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.