- Aug 3, 2015
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It is called the contradiction between the socialised nature of modern production and the private ownership of the productive forces. This leads to the fact that under capitalism mankind regularly suffers economic and social catastrophes that he cannot control, despite the fact that the economy is man's own creation.FTFY.
A business that has become successful enough to sustain itself needs to continue growing; you're in constant competition with everyone else. You grow or you shrink, and survival is predicated on growing; staying put or becoming comfortable is a guaranteed way eventually to fail. Once you've grown enough, monopoly is inevitable because there reaches a point in which the only way to continue growing is to dominate yours and other markets; businesses either figure this out and become global businesses, or they peter out after a period of successes and are consumed by smaller enterprises.
The initial cost/risk of a business is borne by the business owner, but go beyond subsistence and you'll find social networks built around successful enterprises, communities and networks built completely from that business. Other businesses will crop up, connected to your successful enterprise, and those businesses will be impacted when/if you fail; they must find other enterprises to lean on or work with. Diversification is important, but...
All of this is to say that when your business fails, if you are beyond the initial stages in which that failure only affects you - the capitalist - your failure influences that network around you. Other businesses succeed or fail due to you; families and other businesses need seek alternative supply chains, need diversify their sources for the products/services they get from you, and diversification is something that can be done much more easily at scale than in minutae. A family only needs one fridge; a franchise of butchers needs a good deal more. That family is hit a lot harder when their fridge breaks if the place they got it is no longer there.
Imagine if you will Amazon went under. Suddenly, that's a series of supply networks and businesses that would be completely ****ed; unable to actually do their own business. There would be families that starve due to Amazon's failure, entire economic sections that suffer due to it.
While Amazon's failure would absolutely affect Jeff Bezos, the damage would certainly not be limited to him and while he would lose a lot of money he'd still be pretty well off due to the ability wealth brings to diversify. Those who rely on Amazon have no such luxury.
Thus, capital takes initial risk and reaps initial and ongoing reward, but when an enterprise fails the damage is as broad as its reach at its apex.