Capitalism Defined
Capitalism: An economic system characterized by private or corporate ownership of capital (valued) goods,
by investments that are determined by private decision, and by prices, production, and the distribution of
goods that are determined mainly by competition in a free market.
Capitalism is also the economic system most closely related to the natural state of man; corrupt.
Capitalism is all about things. People need things to exist (food, water, shelter, etc) Few people have all
the things they need at any given moment or in the correct amount that they need them. You may have
flour, butter, and sugar but no eggs. So you trade some of what you have for what you need. And you
make a cake. You trade what you have or what you can do for what you need or what you can’t do. That
is capitalism at its simplest state. The bargaining process that occurs between two parties in order to
come to an agreement and exchange is voluntary. The value of the items in the system is based on the
need for them. The more there is, the easier it is to get, the less valuable they are. With the opposite
being true also… The less there is or the harder to get or do the more valuable it is. It is also important to
remember that even if it is scare and hard to get it has no value if it is not wanted. Eagle poop for instance
might be scare and hard to get but who wants eagle poop? These are the concepts of supply and
demand and together with the process of trading; they make up the market. In modern times we have
created a common denominator in currency. So you don’t trade beans for boots. You trade everything for
money and then trade money for everything.
This system exists in every culture and everywhere around the world and at every period of time in some
form or another. Communism, socialism, and other economic system are just capitalism with more artificial
and or authoritarian controls applied to the various aspects of the system. In the same way I understand
that the natural state of man is free I also understand that the natural state of economy is free. In the
same way I recognize that the natural state of man is corrupt I understand that the natural state of
economy is corrupt. This is why I am rarely surprised when I hear about people like Bernie Madoff, or
about companies like Enron, or situations like the mortgage industry clasps. I am only puzzled by how
many people are surprised by these things.
People are involved so any system is going to be screwed up because people are screwed up. And
people are screwed up for any number of the reasons I hope to be highlighting in this book and for
numerous other reasons that I could not fit into this volume. The brutal truth is this: Capitalism is brutal,
and unfair… it is also the best system out there. It does not provide equality of out come but it can at best
provide equality of opportunity and at least it provides some sort of chance to get by and possibly get
ahead. In capitalism it is all on you.
The Point:
Capitalism is the natural state of man.
The Lesson to Learn:
Capitalism live it, learn it, love it… It is the means by which you can get the ends you desire.
The Brutal Truth:
Capitalism is hard but it’s the best thing going.