Difference between revisions of "Capitalism"

From Conservapedia
Jump to: navigation, search
(→‎Criticism)
(17 intermediate revisions by 8 users not shown)
Line 1: Line 1:
−
{{Stub}}
+
[[Image:Tokyo Stock Exchange.jpg|thumb|Tokyo Stock Exchange]]
 +
'''Capitalism''' is the [[free market]] economic system based on the [[work ethic]], private ownership, [[innovation]] and [[entrepreneurship]]. The investment of capital, and production, distribution, income, and prices are determined not by government (as in [[socialism]]) but through the operation of a competitive market where decisions are voluntary and private rather than regulated and mandated by government (see, e.g., the [[law of supply and demand]]).
  
−
In standard [[Marxist historiography]] '''capitalism''' is the [[mode of production]] that follows [[feudalism]] and precedes [[socialism]].
+
==Overview==
 +
One self-regulating feature of capitalism is competition, which helps maintain fair market value for goods and services.  However, ''unrestrained'' or ''pure'' capitalism may sometimes create a positive feedback loop in which a small number of individual accumulations of capital grow ever larger, eventually becoming so few as to limit effective competition, thus ceasing to strictly be free-market capitalism.  In this regard, pure capitalism is unstable.  Modern political systems have developed regulation mechanisms in an attempt to render capitalism more stable, including [[anti-trust]] regulation, trade [[tariff]]s, etc.
  
−
Capitalism is characterized by:
+
Since the fall of [[communism]], and the advent of information technology, capitalism is becoming increasingly widespread.
−
* factory production
+
−
* money exchange
+
−
* private ownership
+
−
* wage-labor
+
−
* profit-making
+
−
* production for exchange (commodities)
+
  
−
Capitalists realize that the market is inefficient and chaotic, and will try to form somewhat of a planned economy amongst themselves. For instance, in 2012 Barclays, UBS, Citibank, the Royal Bank of Scotland, Deutsche Bank, and JP Morgan, were all found to have fixed interest rates to make bigger profits. Another example is British Airways and Virgin Atlantic in the airline industry a couple years later; also Grolsch, Bavaria, and Heineken in brewing — Sainsbury’s, Asda and other supermarkets. All these were found to have colluded on prices in order to secure larger profits. The reason for these scandals is because these companies recognize that planning is a more efficient way to run the economy than leaving it to the anarchy of the free market.
+
[[Adam Smith]] described the operation of capital accumulation through the productive powers of labor as such,
 +
{{Cquote|Whatever a person saves from his [[revenue]] he adds to his [[capital]], and either employs it himself in maintaining an additional number of productive hands, or enables some other person to do so, by lending it to him for an interest, that is, for a share of the profits. As the capital of an individual can be increased only by what he saves from his annual revenue or his annual gains, so the capital of a society, which is the same with that of all the individuals who compose it, can be increased only in the same manner.<ref>Adam Smith, ''An Inquiry into the Nature and Causes of the Wealth of Nations'', [http://www.econlib.org/library/Smith/smWN.html Book II, Chapter 3, Paragraph 15,] ''Of the Accumulation of Capital, or of Productive and Unproductive Labour'', First Edition 1776.</ref>}}
  
−
==History==
+
Smith goes on to describe how the productive powers of labor employed by the owner of a capital allow laborers to reproduce with a profit the value of their maintenance, over and above their own consumption, which then allows for an additional set of hands to be employed.<ref>Adam Smith, ''Wealth of Nations'', Book II, Chapter 3, Paragraph 22.</ref>  Smith observes labor is the original purchase price for all the wealth of the world,
−
===The Business Plot===
+
[[Image:Eco Pillars.jpg|right|400px|thumbnail|The [[free enterprise]] system in [[United States of America|America]] before [[liberals]], [[Republican in name only|RINOs]], and/or members of the [[progressive movement]], such as President [[Barack Obama]], eroded America's [[economics|economic]] freedom and prosperity. Former president [[Obamunism|Barack Obama]] created [[National debt of the United States|massive Federal government debt]], which upset the system.]]
−
This is a supposed plot in which American fascists, with whom major industrialists collaborated, planned to overthrow [[FDR]] and make America a dictatorship, in response to the weakness of capitalism and so as to preempt a socialist uprising. The details of this theory are rather murky and evidence is hard to gather, however it does seem that while indeed, a group of people did come together and discuss such a plot, it didn’t develop into anything much more – it is not as serious as some proponents of the theory may claim. Regardless, such a plot certainly was in the way of capitalists, who were anxious of the socialist revolutions occurring abroad and worried that such movements could reach the United States. In history, far-right wing dictatorships are the clear preference of the bourgeoisie to socialism, as is exemplified in the Nazi rise to power, the 1973 Chilean coup d'état, or any other dictatorship supported or established by the United States (as well as the local bourgeoisie) in response to the "domino theory".
+
{{Cquote|The real price of every thing, what every thing really costs to the man who wants to acquire it, is the toil and trouble of acquiring it. What every thing is really worth to the man who has acquired it, and who wants to dispose of it or exchange it for something else, is the toil and trouble which it can save to himself, and which it can impose upon other people. What is bought with money or with goods is purchased by labour, <sup>2</sup><ref>'Everything in the world is purchased by labour.'—Hume, 'Of Commerce,' in Political Discourses, 1752, p. 12</ref> as much as what we acquire by the toil of our own body. That money or those goods indeed save us this toil. They contain the value of a certain quantity of labour which we exchange for what is supposed at the time to contain the value of an equal quantity. Labour was the first price, the original purchase-money that was paid for all things. It was not by gold or by silver, but by labour, that all the wealth of the world was originally purchased; and its value, to those who possess it, and who want to exchange it for some new productions, is precisely equal to the quantity of labour which it can enable them to purchase or command.<ref>Adam Smith, ''An Inquiry into the Nature and Causes of the Wealth of Nations'', [http://www.econlib.org/library/Smith/smWN.html Book I, Chapter 5, Paragraph 2,] ''Of the Real and Nominal Price of Commodities'', First Edition 1776.</ref>}}
  
−
==Capitalism cannot function without a state==
+
Real wealth consists not in money, but in the things money will exchange for,
−
Capitalism requires a state to give it things like bailouts as well as tax money for various purposes, such as for economic stimulus or funding stock buybacks. Furthermore the state has a military and police force — coercion in general, which defends the institution of private property, and with this uses coercion otherwise to maintain the capitalist system. Without the state, capitalism will not recover from the crises inherent to it and eventually give way to a different economic system which may not preserve the previous capitalist class, such as socialism. For this reason, [[anarcho-capitalism]] is unviable as it seeks to remove an aspect to capitalism which realistically is essential to it, thus being dramatically more unstable than regular capitalism.
+
{{Cquote|In order to put industry into motion, three things are requisite; materials to work upon, tools to work with, and the wages or recompense for the sake of which the work is done. Money is neither a material to work upon, nor a tool to work with; and though the wages of the workman are commonly paid to him in money, his real revenue, like that of all other men, consists, not in money, but in the money's worth; not in the metal pieces, but in what can be got for them.<ref>Adam Smith, ''An Inquiry into the Nature and Causes of the Wealth of Nations'', [http://www.econlib.org/library/Smith/smWN7.html Book II, Chapter 2, Paragraph 37,] ''Of Money Considered as a particular Branch of the General Stock of the Society, or of the Expence of Maintaining the National Capital '', First Edition 1776.</ref>}}
  
−
==The wealth and development of capitalist nations as purported proof of the success of capitalism==
+
Since wealth does not consist in money, gold, or silver, and labor is the original purchase price, Smith explains how the capitalist system is then put into motion, complete with natural incentives, only Smith does not use the word "capital" here to describe what is needed. Smith explains how a "store of goods", or "stock sufficient to maintain" the original capitalist entrepreneur is necessary;
−
In the cases of South Korea and Taiwan, the communist example of giving land to those who till it (e.g. when the troops of the DPRK entered the South, the South made concessions by beginning to distribute land to the landless) compelled the Americans to promote land reform in both countries in order to prevent unrest and promote economic growth. Every single impoverished/broken country that became developed under capitalism also has had heavy investments from the US, and in the cases of Japan and South Korea they both had "paternalistic" governments that actively intervened to grow their economies via protectionist measures, consolidation, etc.
+
{{Cquote|When the stock which a man possesses is no more than sufficient to maintain him for a few days or a few weeks, he seldom thinks of deriving any revenue from it. He consumes it as sparingly as he can, and endeavours by his labour to acquire something which may supply its place before it be consumed altogether. His revenue is, in this case, derived from his labour only. This is the state of the greater part of the labouring poor in all countries.  
  
−
To quote Marx in the Manifest of the Communist Party:
+
But when he possesses stock sufficient to maintain him for months or years, he naturally endeavours to derive a revenue from the greater part of it; reserving only so much for his immediate consumption as may maintain him till this revenue begins to come in. His whole stock, therefore, is distinguished into two parts. That part which, he expects, is to afford him this revenue, is called his capital. The other is that which supplies his immediate consumption  <ref>Adam Smith, ''An Inquiry into the Nature and Causes of the Wealth of Nations'', [http://www.econlib.org/library/Smith/smWN7.html Book II, Chapter 1, Paragraphs 1 & 2,] ''Of the Division of Stock  '', First Edition 1776.</ref>}}
−
<blockquote>The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarian, nations into civilisation. The cheap prices of commodities are the heavy artillery with which it batters down all Chinese walls, with which it forces the barbarians’ intensely obstinate hatred of foreigners to capitulate. It compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilisation into their midst, i.e., to become bourgeois themselves. In one word, it creates a world after its own image.</blockquote>
+
−
There's nothing Marx or Lenin wrote that suggests every poor country would remain that way. But it is imperative to note that alongside Japan, South Korea, Taiwan and Singapore are Myanmar, the Philippines, Papua New Guinea, and Malaysia (among others), i.e. countries that clearly aren't considered prosperous by the standards of showpieces like Japan or Singapore.
+
−
Capitalism can't make the whole world prosperous, nor can it eliminate unemployment and the inherent tendency toward economic crises. It can make certain countries prosperous, at the cost of growing contradictions between these countries, the development of imperialism, and the consequent imperialist wars for a redivision of the world's markets.
+
  
−
==On the supposed quality of capitalism to be the most innovative==
+
The [[division of labor]] is the necessary condition that gives rise to the productive powers of labor that allows for large scale economic growth.  By "division of labor", Smith is referring to "specialization of labor", where each worker acquires specific knowledge to apply to a specific task.
−
Plentiful innovation has been observed under every system, including under socialism such as may be seen in the Soviet space program or in Cuban medical advances. Advances have occurred in feudalism as well, where for instance the windmill was developed. Innovation is in no way exclusive to capitalism, and if anything, its particular brand of innovation compels largely the creation of useless trendy garbage that doesn't have much social or economic value and meaning. Though it is true that capitalists have the incentive to outcompete their competitors, this is more trouble than it’s worth given that this inevitably leads to increased exploitation and lesser-quality products made with lots of shortcuts. The vast majority of innovation comes from people who naturally have innovative tendencies that have the means to construct and develop things. Innovation is something innovative people do as a form of expression of their essential selves, which under socialism will be much better off as there will be increased cooperation among people, for instance through the socialization of "intellectual property", on top of a more reasonable distribution of resources. Characteristic of socialism is also universal education, which would further develop genuine innovation, and the removal of the profit motive means that people could create advancements for the good of society rather than the greed of individuals, who will not be so pressured to think about their own essential needs first as they would have been met.
+
{{Cquote|In that rude state of society in which there is no division of labour, in which exchanges are seldom made, and in which every man provides everything for himself, it is not necessary that any stock should be accumulated or stored up beforehand in order to carry on the business of the society. Every man endeavours to supply by his own industry his own occasional wants as they occur. When he is hungry, he goes to the forest to hunt; when his coat is worn out, he clothes himself with the skin of the first large animal he kills: and when his hut begins to go to ruin, he repairs it, as well as he can, with the trees and the turf that are nearest it.
 +
 +
But when the division of labour has once been thoroughly introduced, the produce of a man's own labour can supply but a very small part of his occasional wants. The far greater part of them are supplied by the produce of other men's labour, which he purchases with the produce, or, what is the same thing, with the price of the produce of his own. But this purchase cannot be made till such time as the produce of his own labour has not only been completed, but sold. A stock of goods of different kinds, therefore, must be stored up somewhere sufficient to maintain him, and to supply him with the materials and tools of his work till such time, at least, as both these events can be brought about.  
 +
 +
As the accumulation of stock must, in the nature of things, be previous to the division of labour, ...in order to give constant employment to an equal number of workmen, an equal stock of provisions, and a greater stock of materials and tools than what would have been necessary in a ruder state of things, must be accumulated beforehand.<ref>Adam Smith, ''An Inquiry into the Nature and Causes of the Wealth of Nations'', [http://www.econlib.org/library/Smith/smWN7.html Book II, Introduction, Paragraphs 1, 2, & 3] ''Of the Nature, Accumulation, and Employment of Stock,'', First Edition 1776.</ref>}}
 +
{{Cquote|When the division of labour has been once thoroughly established, it is but a very small part of a man's wants which the produce of his own labour can supply. He supplies the far greater part of them by exchanging that surplus part of the produce of his own labour, which is over and above his own consumption, for such parts of the produce of other men's labour as he has occasion for. Every man thus lives by exchanging, or becomes in some measure a merchant, and the society itself grows to be what is properly a commercial society.<ref>Adam Smith, ''An Inquiry into the Nature and Causes of the Wealth of Nations'', [http://www.econlib.org/library/Smith/smWN7.html Book I, Chapter 4, Paragraphs 1] ''Of the Origin and Use of Money'', First Edition 1776.</ref>}}
  
−
Innovation occurs despite capitalism, not because of it.
+
==Capitalism and Society==
 +
[[Image:Ludwig von Mises.jpg|thumb|100px|Ludwig von Mises]]
 +
Historically, capitalism has fostered freedom and an increase in the standard of living and human rights, and vice versa.  Societies that have tried non-capitalist systems inevitably fall into tyranny.
  
−
==Longevity extension==
+
For example, [[Venezuela]], while not a perfect country before [[Hugo Chavez]], had freedom and wealth unprecedented in its history. As Chavez has nationalized industries, he has also centralized power for himself, becoming a dictator.  
−
There have to be constantly developed new methods and technologies in order to keep capitalism from collapsing for good. However, these tend to eventually get spent up, thus requiring new methods and technologies to either supplant or replace them, and in essence merely delay the collapse of capitalism. Examples of such include:
+
−
*Keynesianism
+
−
*Credit cards
+
−
*Negative interest rates
+
−
*Quantitative easing
+
−
*Stock repurchases
+
−
*Bailouts to financial companies
+
  
−
==Inability to be reformed==
+
Capitalist societies also generally have higher standards of living compared to their non-capitalist counterparts in terms of per capita GDP, education, healthcare, and poverty rates. [[China]], for instance, has been growing extremely prosperous since it began opening its economy to capitalism in the 1980s.
−
No matter how many social safety nets are created, no matter how many regulations are imposed, there will continue to be class struggle between capitalists and workers in a capitalist society — this quality is practically inherent to such. The capitalist ruling class makes use of the bourgeois state to block, diminish, and eventually discard reforms, as incentivized under capitalism.
+
  
−
Social democratic parties sit at the crux of the capitalism versus socialism spectrum and have strong tendencies to break apart towards either of the two. In Europe, during the mid-late 1940s, the social democratic parties developed distinct left-wings and right-wings, wherein those on the right were more so interested in attempting to reform capitalism and defend the existence of the bourgeoisie, while the left-wing social democrats agreed with the socialists that the means of production are to be socialized and a worker’s state be established. Thus the socialist and left-wing social democrats merged into a single party, as had occurred in East Germany, Poland, and Hungary; that, or those kinds of social democrats simply joined the socialist parties, as had been the case in Romania, Bulgaria, and Czechoslovakia. At that time social democratic parties were still Marxist-oriented and explicitly identified themselves with the working class, so merging with or joining the socialists wasn’t a stretch. Of course, the right-wing social democrats triumphed in other areas and dropped any references to Marxism, as the West German SPD had done in 1959, on top of tending to remove any reference in their party line to being a worker's party.
+
However, some capitalist societies also have seen progressively larger gaps between the upper and middle classes develop, such as the United States where the top twenty percent owned eighty-seven percent of the financial wealth and eighty percent of the total wealth, despite having the largest GDP in the world.
  
−
==Wealth taxes==
+
==Defeating Poverty==
−
Wealth taxes, in democracies, are doomed to largely fail, as capitalists are under pressure from shareholders and competitors to continuously increase profits – if the state begins to mandate that a large portion of investments instead go to social programs, many capitalists and businesses will leave the jurisdiction, particularly if they are unaccustomed to wealth taxes like in places such as the United States. Even in social democratic nations like in Europe, their social safety nets are being eroded away as the tendency for the rate of profit to fall digs into welfare benefits. In a planned economy, however, capitalists could largely be convinced/coerced to have their businesses remain in the country through the wide-scale leveraging of synergies available to the state — either that, or the capitalists have their businesses bought out/taken over outright. In any case, a liberal democracy is too decentralized to have a proper grip onto its capitalist class, which rather rules the state if anything.
+
Thanks to Capitalism, billions of people have been able to pull themselves out of poverty. Capitalism has lead to the greatest reduction in human misery.<ref>https://www.prageru.com/video/if-you-hate-poverty-you-should-love-capitalism/</ref> As capitalism provides more opportunities to people, as research has shown that when people earn their way out of poverty it is much more empowering and enduring than being supported by the government.<ref>https://www.prageru.com/video/there-is-only-one-way-out-of-poverty/</ref>
 +
 
 +
==Criticism==
 +
A [[free market]], non-governmental system can pave the way for [[economic]] domination and control by a stateless, undemocratic [[oligarchy]] more powerful than any [[government]]. The [[Davos party]] or [[Epstein Class]], for example.
 +
 
 +
== Quotes ==
 +
 
 +
“Historical evidence speaks with a single voice on the relation between political freedom and a free market. I know of no example in time or place of a society that has been marked by a large measure of political freedom, and that has not also used something comparable to a free market to organize the bulk of economic activity.”
 +
 
 +
"Underlying most arguments against the free market is a lack of belief in freedom itself."
 +
--[[Milton Friedman]], Capitalism and Freedom, 1962.
 +
 
 +
"If an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it. Most economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another."
 +
 
 +
--[[Milton Friedman]], Free to Choose
 +
 
 +
“Capitalism is essentially the economic system of poor people. That’s what allowed the people that came from humble origins of the world to have economic rights the way only nobility and the high bourgeoisie had it before. So capitalism is essentially a tool for poor people to prosper.”—Hernando de Soto, PBS Interview, March 30–31, 2001
 +
 
 +
(cf: [http://www.americansolutions.com/General/?Page=026a3bda-755c-45d8-84d3-c68eef294612 Values - Free Enterprise])
 +
 
 +
"The only real cure for poverty is production". [[Henry Hazlitt]], from ''Man vs. the Welfare State''.
 +
 
 +
"The first condition for the establishment of perpetual peace is the general adoption of the principles of laissez-faire capitalism."—Ludwig von Mises, The Ultimate Foundation of Economic Science
 +
 
 +
"There are two methods, or means, and only two, whereby man's needs and desires can be satisfied. One is the production and exchange of wealth; this is the economic means. The other is the uncompensated appropriation of wealth produced by others; this is the political means."—Albert Jay Nock, Our enemy, the State
 +
 
 +
"Businessmen are the symbol of a free society — the symbol of America."—Ayn Rand
 +
 
 +
== See also ==
 +
* [[Austrian economics]]
 +
* [[Capital]]
 +
* [[Capital risk]]
 +
* [[Venture capital]]
 +
* [[Free Enterprise]]
 +
* [[Ludwig von Mises]]
 +
* [[Enterprise]]
 +
* [[Planned economy]]
 +
* [[Socialism]]
 +
* [[Welfare state]] turns to [[Nanny state]] turns to [[Police state]]
 +
* [[Benefits of capitalism]]
 +
* [[Vulture capitalist]]
 +
 
 +
==External links==
 +
 
 +
*[https://www.britannica.com/money/capitalism Capitalism], Britannica
 +
*[http://www.capmag.com Capitalism Magazine]
 +
*[http://www.aim.org/wls/category/capitalism/ What Liberals Say - Category: Capitalism], [[Accuracy In Media]]
 +
 
 +
Videos:
 +
 
 +
*[https://www.youtube.com/playlist?list=PLbjmSS6LZDGounra1oTDTIHXlodKALZCb Capitalism videos], Video playlist
  
−
==Concept==
 
−
===Origins===
 
−
===Industrial Capitalism===
 
−
===Finance Capitalism===
 
−
===Social relations===
 
−
===Mode of production===
 
−
===Superstructure===
 
 
==References==
 
==References==
 +
<references/>
  
−
[[Category:Capitalism]]
+
{{Conservatism}}
−
[[Category:Economic ideologies]]
+
[[Category:Capitalism|!]]
−
[[Category:Rightism]]
+
[[Category:Economics]]
 +
[[Category:Conservatism]]
 +
[[Category:Fiscal Conservatives]]
 +
[[Category:Economic Preparedness]]
 +
[[Category:Libertarianism]]
 +
[[Category:Anti-Communism]]

Revision as of 22:03, July 25, 2026

Tokyo Stock Exchange

Capitalism is the free market economic system based on the work ethic, private ownership, innovation and entrepreneurship. The investment of capital, and production, distribution, income, and prices are determined not by government (as in socialism) but through the operation of a competitive market where decisions are voluntary and private rather than regulated and mandated by government (see, e.g., the law of supply and demand).

Overview

One self-regulating feature of capitalism is competition, which helps maintain fair market value for goods and services. However, unrestrained or pure capitalism may sometimes create a positive feedback loop in which a small number of individual accumulations of capital grow ever larger, eventually becoming so few as to limit effective competition, thus ceasing to strictly be free-market capitalism. In this regard, pure capitalism is unstable. Modern political systems have developed regulation mechanisms in an attempt to render capitalism more stable, including anti-trust regulation, trade tariffs, etc.

Since the fall of communism, and the advent of information technology, capitalism is becoming increasingly widespread.

Adam Smith described the operation of capital accumulation through the productive powers of labor as such,

“ Whatever a person saves from his revenue he adds to his capital, and either employs it himself in maintaining an additional number of productive hands, or enables some other person to do so, by lending it to him for an interest, that is, for a share of the profits. As the capital of an individual can be increased only by what he saves from his annual revenue or his annual gains, so the capital of a society, which is the same with that of all the individuals who compose it, can be increased only in the same manner.[1] ”

Smith goes on to describe how the productive powers of labor employed by the owner of a capital allow laborers to reproduce with a profit the value of their maintenance, over and above their own consumption, which then allows for an additional set of hands to be employed.[2] Smith observes labor is the original purchase price for all the wealth of the world,

The free enterprise system in America before liberals, RINOs, and/or members of the progressive movement, such as President Barack Obama, eroded America's economic freedom and prosperity. Former president Barack Obama created massive Federal government debt, which upset the system.
“ The real price of every thing, what every thing really costs to the man who wants to acquire it, is the toil and trouble of acquiring it. What every thing is really worth to the man who has acquired it, and who wants to dispose of it or exchange it for something else, is the toil and trouble which it can save to himself, and which it can impose upon other people. What is bought with money or with goods is purchased by labour, 2[3] as much as what we acquire by the toil of our own body. That money or those goods indeed save us this toil. They contain the value of a certain quantity of labour which we exchange for what is supposed at the time to contain the value of an equal quantity. Labour was the first price, the original purchase-money that was paid for all things. It was not by gold or by silver, but by labour, that all the wealth of the world was originally purchased; and its value, to those who possess it, and who want to exchange it for some new productions, is precisely equal to the quantity of labour which it can enable them to purchase or command.[4] ”

Real wealth consists not in money, but in the things money will exchange for,

“ In order to put industry into motion, three things are requisite; materials to work upon, tools to work with, and the wages or recompense for the sake of which the work is done. Money is neither a material to work upon, nor a tool to work with; and though the wages of the workman are commonly paid to him in money, his real revenue, like that of all other men, consists, not in money, but in the money's worth; not in the metal pieces, but in what can be got for them.[5] ”

Since wealth does not consist in money, gold, or silver, and labor is the original purchase price, Smith explains how the capitalist system is then put into motion, complete with natural incentives, only Smith does not use the word "capital" here to describe what is needed. Smith explains how a "store of goods", or "stock sufficient to maintain" the original capitalist entrepreneur is necessary;

“ When the stock which a man possesses is no more than sufficient to maintain him for a few days or a few weeks, he seldom thinks of deriving any revenue from it. He consumes it as sparingly as he can, and endeavours by his labour to acquire something which may supply its place before it be consumed altogether. His revenue is, in this case, derived from his labour only. This is the state of the greater part of the labouring poor in all countries.

But when he possesses stock sufficient to maintain him for months or years, he naturally endeavours to derive a revenue from the greater part of it; reserving only so much for his immediate consumption as may maintain him till this revenue begins to come in. His whole stock, therefore, is distinguished into two parts. That part which, he expects, is to afford him this revenue, is called his capital. The other is that which supplies his immediate consumption [6]

”

The division of labor is the necessary condition that gives rise to the productive powers of labor that allows for large scale economic growth. By "division of labor", Smith is referring to "specialization of labor", where each worker acquires specific knowledge to apply to a specific task.

“ In that rude state of society in which there is no division of labour, in which exchanges are seldom made, and in which every man provides everything for himself, it is not necessary that any stock should be accumulated or stored up beforehand in order to carry on the business of the society. Every man endeavours to supply by his own industry his own occasional wants as they occur. When he is hungry, he goes to the forest to hunt; when his coat is worn out, he clothes himself with the skin of the first large animal he kills: and when his hut begins to go to ruin, he repairs it, as well as he can, with the trees and the turf that are nearest it.

But when the division of labour has once been thoroughly introduced, the produce of a man's own labour can supply but a very small part of his occasional wants. The far greater part of them are supplied by the produce of other men's labour, which he purchases with the produce, or, what is the same thing, with the price of the produce of his own. But this purchase cannot be made till such time as the produce of his own labour has not only been completed, but sold. A stock of goods of different kinds, therefore, must be stored up somewhere sufficient to maintain him, and to supply him with the materials and tools of his work till such time, at least, as both these events can be brought about.

As the accumulation of stock must, in the nature of things, be previous to the division of labour, ...in order to give constant employment to an equal number of workmen, an equal stock of provisions, and a greater stock of materials and tools than what would have been necessary in a ruder state of things, must be accumulated beforehand.[7]

”
“ When the division of labour has been once thoroughly established, it is but a very small part of a man's wants which the produce of his own labour can supply. He supplies the far greater part of them by exchanging that surplus part of the produce of his own labour, which is over and above his own consumption, for such parts of the produce of other men's labour as he has occasion for. Every man thus lives by exchanging, or becomes in some measure a merchant, and the society itself grows to be what is properly a commercial society.[8] ”

Capitalism and Society

Ludwig von Mises

Historically, capitalism has fostered freedom and an increase in the standard of living and human rights, and vice versa. Societies that have tried non-capitalist systems inevitably fall into tyranny.

For example, Venezuela, while not a perfect country before Hugo Chavez, had freedom and wealth unprecedented in its history. As Chavez has nationalized industries, he has also centralized power for himself, becoming a dictator.

Capitalist societies also generally have higher standards of living compared to their non-capitalist counterparts in terms of per capita GDP, education, healthcare, and poverty rates. China, for instance, has been growing extremely prosperous since it began opening its economy to capitalism in the 1980s.

However, some capitalist societies also have seen progressively larger gaps between the upper and middle classes develop, such as the United States where the top twenty percent owned eighty-seven percent of the financial wealth and eighty percent of the total wealth, despite having the largest GDP in the world.

Defeating Poverty

Thanks to Capitalism, billions of people have been able to pull themselves out of poverty. Capitalism has lead to the greatest reduction in human misery.[9] As capitalism provides more opportunities to people, as research has shown that when people earn their way out of poverty it is much more empowering and enduring than being supported by the government.[10]

Criticism

A free market, non-governmental system can pave the way for economic domination and control by a stateless, undemocratic oligarchy more powerful than any government. The Davos party or Epstein Class, for example.

Quotes

“Historical evidence speaks with a single voice on the relation between political freedom and a free market. I know of no example in time or place of a society that has been marked by a large measure of political freedom, and that has not also used something comparable to a free market to organize the bulk of economic activity.”

"Underlying most arguments against the free market is a lack of belief in freedom itself." --Milton Friedman, Capitalism and Freedom, 1962.

"If an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it. Most economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another."

--Milton Friedman, Free to Choose

“Capitalism is essentially the economic system of poor people. That’s what allowed the people that came from humble origins of the world to have economic rights the way only nobility and the high bourgeoisie had it before. So capitalism is essentially a tool for poor people to prosper.”—Hernando de Soto, PBS Interview, March 30–31, 2001

(cf: Values - Free Enterprise)

"The only real cure for poverty is production". Henry Hazlitt, from Man vs. the Welfare State.

"The first condition for the establishment of perpetual peace is the general adoption of the principles of laissez-faire capitalism."—Ludwig von Mises, The Ultimate Foundation of Economic Science

"There are two methods, or means, and only two, whereby man's needs and desires can be satisfied. One is the production and exchange of wealth; this is the economic means. The other is the uncompensated appropriation of wealth produced by others; this is the political means."—Albert Jay Nock, Our enemy, the State

"Businessmen are the symbol of a free society — the symbol of America."—Ayn Rand

See also

External links

Videos:

References

  1. ↑ Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Book II, Chapter 3, Paragraph 15, Of the Accumulation of Capital, or of Productive and Unproductive Labour, First Edition 1776.
  2. ↑ Adam Smith, Wealth of Nations, Book II, Chapter 3, Paragraph 22.
  3. ↑ 'Everything in the world is purchased by labour.'—Hume, 'Of Commerce,' in Political Discourses, 1752, p. 12
  4. ↑ Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Book I, Chapter 5, Paragraph 2, Of the Real and Nominal Price of Commodities, First Edition 1776.
  5. ↑ Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Book II, Chapter 2, Paragraph 37, Of Money Considered as a particular Branch of the General Stock of the Society, or of the Expence of Maintaining the National Capital , First Edition 1776.
  6. ↑ Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Book II, Chapter 1, Paragraphs 1 & 2, Of the Division of Stock , First Edition 1776.
  7. ↑ Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Book II, Introduction, Paragraphs 1, 2, & 3 Of the Nature, Accumulation, and Employment of Stock,, First Edition 1776.
  8. ↑ Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Book I, Chapter 4, Paragraphs 1 Of the Origin and Use of Money, First Edition 1776.
  9. ↑ https://www.prageru.com/video/if-you-hate-poverty-you-should-love-capitalism/
  10. ↑ https://www.prageru.com/video/there-is-only-one-way-out-of-poverty/
v • d • e
Conservatism
Ideology
Leaders and Thinkers
Organizations
Other
Retrieved from "https://conservapedia.com/index.php?title=Capitalism&oldid=2200394"