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What constitutes a true act of capitalism?

Posted by krevello 7 years, 1 month ago to Economics
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Today, all economic interactions within the United States are described as "capitalistic." Since there are rampant economic issues, this is used as proof that free markets do not work. Given how intrusive regulation is, this is obviously a fallacious claim. But, even where there is no regulation, are all free market actions truly "capitalism"? If capitalism is an exercising of free will, an expression of a consumer recognizing the merit of a product and endorsing it through their purchasing power, then do those who simply purchase goods based on the price or because they are "convenient" engage in capitalism?


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  • Posted by rbroberg 7 years, 1 month ago
    The Liberal strategy:
    1. Claim the free market doesn't work.
    2. Do absolutely everything they can to destroy the free market.
    3. Say "See? We told you the free market doesn't work!"
    4. Blame Capitalists.
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    • Posted by blackswan 7 years ago
      The problem is that the capitalists are quiet in the face of these falsehoods. They're like sheep going to the slaughter, bleating all the way. Just look at the banks and the 2008 meltdown.
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      • Posted by $ jdg 7 years ago
        No, the problem is that cronyist groups such as the chambers of commerce proudly claim to represent capitalism, and the media take them at their word.
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  • Posted by $ CBJ 7 years, 1 month ago
    If the exchange is voluntary on both sides then it is an act of capitalism. The specific motives of the parties to the transaction are irrelevant. Price and convenience are simply examples of legitimate reasons why someone might want to buy or sell a good or service. There are many others, such as durability, strength and aesthetic appeal.
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  • Posted by mgarbizo1 7 years, 1 month ago
    in capitalism, the why doesn't matter, in true capitalism, no one is forced against their will to either sell a good or buy a good, as you pointed out its an act of free will to trade value for value, and everyone that does this, does so as a willful act of self sustaining and self interest with their life as the means to their own ends.
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  • Posted by LibertyBelle 7 years ago
    I suppose so; but people also purchase things for
    other reasons. For instance, a person may hang
    around a particular store because he enjoys the
    company of the storekeeper and other customers
    who come there, and possibly there is a TV set on which the people watch programs (or sports
    shows). (Historically, I believe there were
    instances of a checkerboard and cider, etc.)
    Is that a point against capitalism? Not at all.
    I say we should have freedom. In which case,
    the capitalist system would also flourish.
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  • Posted by giallopudding 7 years, 1 month ago
    The roots of the word "capitalism" illustrate why it is not a good word to use when speaking of free, voluntary trade. The word was first used by a French socialist/anarchist named Pierre-Joseph Proudhon in generally describing an economic system which socialists opposed.

    I think you are correct in noting that the problem is in definitions, with the socialistic crowd labeling certain economic interactions "capitalistic" when they clearly are anything but in the eyes of free market advocates. What the left often fails to do is differentiate between free market, voluntary trade (what we are forced to call capitalism for lack of alternative word), and government collusion with business, or what many have labeled "crony capitalism."

    Governments that confiscate wealth from citizens and redistribute it to certain businesses, directly via subsidies, or indirectly via tariffs on competing companies, that is immoral and corrupt. Unfortunately, a large number of people have been brainwashed by leftist media, academia and Hollywood into thinking crony capitalism also called (interventionism, favoritism, mercantilism) is what is meant by "capitalism."

    What we need is a better word to represent free, voluntary trade. Until then, we might as well be using "crapitalism," as the current descriptor.
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  • Posted by $ blarman 7 years, 1 month ago
    True capitalism is a value-for-value exchange unfettered by impositions from third parties (like government or health insurance). In a capitalistic society, you bear the full costs of your purchase and get to enjoy the full benefits as well.
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  • Posted by DeanStriker 7 years ago
    the word Capitalism as defined by dictionary.com...
    "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."
    Beyond that I think it comes from "to capitalize", on anything one might have and seek to profit from.
    The Rulers prefer to shade it sinful, and an excuse to screw with the natural Free Market.
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  • Posted by Herb7734 7 years, 1 month ago
    You betcher bippy.(Rowan & Martin). Any action of exchange of services or product for money or services is capitalism. I would bet there are hundreds of distortions of this simple fact, The only "types" of capitalism are a social system and a financial system. The financial system is based on the social system which is based on "the recognition of individual rights, including property rights in which all property is privately owned."
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  • Posted by mspalding 7 years, 1 month ago
    Lasik is a good example. It avoided all the healthcare regs and subsidies. As a result it has become cheaper and much better. Unlike the rest of healthcare. Cell phones could be another example of what happens when you have relatively unfettered capitalism.
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  • Posted by $ MikeMarotta 7 years, 1 month ago
    The first three comments from mgarbizo, CBJ,and blarman are all true. Allow me to suggest, though, that there may be a better understanding. If we differentiate the "free market" from "capitalism" then those comments describe a "free market." To me, "capitalism" is the economic system of investment in enterprise. Those words "investment" and "enterprise" have objective meanings.

    Markets have existed for perhaps 8000 years. But realize that they are not "natural" to all peoples. Even today, people who do not associate with market economies have a different mental framework from those who do. (See "The Weirdest People in the World" here: http://www2.psych.ubc.ca/~henrich/pdf... ) In the Anabasis ("Journey Up Country") by Xenophon, at one point, the Greek soldiers are short on provisions and they ask a village to set up a market so that they can buy foodstuffs with coins, but the villagers are unable to understand what the Greeks want.

    Even so, for thousands of years Sumerians, Persians, Greeks, Romans, Chinese, and Indians, did indeed buy and sell, make purchases, make choices. But their societies were not capitalistic.

    Some libertarians dislike the word "capitalism" because as an ISM, it refers to "the rule of sociey by..." as in feudalism, socialism, fascism, agrarianism, and so on... They prefer a society ruled by no one social group. Fair enough, perhaps...

    But, what is a society "ruled by capitalists"?

    It is not an easy question. That is why Capitalism: the Unknown Ideal runs 24 chapters. We decry "liberal education" but still even in the Gulch people want one-line definitions. Reality is more complicated than that.

    Capitalism depends on people who know reality, use reason, and identify their self-interest, and are able to act on that without interference from a government limited to protecting rights. That kind of society is one that is powered by investment in enterprise. That requires discovery and creation, innovation and invention. Merely buying a sheep instead of a goat is not capitalism. Capitalism was invented in the Age of Reason when the first joint stock companies, beginning with the Dutch East India Company, sold shares of investment. That blossomed in the 19th century with corporations that financed railroads, telegraphs, radios, and electronic components -- and in the 20th century automobiles, aircraft, and computers, delivering to us the world we have today.
    (See "The Art of Finance" here: http://necessaryfacts.blogspot.com/20... and Scripophily here: http://necessaryfacts.blogspot.com/20... )
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    • Posted by $ CBJ 7 years, 1 month ago
      Re: "To me, "capitalism" is the economic system of investment in enterprise." Does your definition still hold if most or all of the "investment in enterprise" is done by the government? Questions like this are why I seldom bring up the word "capitalism" in casual discussions of politics or economics.
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      • Posted by $ MikeMarotta 7 years, 1 month ago
        As much as I dislike him for his intellectual dishonesty, Murray Rothbard did publicize well the dichotomy between Power and Market. He explained cogently that when the government "invests" it does so on the basis of power, not market. Therefore, all government spending is sub-optimal investment, a net loss to the general economy. War is the quintessential example. (I add here on my own that war might be necessary for self-defense, but it remains an economic loss, even if you win.)

        So, on that basis, I assert that it is objectively impossible for the government to invest in enterprise.
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        • Posted by $ CBJ 7 years, 1 month ago
          I would qualify that to say “In a fully free-market capitalist society, the government by definition cannot invest in enterprise.” In a mixed economy, the government can certainly do so, by directly buying shares in an initial public offering of stock. Even though this is a non-free-market transaction, and may be “sub-optimal” for the economy as a whole, it is still an investment within the dictionary definition of that term.
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  • Posted by robinrises 7 years, 1 month ago
    No, it's not true capitalism by your definition. The merits of a product don't get discovered by the consumer because shills are manipulating the real value of goods and its placement in the marketplace using social media channels.
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