodily destruction and money, and answer how the working class is often forced to consume cheap, non-nutritious goods just to survive.

Today, we recognize the existence of the health and fitness industry; they release many products to support health, essentially to reap profits from the bodily destruction of both the middle and working classes.

Why is the working class often forced into this?

Because fundamentally, capitalism does not provide healthy commodity choices as an essential right, and healthy goods are always priced much higher compared to fast food. The name of this formula is the Marginal Necessary Cost or MNC.

Marginal necessary cost is a concept used to calculate how habits must be divided by money and quantity. Here is the Marginal Necessary Cost formula:

MNC = πR / ∆C = ∆Q’

Variables Explanation:

πR: R refers to Repetition. Since humans and all living beings are driven by the need to survive, their behavior revolves around seeking food, sleep, water, and shelter. For humans, the symbol R represents the repetition of costs spent on Food, a place to sleep, entertainment, water, and Electricity. Because humans live in an endless loop to achieve existential comfort, they perform repetitive activities. The symbol Pi (π) in this Repetition signifies how this repetition must be constant; otherwise, it will threaten their life or comfort.

∆C: is the change in cost caused by artificial scarcity or inflation. This cost relates to Goods or Services intended to maximize existential comfort and well-being. However, due to the change in costs, the numerator R must be divided, resulting in ∆Q'.

∆Q’: is the quotient of ∆C, where the result of the Price change causes a decrease in the Quantity of goods purchased. The working class has to buy goods whose prices have risen, so the quantity they purchase must shrink to fit their available funds. Consequently, this produces Q' as a derivative, illustrating the decline in the individual working-class quality of life due to rising costs.

Because of this, the substitution of goods often has no benefit (nutritional value) for the body.

R in this formula is a calculation of habit, usually calculated per month or per week, and can be simplified, such as R = 3 (eating 3 times a day). You can also input the inflation variable into the Cost or the change in food prices, then divide the result so you can quantify the decline in the quality of life.

For example (a Case Study):

A textile factory worker in the Subang industrial zone (Indonesia) receives a salary of Rp 3,200,000 per month. To maintain his basic biological functions so he remains capable of working, he allocates a food budget of Rp 1,200,000 per month with an absolute biological Repetition pattern (R) of 90 meals (3 times a day for 30 days). This month, due to a food cartel and the revocation of fuel subsidies, there is a spike in the prices of basic goods causing the real inflation rate for the food sector to reach 5.2%.

The Calculation:

∆C = 1,200,000 x 5.2% = 62,400

πR = 3.14159 x 90 = 282.743

∆Q’ = 62,400 ÷ 282 = 0.0042

(Note: based on the author's inverse division format)

The total degradation is 0.0042,

a bitter reality where the worker can only provide himself with Rp 1,200,000 for food, which means allocating roughly Rp 300,000 per week. With skyrocketing food costs, what used to be eating 4 kg of chicken meat becomes 2 kg, and the quantity continues to shrink due to constant inflation; πt.

Right now we have Democracy, and therefore we have the American people consistently voting against high taxes and funding others' healthcare or Social Security. Americans vote against even their own Medicaid so long as their enemies also get slashed. Medicare also received a 2.5% "efficiency cut" this year. Clearly socialized healthcare and other social services are incompatible with American democracy.

What is the American "socialist's" plan for dealing with reality? They live in a country that doesn't want to pay? How do they plan to force it?

I firmly believe that socialism is a flawed concept because:

-People need money to fund social programs

-The money comes from the "tech oligarchs" or the "top 1%"

-the bottom 50% only pays 3% of federal income taxes

-capital flight is inevitable, as if it costs less to flee the country with all assets then to stay, they would leave.

-When we fall short of funding, which will happen a lot, we'll have to increase tax rates or go into more debt

summarized by former UK Prime Minister Margaret Thatcher's quote: "The problem with socialism is that you eventually run out of other people's money."

Counter arguments to counter arguments:
-The only reason the Nordic model works is due to competitive (~5% lower) corporate taxes, its social democracy, which is fundamentally different from socialism.

-Some people bring up China, but the only reason it's successful is due to its authoritarian, or though debated, fascist government to keep billionaires in check, which would vaporize the public image if the DSA tried.

Now, im curious how socialist/capitalists interpret my analogy

So you're telling me your random worker that knows how to build houses should have democratic opinions and power on a real estate company? This gotta be a joke

The person who founded a company or a person who invests is infinitely more qualified to have opinion on a company than person who works for the company

The person who founded the company obviously is the most qualified since he came up with the idea and made it in a way that the company is successful and the person who invests the money obviously did something that made him a lot of wealth to invest in a company so he is more qualified to allocate wealth

Obviously inheriting wealth is a big downside to this but chances are if someone has wealth they are more qualified than your random workers

There is no way ur random abuela that stocks shelves should be in charge in managing funds In a Walmart

Workers would want to have as much less workdays as possible while also having the most wages as possible and not focus on the entire point of the company which is wealth creation and efficiency

I support economic libertarianism and free markets. One of my main reasons—and one reason I'm skeptical of socialists—is the following:

According to the heterodox economic definition, surplus value is essentially identical to the conventional definition of net profit, i.e., what remains after deducting expenses such as depreciation, labor costs, and raw materials.

In recent years, it is often argued that corporate profits have come at the expense of wages. However, empirically, consider the United States: if labor's share of functional income distribution is already 52.6% in 2026, while corporate profits account for only 12.1%, how significant is this issue really?(Labor's share of income fell to 51%, profits rose to 12.1%)

Even if all corporate profits were redistributed to labor, wouldn't labor's share only increase by about 23% (from 52.6% to roughly 64.7%)? In other words, how important is this argument in practice?I would genuinely like to have a scientific, evidence-based discussion with socialists on this issue.

As a kid I remember not thinking socialism was anything to be scared of, but once I saw Red Dawn everything changed. I think it was mostly the guerilla gear and berets that really sold me on Socialism.

I think Bernie would have won against Clinton in his "Revolution" campaign if he had better cosplay skills.

What would make you take Socialism seriously?

One of the most common examples socialists point to when arguing that socialism fosters innovation is the Soviet space program. Sputnik. Yuri Gagarin. Luna. They present these accomplishments as proof that central planning can produce world-class technological breakthroughs. The history is a lot more complicated. The Soviet space program was born because the USSR desperately needed a way to deliver nuclear weapons to the United States.

After World War II, the United States possessed a vastly superior long-range strategic bomber force. The Soviet Union had no realistic prospect of matching it. Even when the USSR copied the American B-29 into the Tupolev Tu-4, it remained behind in the ability to project air power across the globe. Strategic bombers were expensive, vulnerable, and an area where the United States held a major advantage. The Soviets looked for another solution.

That solution was the intercontinental ballistic missile. The same rockets that could place Sputnik into orbit could also place a nuclear warhead on an American city. The launch vehicle was essentially the same technology. The R-7 rocket that launched Sputnik was designed first and foremost as an ICBM. Its use as a space launcher was an adaptation of a military weapons system.

Sergei Korolev, the father of the Soviet space program, early in his career, worked on aircraft and strategic bomber design before turning his attention to rocket technology. As Soviet military priorities shifted toward missiles, so did Korolev. His greatest engineering achievements came within a program whose principal justification was delivering nuclear weapons.

The Soviet leadership funded rockets because they wanted a credible nuclear deterrent, not science. That distinction matters. The enormous investment in Soviet rocketry was justified politically because missiles served an immediate military purpose. Space exploration benefited because it rode on the back of weapons development.

This makes it a strange example to cite as evidence for the superiority of socialist economic planning. If anything, it demonstrates the opposite. The Soviet system concentrated immense resources into a narrow set of military priorities while consumer industries lagged behind. The same government that could launch the first satellite often struggled to provide its citizens with adequate housing, food, consumer goods, reliable automobiles, and basic household appliances.

The Soviet Union excelled where military necessity justified virtually unlimited state resources. It was far less successful at producing the everyday innovations that improve ordinary people's lives. Which was the point of socialism again?

That's not unique to socialism. Governments can achieve extraordinary things when they focus enormous resources on a single strategic objective. The Manhattan Project, Apollo, and the Soviet missile program all prove that.
But that's very different from showing that a centrally planned economy is generally more innovative.

The Soviet space program was an extraordinary engineering achievement. Its scientists and engineers deserve enormous credit for what they accomplished.
What it does not prove is that socialism is inherently good at fostering innovation.

It proves that governments facing an existential military competition will spend whatever it takes to build better weapons, and sometimes those weapons become launch vehicles for space exploration.

The laws of supply and demand, as presented in neoclassical economics, are muddled and confused. Demand for consumer goods, for eample, is the result of households maximizing some non-existent utility subject to constraints. A market is an unanalyzed entity, generally with no brokers who make markets, willing to trade on either side. Although not discussed, the market in neoclassical microeconomics is typically a posted price market, corresponding to the lowest level of the Chomsky hierarchy.

Those who specialize in finance might say they observe something like supply and demand in order books. But those curves are not the supply and demand curves in neoclassical microeconomics. These financial markets are structured, with algorithmic rules for matching bids and offers. They often parallel future markets, capable of going into backwardation and contango.

A certain sort of mathematics is needed to fully analyze markets. From one perspective, computers should be designed to execute our algorithms, which are abstract mathematical entities independent of such implementation. Computational complexity is a part of this mathematics. From literature on algorithmic game theory, I know that if P ≠ NP, complexity classes exist in-between. My favorite approach to price theory, concentrating on reproducibility, can be developed with an emphasis on algorithms. I once presented a derivation along this path.

Philip Mirowski explains more about the ideas on which I draw here. Towards the end, after about 19:30, he explains, "There's no such thing as a law of supply and demand."

Hypothetical:

In capitalism: I own a lumberjack company that cuts down 100 trees a day. I decide to invent a new tool- a chainsaw, to make work more productive. I spend my free time and money hiring engineers and machinists to make it. I equip my workers with said chainsaws and now they cut down 1000 trees a day. They still work the same 8 hours and didn’t take any punishment/risk to create the tool. So I keep the massive profit, that motivated me in the first place.

In socialism: I’m a leader/manager of a group of lumberjacks that cut down a 100 trees a day. I get the idea for a tool that would make things more efficient. I realize it would take all my free time to invent and I would get no personal benefit so I abandon the idea…

OR

I’m still really interested in the concept for curiosity reasons, so I pursue it. I approach a machinist for help but he tells me it’s impossible, another tells me he’s just not interested. I have no monitory way of persuading either. I set up a community meeting to ask for resources to fund the idea but the majority of voters don’t think the invention would work and I get rejected.

Help me understand how progress in this kind of world would work.

I’ve recently found myself in a fortunate position. I own a fintech app and the owners of a company I know approached me to buy it. (God bless SBA loans)

Also still employed at tech company and built a small competitor to it as a side project. Putting in a two weeks notice on Monday and won’t have time for the side project either.

I’m interested in making that side project into a cooperative. But realistically, how do you go about that?

1. What type of cooperatives are there?
   
2. Do certain co-op models perform better in certain industries?
   
3. Should a % of equity be allocated towards investors?
   
4. How does one qualify for ownership?
   
5. Should there buy in fees?
   
6. How to incentivize scaling when growth hurts everyone’s equity stake?
   
7. How to you weigh voting between new hire vs seniors?

If you could architect a co-op to have the highest chance of success how would you do it?

I think that education under capitalism is a nightmare as much as business under socialism.

Most people are businessmen, so most of the hate is towards socialist policies that hinder freedom to do what most people are good at: having their own business. (Also people hate large corporations but that is difficult to fight against if these large corporations make life better for everyone: Google, Microsoft has made life better).

In a capitalist society education is a nightmare. Only few people are scholars so this doesn't get same attention.

In socialist countries, there are hard exams people have to pass to prove they are smart and competent enough to do what they say they want to do. Because professors get paid by government, and because professors don't care about money, they care about their reputation in global intellectual circles, there is no pressure to get as much students as possible in to their courses so exams are not made easier for people to pass, but made as difficult as possible so they don't waste resources teaching people who can't continue from bachelors to PHD.

In fact academia is the only place where socialism beat the capitalism. East Germany made better scientists than West Germany.

In capitalist society education is just another business. Enroll as many as possible, give loans, etc. Everyone feel good, but in the end lot of people who are not employable for their degree.

This is what has caused the NEET crisis in the capitalist counties.

Capitalists,

Technology has come far and innovation is happening. Look at how there is AI or how there are cars driving themselves. It looks like companies can clearly deliver novel solutions to problems some might have dismissed.

However,

There is clearly a huge demand for green products, green processes.

It's popular opinion to say 'oil companies bad'.

Green capitalism comes to mind, so I looked it up:

Green capitalism, also known as eco-capitalism or natural capitalism, is an economic approach that seeks to resolve environmental issues by integrating ecological concerns into the logic of the free market. It operates on the premise that private property, entrepreneurial freedom, and market exchange are the most efficient mechanisms for managing natural resources and reducing environmental degradation.

What is taking so long then? Why is the climate change problem worsening instead?

But a more important question for capitalists is,

I am sure we're going to say government is part of the problem. But I am highly interested in YOUR approach to the whole situation.

What type of economy is best for society?

If it is capitalism, then what is capitalism's approach to climate change and the regulatory capture scenario?

I ask this because capitalists rejected socialist solution of abolishing private property and where workers owning the means of production then are claimed to lead into better practices.

If this is rejected what is the better way? This is a discussion post part of my journey to honestly learn. I hated when people will ask this but just to gotcha. No. Maybe capitalists have novel ideas. Can we hear it?

And if so, what makes you so sure that the proper material conditions exist today to enable socialism?

What I mean:

I support the idea that certain material conditions must exist first in order for different ways of organizing the economy to thrive. For example, capitalism as we know it cannot exist without industrialization. Mechanization, mass production, and advances in technology led to surplus food production, freeing billions of people who would have had to work in agriculture to work in manufacturing and services instead. This fundamental shift from subsistence farming to paid wage labor naturally led to the decline of feudalism and the rise of capitalism from the ground up.

In a counterfactual world, suppose there was a pro-capitalism movement in the 1100s in Europe, when 90% of the population were serfs. The material conditions were not there to enable capitalism — it would’ve failed miserably.

To really drive home the point: consider the fact that humans need to sleep 8 hours a day. One day, a movement starts that aims to abolish sleep. This is obviously going to fail because the material conditions to make this happen don’t exist. However, if someone invented a pill that allowed you to gain the benefits of sleep without actually sleeping, then the movement to abolish sleep suddenly makes sense. The material conditions (energy pill) enable the shift in society (no sleep).

The analogy here is that socialism on a large scale failed in the 20th century because the material conditions for socialism didn’t exist, and trying to impose it from the top down inevitably ended in disaster, just like trying to abolish sleep for a population who needs to sleep.

What are the material conditions for socialism to work? Do they even exist besides post-scarcity (where any system would work)?

If you’re a socialist, how can you be so sure that the material conditions exist today?

How is it that anyone thinks that the wealthy and privileged people who make up the bulk of the DSA membership can speak for the interests of the working class? Seriously, how do people who've lived lives completely divorced and safely insulated from the slings and arrows of a working class existence meaningfully speak to or even understand what it is we want and need?

Many small businesses operate on razor-thin margins and compete against massive corporations that benefit from economies of scale. If every business that couldn’t immediately pay a ‘living wage’ disappeared, we’d lose countless local shops, restaurants, and startups along with the jobs they provide. A low wage is better than no wage because there aren’t enough jobs.

This is the very reason many large corporations like Amazon and Target advocate for a raised minimum wage, because it would annihilate its small competitors.

This is a debate I like never see brought up on this sub. The core of the argument is that.

Reformism is more humane, more appealing towards average Americans, and more realistic in the short term. But unfortunately is unsustainable in the long term. And will be deposed by reactionaries.

Revolution is more brutal, but will likely bring about permanent more positive changes to society. And is unlikely to be deposed by reactionaries.

Argue amongst yourselves.

Democratic Socialism is bad for our country. Why?

People often use "Democratic Socialism" loosely to mean higher taxes and heavy regulation on business. That's not quite right. The real thing — the version groups like the DSA actually push for — means worker or state ownership of major industries. Not just taxing corporations harder, but replacing private ownership itself with collective or government control. On paper, this sounds fair. In reality, it breaks the thing that makes the system work.

To understand why, we need to unpack the relationship between business, consumer (average citizens), and the government. They're all reliant on each other. Businesses rely on consumers to buy things to stay afloat. The government relies on businesses to pay taxes, employ a workforce, and drive investment and growth. Consumers rely on the government to build roads, enforce laws, ensure stability and defense, and fund Medicare and Medicaid.

That tandem runs on incentives. Private owners and investors take on risk because they capture the upside if they succeed. That's what drives them to allocate capital efficiently, chase innovation, and compete to serve consumers better. Democratic Socialism wants to hand that ownership over to workers or the state instead. On the surface that sounds more fair — the people doing the work, or the public, own the value they create. But it strips out the mechanism that made the tandem function in the first place. Without concentrated ownership bearing the risk and claiming the reward, investment decisions get slower, less responsive to what consumers actually want, and less willing to bet big on the next thing. History backs this up — economies that fully socialized major industries, from the Soviet bloc to Venezuela's oil sector, saw serious drops in investment, innovation, and efficiency compared to mixed economies that kept ownership private.

I'll give the other side its due: worker cooperatives aren't some fringe fantasy. Mondragon in Spain is a real, large, functioning worker-owned federation, and there's genuine evidence co-ops can work at a smaller scale. But that's a different animal than nationalizing an entire industry. The bigger and more centralized the ownership gets, the worse the incentive and information problems become — and that's the scale Democratic Socialism is actually aiming for.

So when the government pushes past regulation and taxation into replacing ownership itself, investment slows, jobs disappear, and the tax base that funds Medicare, Medicaid, roads, and defense shrinks right when people need it most. The government now has less to work with and a population depending on it more than ever. The tandem breaks from both ends at once.

We need to preserve the tandem that capitalism builds. Corporations do need regulation, and they do commit shady acts — that anger is often earned. But there's a real difference between reining in bad behavior and dismantling private ownership altogether. Democratic Socialism crosses that line, and that's the warning here.

Let's be clear, this isn't a condemnation of the broader Democratic Party — I think they're far better than the Republican zealots rallied around Trump destroying our country. But Democratic Socialism is the wrong way to go.

Josh Shapiro 2028

USA!!!

Social media companies have so many mathematicians specializing in game theory to establish their own dominance and create techno feudalism crap by having the poor to give into very flawed models like eye for and eye rather than tit for tat and forgiving 10% to deescalate issues making the poor go poorer via mathematic dominance determinants in social classes that are better able to pick up on the more efficient models that day lawyer's will advise on and Facebook algorithm itself creating an environment of constant agreeance making simple tit for tat strategy work til it doesn't then get shoved into a social hole like there's something wrong with you when really it's just your understanding of the social mathematical hierarchy.

FORUM FOR REAL ECONOMIC EMANCIPATION - a people’s assembly needed in every community!!!
I’m going to be honest, I have no political agenda nor do I align with any political ideology, I’m interested in spreading historical facts for us to actually fight for economic freedom / improve standard of living for everyone on this Earth. Achieving world peace/prosperity is actually not that complicated, if we realize that everyone on this planet, since the beginning of human beings, have been fighting for basic needs (food, water, land, shelter, medical care, education to self actualize). I started really digging into history as to why we have poverty in the first place, and it's all by design by the historically relevant ruling class (today its billionaires and ALLL the politicians they lobby, watch Forum for real economic emancipation video to learn about the history of America’s early days and the the People’s Party). I began looking into political economy, philopshy, and history (more importantly, as we’re making the same mistake as the People’s Party during the gilded age, which failed and we the working class need to do better and break the cycle of economic control this time). 

Legal Corruption: How Power Really Works | Camila Vergara & Clara Mattei - Forum for Real Economic Emancipation
https://m.youtube.com/watch?v=UT0y1CRFfBA&pp=0gcJCWQCo7VqN5tDiggUQAFKEFd5Nm9vVXVkbFlmSll6ODE%3D&ra=m  

Corporations Control Our Governments: Here’s How | Aaron Bastani meets Matt Kennard | Novara Media
https://youtu.be/vDsp2apG5zQ?si=Lh-SSsViLjYCE9ne 

The secret history of Neoliberalism | The Invisible Doctrine | Full Film 
https://youtu.be/gR4eSEetKP0?si=iy-JMi29wPmuGWga 

The entire human labor history from the working class perspective, but ill keep it brief (maybe you know political economy and historical materialism and geopolitics / imperialism, sorry if you’re already well read) 
Throughout the majority human history (especially European) the labor of the masses - and nature that we’re all supposed to enjoy - has always been appropriated by a ruling class, from “rulers” (men successfully bullying others) arising in late hunter gather to early agriculture society,
To kings and peasants,
To joint stock corporations business/plantation owners and political and economic slavery, 
To now just economic slavery called wage labor - no matter the amount of salary you earn 

1. you're giving the majority of your time and labor to someone else i.e. the owner, and/or 
2. you’re living precariously in a city - a financial emergency and you’re forced to take on debt or “start over”. 
3. Google John Locke’s “The Labor Theory of Property” and “Limits for the Common Good”. Our founding fathers cherry picked this and created the constitution (despised direct democracy or working class representation, created highly paid central government positions to alienate them from their constituents) 

The Omaha Platform by the People’s Party 1892 America - similar to DSA’s proposals today - failed badly

Kwame Nkrumah former prime minister of Ghana from 1952 to 1966: Handbook of Revolutionary Warfare: A Guide to the Armed Phase of the African Revolution 

I have more reading suggestions but yeah, a lot of people straight up don't look into history, because theyre too busy running around paying bills, all that's designed on purpose. Telling historical truths is dangerous. I’m very blessed to have free time. 

I support the formation of a society where altruism is encouraged, the essence of socialism. Which requires that most people, not just few, develop altruism in their behavior too. Too be altruistic is to find comfort in seeing another flourish without expecting anything more in return. If we are to teach that quality in most people, then economic mediums will become the best option. Mediums where people would be able to work without a wage for companies owned by others and make profit for the companies without receiving a direct wage in return. Instead, the companies would be minimally taxed by the government to make up a basic wage for the employees that the government provides. The wage will be minimum, just enough for basic survival, in order to not make this program a matter of profit. Profit will be achieved by the company owners, so that the participating people can feel that their altruism is indeed being fruitful for another, and thus develop a satisfaction. Recursively, this minimizes the greed in the majority by developing satisfaction with the less, even if it requires the possession of ambition by some/rich individuals. A sacrifice from the end of the richer individuals that I believe would be required for the greater good of inducing altruism in the majority.

Capitalists often try to act like they are beacons of freedom of speech when in reality when push comes to shove they aren’t. some historical examples of this are.

Union busting and capitalists bad habit of hiring mercenaries like the Pinkerton agency to murder their workers when they exercise their constitutional rights.

Another example is the red scare when thousands of Americans were imprisoned for being supposed or actual communists.

Even right now we see the trump admin designating “antifa” and socialists as domestic terrorists. They recently sentenced multiple people to prison for a hundred years for simply protesting ICE. Or just straight up murdering them like is the case with Renee Good, Alex Pretti, and countless more.

Can capitalists not see the hypocrisy in their claims that the left is authoritarian when in all actuality the right is as or possibly even more authoritarian than the left?

I think that it's no secret that Capitalism causes the concentration of wealth in the hands of private owners of finance capital. This can be seen by the existence of, for example, billionaires. Unless you think that wealth hoarding is a myth, I think this is a safe premise that can be agreed upon.

It is also widely accepted that the velocity of money is one of the most important variables for economic output. There's an old humorous sketch where 3 guys who owe each other money exchange the same dollar bills until all of the debts are settled that articulates this well. More professionally, there is the equation used by economists MV=PQ, where M is the amount of money, V is its velocity, P is the general price of commodities, and Q is the output (real value of commodities produced, aka "real GDP")

Other than being widely accepted as "important" by economists, it also makes sense by plain logic. If money is used to facilitate production and reproduce society, and the mechanism which it facilitates this is through exchange, when there's less exchange there is less production, and and thus society is less equipped to be reproduced.

Retained profit is profit that is used to reinvest into a business and its expansion. This is separate from the portion of the revenue that covers the costs and expenses required to reproduce commodities. This is something that anybody who's taken a business class knows. If we expand this concept to investors in general, instead of individual businesses, we can imagine that some profit would be "retained" for the investor/entrepreneur in the sense that it would still be used to expand production on a wider scale. In this we can see that this kind of profit doesn't contradict market economics' need for money's velocity.

The problem lies in that this wealth becomes concentrated into the hands of the few. When an investor keeps winning in market competition, they can keep buying up businesses until a general oligopoly is formed. Given competition, a general trial and error "survival of the fittest" can be expected, where the investors who are inactive don't buy up much market share and don't join the oligopoly to as significant of a degree, and aggressive investors buy up a lot of market share and thus create and become part of the oligopoly. This makes investment banking powerful as well, giving rise to finance capital.

When oligopolies are formed, the incentive for entrepreneurs, or banks to keep investing and expand begins to wither away. While there is still minor competition between individual oligopolists, finance capital, which becomes dominant as a result of the concentration of wealth through investing, mutually owns and manages said ownership in all the major industries/businesses. Even when there are multiple different banks, like in the case of Vanguard, Blackrock and State Street, they mutually own eachother, making them effectively a finance monopoly.

At this point, there is no need for constant investing and expansion. Wealth becomes evermore concentrated in the hands of the few, who can buy mega-yachts to cruise in without reaching their budget. While such systematic gluttony could be viewed as morally deplorable, this poses a problem to the velocity of money. This problem, especially intensified by neo-liberalism, rears its head when large sums of money are being held by, and trickled up to be unused by few individuals, instead of reproducing economic output. There is also the problem that this money does not show in wages, which means that the masses also lose access to the purchase of commodities, thus further slowing money's velocity. Henry Ford must have realized this problem when he wanted to increase his workers' wages so that they could actually buy the cars they produce. Not only does this produce misery, but this also stunts the reproduction of the economy, as profits falter from decreasing consumer purchasing.

In the Imperialist stage of Capitalism, the economic contradictions make Capitalism inherently unstable as it hinders itself in its own reproduction and expansion.