Thursday, May 13, 2010

Capitalism. It's evil! It's awesome! It oppresses the people! It's what made America great!

How can all this be possible? Obviously someone is lying.

Actually, it's worse than that. The two major interest groups in the United States are both trying to redefine the term "capitalism" away from its classical meaning, and are tarnishing the entire concept in the process.

So what is capitalism? Capitalism, the bare term alone, is the desire to build capital.

What is capital? Capital is the means of production. Factories and farms are capital. Capital increases the efficiency of producing goods. For instance, tractors and irrigation systems are capital equipment; without modern equipment, US farms might not be able to produce enough to feed our population, much less supply large amounts of food to the rest of the world.

So what's bad about that?

What people currently rail against is what is called Institutional Economics. This term means government gets involved in changing the business environment to favor capitalists. Not only does this tend to include limiting liability, by allowing for corporate structures, but it usually becomes a corrupt system with laws favoring particular businesses, which lobby for new laws and contracts.

This is in contrast to Laissez-Faire Capitalism, otherwise known as the "free market". French for "leave it alone", it means government should butt out of the economy, letting individuals and companies slug it out to see who can serve their customers best.

Corporations continually hold up the "capitalism" flag. "We are capitalism! Capitalism is good! We sustain the economy!" In the meantime, they use the privileges granted by the government to maintain effective monopolies, prevent new systems from entering the marketplace, and screw the customer as much as possible, issues which would be mitigated by a true free market system.

Anti-corporate organizations, on the other hand, oppose "capitalism". Many of them are simply polarizing themselves, taking the "anti-capitalist" side opposite the corporate "pro-capitalist" self-labeling. Some are communists who knowingly encourage this, using the corporations' propaganda to damage the entire idea of capitalism, including free markets.

Please keep in mind that there is more than one form capitalism can take, and that there is some very deceptive rhetoric being used, from multiple directions.

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