If capitalism is supposed to lower prices then why are they going up?

The main driver is growing profit. More profit is better. All the profit is not enough.
Lowering prices is directly opposed to that goal.
Capitalist evangelists will tell you that competition will drive down prices.
But that is why companies hate competition. Competiton means lower profit. So it is in their best interest to destroy the competition. Either to first price them out of the market and jacking up prices afterwards, or buying them outright and then shutting them down or rebranding them.

Capitalism easily slides off the rails when we let it. Companies can’t jack up prices indefinitely though. At some point consumers revolt. McDonalds is facing this right now.

Capitalism is NOT supposed to lower prices.

It is to provide open and free markets so that goods can bought and sold freely without the involvement or control of the government.

Sometimes, based on laws of supply and demand, the free market causes goods to be sold more cheaply. Sometimes, because of supply and demand, things are more expensive. That is purely and simply a function of what people are willing to pay for items.

Where did you learn that capitalism was supposed to make things cheaper? They were wrong.

Sometimes price gouging causes prices to rise or to remain the same (as opposed to going down), for example, the price of soda, which has gone up and corporate execs have admitted that as long as people will pay that price, they will keep it inflated. If I’m not mistaken, soda sales have dropped as a result of the prices remaining high.

@elbanditoroso I heard that on CommonSenseSoapBox on YouTube. Sorry that I don’t have a link. There are about 100 or more video’s.

Inflation. Capitalism won’t/can’t change it.

Again…youtube channels are personal. As long as you don’t break youtube’s rules, you can say anything. Saying something 1,000 times doesn’t make it true. Politicians are a great example.

Capitalism raises prices to whatever sellers can get, especially when large corporations dominate markets.

With greater and greater wealth disparity, the situation gets worse and worse, because the prices are more often set to what the wealthy people can pay for things.

Others get left behind and blamed for not having enough jobs.

@all Sorry I thought that capitalism was centered on competition, to lower prices.

@RedDeerGuy1 No, it’s to glorify capital, and generally makes rich people/companies richer . . . and the more extreme it gets, the more everyone/everything else suffers.

Because no matter how much money a company is making, if it’s central purpose is to always make MORE money, that means doing whatever is imaginable that’s expected to make more money.

Hey, we’re rich now, but if we raise prices to the maximum we think we can get we’ll make more.

Hey, if we lower what we’re paying our workers, we can make more!

Hey, if we just dump our toxic waste in that river, we can save a lot on waste disposal!

Isn’t that illegal?

Not if we control the government and eradicate the laws and/or the enforcement!

Great, keep thinking! We need more!

When do we have more than enough, so we stop needing more?

Never! More more more!

@Zaku Wow! Just Wow! I didn’t know.

Glad to help.

The competition aspect in theory can lower prices, but when a few huge companies dominate a market or organize to cooperate, they can profiteer by agreeing to squeeze that out.

Deflation comes with a collapse in aggregate demand and debt deleveraging, like in the 1930s, and more recently in the 2007/8 crash.

Capitalism needs inflation, because inflation is an incentive to spend, and spending is primarily how the strength of an economy is measured.

This is obviously at odds with any notion of long-term sustainability, and ignores long-term negative externalities related to ecology and climate.

Capitalism will, if left alone, regulate the prices. It is when outside influences kick in that things go sideways. Government stepping in to “help” usually ends up with a whole lot of debt being added to the national debt. This makes the dollar worth less. Inflation goes crazy and suddenly we are seeing prices going up. Likewise, if companies get together like a cabal to raise prices across the board for a given goods or service, it is an outside influence that will rock the boat and cause prices to go up.

The common problem with all economic theories is human greed.

@seawulf575 “Capitalism will, if left alone, regulate the prices. It is when outside influences kick in that things go sideways.”

This is economic fantasy fiction and completely ahistorical.

Check out the Gilded Age and “Robber Barrons” to understand why we invented regulation on capitalism to prevent things like child labor, the company store, and violent union busting by hired goon squads.

@Zaku‘s response wasn’t hypothetical, these things really happened. It’s how socialism was invented.

@gorillapaws Yep, hence the last statement “The common problem with all economic theories is human greed.” You didn’t really correct anything. Every example you just gave is an outside influence impacting Capitalism. Pure Democracy is a fiction. Pure Socialism or Capitalism are fantasies. Pure communism is a fantasy. They all fail because of greed. My answer was to the original question and is in line with what @Zaku listed…all examples of greed.

Capitalism often will push to see what the market will bear. If the consumer stops buying, prices will come down if there is room in the price to still make a profit.

Competition to lower prices only works if there is competition in the market pricing lower.

If people are paying the higher prices sometimes companies raise their price to get the higher price the competitor is getting.

There can be gouging, collusion, all sorts of things to take advantage of the consumer. It’s ilegal in the US, but cases are slow to be prosecuted if at all.

“Capitalism will, if left alone, regulate the prices.”

@seawulf575

What exactly does it mean to leave capitalism alone? Capitalism rests on a specific system of property norms that only exist because of state force and a legal framework. Are you suggesting capitalism can exist, let alone “regulate prices”, without our so-called “private property”?

“Government stepping in to “help” usually ends up with a whole lot of debt being added to the national debt”

What do you mean by help in this context? Subsidies? Government contracts? Maybe educating almost the entire population so they can become effective wage labourers for capitalists to employ? The infrastructure that lets capitalists have businesses at all? What has that got to do with “national debt”, which is basically just the accumulated sale of treasury bonds and a safe investment vehicle for the private sector?

” if companies get together like a cabal to raise prices across the board for a given goods or service, it is an outside influence that will rock the boat and cause prices to go up.”

So capitalists cooperating is an outside influence? How exactly do you prevent cooperation between humans who evolved to effectively communicate, exchange information, and cooperate in various contexts?

How does capitalism look without any “outside influence”, whatever that even means?

@Kropotkin Leaving capitalism alone means just that. Capitalism is the belief that private ownership, entrepreneurship, free markets, and profit motive are the drivers. Please note that nowhere in that list does government regulation, subsidy, preferential treatment, or bail outs come into play.

I recognize you are a mouthpiece for the Marxists, but bigger government means less efficiency, more corruption, more waste/fraud/abuse, and higher taxes and national debt. It is a fact of history that this is true. With true capitalism, if I opened a store, I’d decide what I wanted to sell, how much of it I’d order, what I’d charge for it, etc. (private ownership) If you opened a competing store up the street, we’d be competing for the same dollars (competition and profit motive). But you’d be completely allowed to open that store (free markets). We’d likely do several things to see if we could get a larger share of the market like lowering prices a little or offering better service or come up with some way for people to get our products more easily (entrepreneurship). But it would be up to us to decide what works best for our businesses. If I drop the price on a widget by $1, I might attract more buyers from your store if they are looking for widgets. If you see your widgets are selling you could either lower your prices or just hold on until I feel it necessary to raise prices again or you could decide to stop selling widgets. That is how capitalism works in its purest form.

But when the government steps in, let’s say I’m a minority owner and you are not. But the government decides they want to encourage more minority businesses to open. I could be open to subsidies or grants that you would not be eligible for. So now the capitalism is no longer pure. Suddenly I have more cash coming in artificially. That would put a larger strain on you and possibly drive you out of business. So now I’m the only store in town. So I can now raise my prices ridiculously high because people have nowhere else to go to get my products. That change would continue until the next person decides to open a store to challenge me. But it was the interference from government that skewed that balance. And the money they skewed it with was from tax dollars. So either taxes have to go up, they take money away from other service, or they start deficit spending. Any of those further skew things since it either raises inflation or taxes, making the dollars worth less which makes prices go up.

But all this is geared around human greed. If two or three businesses realize they have no competition they get together and agree to inflate their prices just to make more money. Governments step in because the elected leaders see monetary benefits either through graft and corruption or from giving away favors to keep getting re-election money.

@seawulf575 There is good and bad in capitalism, to make it seem like it is some sort of perfect system that always in the end benefits the consumer is just not true. There is not always competition in a market. Not all companies play by the golden rule and charge customers what they would want to pay for an item. Collusion does exist. Gouging does exist. I agree that sometimes the government interfering can backfire, but sometimes the government steps in and it is warranted and better for society.

I consider myself to be a capitalist, and pro capitalism, but there needs to be constraints, because unfortunately not everyone plays the game with integrity. The laws should be what people within a society would deem as doing business with integrity to begin with. That means, the companies with integrity aren’t affected by those laws, because they are never in the realm of going over that line to begin with.

I think Louis Rossman said it best when he talked about companies that lock you into subscriptions and make it nigh impossible to cancel them.
And I think it applies to capitalism in general.
Companies have a rapist mentality.
To them, you are not a customer, and your money is not something they need to earn.
No, to them, your money is actually their money all along, and you are an obstacle between them and the money. This is capitalism manifest. Succulent chinese meal.

There has to be restraints placed on Capitalism, because why invest in any form of waste management when you can just dump it in the nearest river,lake or ocean.
or safety measurements heck when an employee gets injured fire them and hire a new one.
And no Capitalism will NOT regulate itself on those issues because they cost money with no profit return and that is bad.

What is the “invisible hand of the free market” if not a god?

@JLeslie Where did I say Capitalism was a perfect system? I never said that once. The exact opposite, in fact. It is flawed by greed, just like everything else. And in theory I agree there need to be guard rails. But the problem is that even those guard rails are not perfect. They are flawed and open to be abused. I agree that not letting corporations pollute the waterways is a great idea. But when you say that, you picture some evil corporation just pumping pollution into the water or the air to make a couple extra dollars. And that used to happen back in the day. But what that statement does not say is “what is a corporation?” or “What is a pollutant?” or “What waterway?” or “What are acceptable levels?” or even “Who gets to decide and what criteria are they using?” And those are the guard rail weak points. Definitions that do not exist need to be created. And once created, they get changed again and again and again. Everyone on the left raves about how great Obama’s clean water act was. They got furious with Trump for rolling it back. But let’s look at that for a moment. That clean water act wasn’t a law. It was an EPA rule, created by non-elected bureaucrats. The rule redefined what surface waters was. Did you know that you likely have surface water somewhere on your property as defined by that rule? Hell, if you have a ditch by your house, that was considered an affected waterway and you would be responsible for ensuring it meets all the rules of the EPA. Also it redefined what were “waters of the US” to be just about any water, anywhere, was now the property of the US…not private owners, not states but the US. So the rule (The Clean Water Act of 1972) is suddenly being basically amended without due process to allow the US government to own a big chunk of the US.

So the problem remains the same. Someone wants more power or more money or more control and the whole thing becomes a mess it was not intended to be.

Everyone knows prices are determined by the cosmos and Natural Law. I just saw an article in the WSJ that said Kamala’s plan to lower prices will fail, and Trump’s plan to lower prices will also fail. Apparently there is just no way to lower prices. It depends on the will of the universe. Inflation is like the winds or the tides—completely beyond human control. :)