Today’s news – oil is trading at negative numbers. Not even sure how that happens. Reporter’s analogy – it’s like Starbucks made too much coffee and they are paying you to take it away. Sure.

What this shows,  is how fragile are the truths of Capitalism – the lies we have told ourselves.

Basic premise is that a free market ensures money – capital – will flow to where it can be used most effectively. In its simplest form that makes perfect sense.

If you have money but you’re cold and I make blankets – you will buy blankets. Capital will flow to blanket makers to support the industry. I will keep making blankets and making money (and return money to my investors) until no one wants blankets. Then, the blanket industry will contract or collapse. And capital will move to support the next need.

But it’s not simple. Huge investments are less mobile than they should be. They are too clumsy to shift from blankets to the new need. And to make things worse, we have created artificial needs.  We have a surprising inability to differentiate between need and want – and the market masters play to this exceedingly well.

Free markets are not free. They are constrained by regulations. Governments artificially protect sectors – too big to fail. The game is rigged.

The edges are fraying.

What is the significance of negative oil prices? If we have faith in the market we should think it is a correction and the system works. But listen to the the cry from those who just now realize they made the wrong bet. Protect us! Prevent the collapse of our industry. Save my fortune!

Industries contract and collapse. Jobs disappear. People move on. Capital takes its loss, licks its wounds and moves on. Society survives. And there are casualties. But if you believe in capitalism you let it unfold.

And if you also have a socialist side – you support the people who suffer.