cap·i·tal·ism
[kap-i-tl-iz-uhm]
–noun
an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, especially as contrasted to cooperatively or state-owned means of wealth.
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cap·i·tal·ist
[kap-i-tl-ist]
noun
1. a person who has capital, especially extensive capital, invested in business enterprises.
2. an advocate of capitalism.
3. a very wealthy person.
Whenever those of leftist political persuasion think about capitalists they reflexively look at the most negative version of choice number 3 above and with their zero-sum version of economics they have visions of:
- The men pictured on the Monopoly cards.
- Ebenezer Scrooge
- Robber Barons
- Gordon Gecko from the movie “Wall Street”
While there are capitalist overtones to all of the above the leftists are oversimplifying the issues and only looking at the negatives. The political left instinctively feel that the acquisition of wealth is driven by greed and selfishness. True socialists like the current president don’t believe that any sort of economic power should be allowed to be in private hands. Having people that they cannot control making economic decisions is a complete anathema to them but they are completely blind to their own greed and selfishness as explained by Milton Friedman in the video below.
Milton Friedman on Donohue
Back before the industrial revolution there were no factories churning out thousands of consumer products at affordable prices. Things were hand made and thus to buy an item you needed to pay enough for the time taken to make it. If an item took somebody a week to make he had to live during that time and in some cases also provide for his family. Something as simple as a cloth shirt may have been the product of weeks of man hours in total from production of the base fibres, dying, spinning, weaving and finally cutting and sewing. Such simple items cost so much that many people could not afford them and had to make do with leather or other materials which did not take as much labor to produce.
When machines were made that could quickly do the a lot of the work that used to take people a lot longer to perform things became cheaper for everybody. The machines that are used cost money to build and to start a factory required amounts that the average person does not possess. Those with the wealth required invested their capital in the machines and were known as “capitalists”.
The capitalists did not act out of altruism, they saw an opportunity to increase their wealth and took the risk of buying the machinery, hiring people to operate them and building a factory. When Henry Ford expressed his dream of the average person being able to buy a car due to his innovative approach to manufacturing he believed that the mobility he added to the general populace would be beneficial to them but you can also bet that he pictured the Ford logo on the cars in his vision.
This is an example of non-zero-sum economics. Both parties benefit from the transaction. The same sort of transactions are carried out billions of times every day. What the political left really means when they talk about the evils of capitalism is the free market system where people can decide to buy bread from one baker or any other according to their personal preferences and convenience.
When you buy a loaf of bread from the baker you obviously think that you benefit from the deal otherwise you wouldn’t do it. The baker is happy because he makes a little money on the transaction which he can then spend on something he needs more than the money.
Neither you or the baker have so much money that you can have everything you want because the people involved in making. mining or growing goods or performing the services you want also have costs involved and they also need to have enough money to live on. This means that there can never be enough of anything to satisfy everybody in the world. That is called scarcity. Just as diamonds are valuable due to scarcity so is lumber, wheat, oil, clothing and expertise.
The abundance or scarcity of these things determines their prices as the owner will sell for the best price he can get the same way that you do when you sell unneeded items at your garage sale. if you set the prices too high then nobody will buy, too low and everything will be sold quickly but your wallet will be thinner. Wanting to get the best prices for your stuff is what the political left would have you believe is greed and selfishness.
The same applies when you decide to buy a couple of items rather than just one because they are on sale right now or asking for a discount when you buy in bulk. If you get a better job offer and either change employers or ask your present employer for a raise to keep you from going then you are taking advantage of a higher market price for your expertise. In all of these cases the left want you to feel guilty about your self interest.
The political left save their worst rhetoric for businesses that behave exactly the way that you do on a personal level when they sell for the best price they can get or buy raw materials in bulk to keep prices down. The bigger the business the more they demagogue. The political left rants against “capitalism” and sets up the “evil rich” as the target of their hatred. The political left particularly don’t want to use the words “free enterprise” to describe what they are against because that would show their real agenda, which is to abolish freedom.
