Blockage in capitalism

Any capitalist activity involves the obtaining of a profit. What does the capitalist do with the profit? A part of the profit is used for his own necessities and the biggest part is used for re-investments in order to grow production, sales and of course, the profit. What does he do with the increased profit? He repeats the above cycle. All goods and services include in their price the profit margin rates (besides many other costs). The profit margin rate can be bigger or lesser, depending on the circumstances.

Most of the buyers of the final products are employees who obviously, use their salary to buy these goods (the same salary), so a part of the products will be unsold. Who can buy these unsold products? Of course, the capitalist who increased his profit! But, as we have seen above, the capitalist use the biggest part of the profit for new investments (new equipment, raw materials etc). He is a human been and he eats with one mouth, only. He will never buy one million breads, because he can’t eat them; he will always buy one bread. That’s why the blockage appear.

There is not such a blockage in feudalism. The cobbler made as many boots as he was ordered and paid, the baker did the same, etc. Of course, the topic is not that simple but this is the rationale of the blockage in capitalism. Very logical and understandable!

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