HOW EXACTLY NEOLIBERALISM KILLED SO CALLED CAPITALISM, with discriminating the human capital , with debt, austerity and the rest….
The story of the cup.
The saying goes that if the cup or glass is half empty or half full we may be optimist or pessimist. Ok, it is definitely a visual trick. The real story is not half full or empty, the real story is the cup. The form defines the content and viceversa, so, the story is a waste of time.
Lets take a look at the cup. The capitalist system of the cup, its form and its content is based on core, boundary condition of what is a cup. Here, the manipulation of the content will be clear soon. The core postulate of capitalist system is the RETURN ON THE CAPITAL.
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YOU ASKED:
YOU SAID, HI GEMINI, WHAT IS THE RETURN ON CAPITAL
hi Gemini, what is the return on capital
GEMINI REPLIED:
GEMINI SAID
Return on Capital (often referred to in finance as Return on Invested Capital or ROIC) is a financial metric used to measure how
well a company uses the money it has invested to generate profits.
In simple terms, it answers the question: “For every dollar put into the business, how much profit is the company actually
generating?”
HOW IT WORKS
* The Goal: Businesses need funding (from shareholders buying stock or from banks providing loans) to buy equipment, build
factories, or run operations. Return on capital looks at how efficiently management turns that pool of money into actual
returns.
* The Formula: While there are a few variations (like ROIC or ROCE), the basic calculation divides a company’s profit by its
total invested capital:
Return on Capital=Operating Profit (or NOPAT)Total Capital Invested\text{Return on Capital} = \frac{\text{Operating Profit (or
NOPAT)}}{\text{Total Capital Invested}}Return on Capital=Total Capital InvestedOperating Profit (or NOPAT)
WHY IT MATTERS
* Efficiency Indicator: A high return on capital suggests a company has a strong competitive advantage and efficient management.
A low return means the company is struggling to make its investments worthwhile.
* Comparing Companies: Investors use it to compare different companies within the same industry to see which one uses its money
more wisely.
YOU ASKED:
YOU SAID IN FACT, THE RETURN ON THE CAPITAL IS THE CORE POSTULATE OF CAPITALISM
in fact, the return on the capital is the core postulate of capitalism
GEMINI REPLIED:
GEMINI SAID
That is a profound way to look at it, and from an economic and philosophical standpoint, you’ve hit on a central pillar of how
market economies operate.
At its core, capitalism relies on the premise that capital—whether it is money, machinery, land, or technology—should be directed
toward uses that generate a surplus, or a return. This dynamic drives several key aspects of the system:
* Incentive to Invest: The expectation of a return on capital is what motivates individuals, entrepreneurs, and institutions to
take risks, fund new businesses, and build infrastructure. Without that potential return, capital would largely stay idle.
* Resource Allocation: In theory, capital flows toward the most efficient and innovative sectors because those are the areas
expected to yield the highest returns. This mechanism helps economies adapt and grow over time.
* Reinvestment and Growth: The profits generated from capital are frequently reinvested, fueling a continuous cycle of industrial
expansion, technological advancement, and wealth creation.
At the same time, because the return on capital is such a powerful engine, it has also been the subject of extensive economic
debate—particularly regarding how the rewards of that capital are distributed relative to labor and wages, and how to maintain a
balance between market efficiency and broad economic stability.
YOU ASKED:
YOU SAID SO, RETURN ON THE CAPITAL HAS TO PRODUCE REVENUE, EFFICIENCY AND MAKE THE ENVIRONMENT FIT TO COMPETE
so, return on the capital has to produce revenue, efficiency and make the environment fit to compete
GEMINI REPLIED:
GEMINI SAID
That is a sharp synthesis. You are describing how the pursuit of a return on capital forces companies and economies to
continuously evolve.
When capital is deployed under competitive pressure, it operates across those three dimensions:
* Producing Revenue: Capital must first prove its worth by generating cash flow and top-line growth. Without revenue, the initial
investment is lost, and the business cannot survive.
* Driving Efficiency: Competition means that capital cannot afford to be wasteful. To maximize returns, companies must constantly
optimize their supply chains, automate repetitive tasks, reduce overhead, and innovate better ways to use their resources.
* Shaping a Competitive Environment: Because returns attract other market players, companies are forced into a relentless race.
Improving efficiency and revenue isn’t just about staying profitable—it is about keeping pace with rivals, raising the bar for
the entire industry, and adapting to changing market landscapes.
In essence, the demand for a return acts as a natural selection pressure in the economy, rewarding adaptability and punishing
stagnation.
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AND HERE COMES THE BAD, UGLY AND STUPID….
After we have seen That return on capital is the Cup, the system core, lets see what about the people living in a Capitalist State.
Lets do it right. SO, FORGET ABOUT LEFT OR RIGHT POLITICS, FORGET ABOUT CUP BEING HALF EMPTY OR HALF FULL.
Witchdoctor will use the same names- terminology the capitalist use and what their mind controllers do with words. We the people living in a Capitalist State are the HUMAN Capital. We the Human Capital have to produce the return on capital, to be efficient, make no waste lands, and make our social environment fit. We the human capital have to produce revenue.
SO WTF is then going on? In order to be fully operative human capital producers we need some simple things: Education, for all, so all will be fit and efficient, Health care for all so all will be fit for work and live a good life, housing for all to be prepared, healthy, fit for work and pensions big enough to be fit so we can SPEND In the Capitalist economy!!!!!
How come then that the bad, ugly and stupid rulers deny all this simple facts and even send the police or army to fight this demands. Like education, which should be the minimum for a fit, healthy happy society in order to be the best Human capital in order to make Capitalism – the return on Capital highly productive, efficient and healthy?
Why the overall costs on Human Capital are destroyed by not providing the core elements of we the people to be fit for a Capitalist system or any market
economy?
The WELFARE OF THE PEOPLE is the boundary condition of the Capitalism to prosper. Only in this way the Return on capital can be spread evenly enough and grow like a tide for all.
It was the famous middle class which was once upon the time growing and making the economy boom. Economy booming with a huge middle class are the core elements of the Return of the Capital growth.
THIS is gone. The Bad , Ugly and Stupid changed the game. Instead of broadening the base of the people who in turn make the human capital who in turn produce the Return of the Capital, the system made a U turn. OK, it was intrinsic in the system to do so, the cup was a bluff, it was made to break, etc, the capitalism drunk all water in it. BUT. BUT.
First, if the return of the capital is the capitalism so are the people. The Mindblowers made a fire walled distinction , they manipulated in dividing this two actors- the human capital and the companies return on capital. By any means , especially by words and sweet talk. They took from the Human Capital – us- the conditions to be fully operative and have let the private companies eat all the cream. They brainwashed us.
Instead they made two moves, and now the third move is coming; they made us debt payers, especially the made us slaves of the State debt. Second, they made the trick of AUSTERITY: in order to pay the State debt, they took away decent health, housing, wages, pensions away. They slowly crushed the famous human capital by eliminating the basic requirements, conditions, terms and PREREQUISITES WHICH CONSTITUTE THE HUMAN CAPITAL.
They said it was and is for the greater good somewhere over the rainbow.
IN FACT THEY DITCHED US. THEY DO NOT NEED US ANYMORE. They moved in the cloud capitalism of finances making finances for the few. The robotics, automation did the rest. THE AI will finish the job for at least 40% of humans. soon. Not that the situation will improve, it will tear the human capital to shreds. They sweet talk, they pour water just for cooking slowly the frog by slowly raising the temperature so we do not notice it suddenly.
The Fourth factor they are thinking of, how to reduce the population- the not needed human capital- is war or some new virus or both. This is the creative destruction as the economist love to call it. It is a chain of factors.
This neoliberalism which killed the classic Capitalism is highly Entropic, it tears the order of society and makes the ultimate disorder, as you have read in the last posts about data centers and nuclear plants. It looks orderly but it is a total disorder, because it does not needs people- the human capital- at all,. The Human Capital distribution makes the low entropy of a society, all the rest is a road to hell.
The famous Spending= Income minus savings, that is nobody concern of the bad ugly and stupid.
THE EUROPEAN ENTROPY TRAP
so, if the State debt is 100% and the interest on debt is 4% it means two things, the country has to grow more than 4% in order to stay even. Nobody except China does. If the debt is 50% the county has to grow 2% to stay even, nobody does even this! If the county debt is 150% the county has to grow 6% A YEAR! Nobody there . So, to pay this stuff one has to ; lower the wages, no health no pension or be more productive. But if you are more productive in this situation, who buys the stuff if everybody is getting less? More productive means less people involved. In some years the famous Human Capital is gone, there is no return on it and the result is we have lost all. If one adds 5% inflation it means 5% less of wages, pensions, if the income does not keeps up with inflation. On the other hand, it means 5% more taxes and this lowers the debt but again we loose double! To lower the taxes on petrol means that less taxes is less health less pensions, and here we have literally hit the limits of growth- no supply.
If the petrol is scarce it means we are witnessing the limits of growth. So, the loop of the vicious circle enfolds in front of our eyes. Growth also leads to the limits of the given, like petrol, OK we shift into electric, but the current European union is far worse: austerity and no investment into electric. What do you need more? As the EU States are highly indebted, the investment is not possible so, no petrol, no electric no health no wages no pension, etc NO EDUCATION. Who the fuck needs us anymore!
The current result is a drive to every man- State- for himself, which is the last entropy and coming disorder in a few years time.
The intermediate answer to all this was , as Witchdoctor wrote here years ago, which already means it is very late in the night this night, the common lender of the last resort – the ECB- and common Treasury for the whole Europe. It is currently going the opposite ways, big time. So, we expect disbandment and the final entropy.
The only solution is the debt free money. Positive money approach; direct financing of the State with money out of the central bank to the treasury for spending in a new system model. Yes, inflation is possible if the State gives away too much money not covered with productive capacity dynamics of any sort which is making people employable, but , ha, what about this inflation now? Better having money and inflation than no money with inflation. Anyway this over financing is easy to control. If not, it is not only the bad, ugly, but it is also STUPID.
We need to ask OK, Witchdoctor is having a rhetorical moment, why the BIG TECH is getting trillions of money out of thin air and we, the Human Capital are not getting only a fraction of such amount for a decent living. Limits of growth permitted.