Aye Zeynep Yksek

1858877

SIMILARITIES BETWEEN CAPITALIST STATE OF PAST AND TODAY

The way of raising money of capitalist states observed in Venetian government in the 14-16th
centuries and the AIG Bailout about financial crisis of 2008.Capitalist states depend on rich
people or institutions.They need them in order to raise money for war expenditure, or staying
strong, etc.The only unchangeable thing here is that the governments want rich to stay rich to
provide money from them.There are many examples of these system in history and still
today.Generally, taxation is a mechanism which services this purposes everytime.

Venetian government raises money and its goal of gaining funds is to finance wars in the 15th
century.It takes money from rich and gives guarantee to reinforce the wealth of them regardless
whether they win the war or not. It improves three different theoretical models to make it possible.
In model A, they win the war and pay back with revenues. In model B, they repay with regressive
taxes and in model C, they achieves to pay it with income taxes. Practically, the examples for the
models can be seen in the time of before 1260, after Genoese competition, and in 1482,
respectively (Lane, 1979: 72-75).

In the case of the AIG Bailout,the government saves an insurance company from its debts in order
to keep it strong and continue capitalist economical system.The state related in the process of
funding a company that is in trouble in return for stakes and interest profits with the resources
coming from taxpayers. If it makes profit or not, the cost of rescuing a big company, which has
always been exploitating proleterians, was spread over taxpayers by the US Federal Reserve
because of too big is too fail.In additon,after the crisis came to the fore, the executives of the
company either have gone with their billions of dollars worth of individual wealths or they were

reappointed at official positions of the US goverment or in some other companies of the financial
industry. (The Wall Street Journal, March 2, 2009: 1).

Both governments make it in favor of continuing capitalism.Furthermore,achieve to do it by using

taxes which arecollected from both rich and poor but have a bigger impact on poor ones. These
moves keep rich as the same, even make them richer, but poor becomer poorer.The other side, the
main difference between the Venetian and the US governments is the cause of raising money. The
one tries to find money for war expenditure while the other one does it in order to rescue a firm
from the debt crisis. The second difference between them is that the one uses taxes in order to
save government, unlikely the other one uses them favoring to fund a big firm.

Note that one of the impotant similarity of the two cases, who loses are always poors. The
mechanism of both cases is the same. They collect taxes from everyone.
Then, they use them in favor of staying strong. As capitalist states, it means
having rich people or companies. In other words, their main goal is protect
rich. Holding rich advantageous in all scenarios is a result of being capitalist
states. To conclude, a way can be found to keep capitalism and rich in the
game and the system makes it easy throughout history from past to day

REFERENCES

Lane, F. C. (1979). Public debt and private wealth: particularly in 16th

century Venice. Profits from power: readings in protection rent and violencecontrollingenterprises (pp. 72-81). New York, US: State University of New York Press.

Solomon, D. (2009, March 2). US adds funding for AIG bailout. Wall Street Journal, 1, 28.