- Capitalism and Alternatives -

A definition.

Posted by: Dr. Cruel on October 21, 1999 at 12:04:01:

In Reply to: Capitalism posted by Heather on October 19, 1999 at 17:37:01:

It is a valid question. One would presume that everyone here might have a fairly solid concept in mind regarding this particular economic system - and capitalism is, most certainly, a type of economic system (as opposed to, say, the root of all evil in the universe, or the sum of the Word of God {whose only prophet was Ayn, blessed be the name of the prophet}, or a brand of tomato paste, or some other thing that is not capitalism).

In short, capitalism is a means by which business is financed. It subsumes several things within it: capital (that which is invested), a means by which said capital is accumulated and measured (in many cases, but not all, something called "money" or "equity" or somesuch), property or assets (that which capital is invested on) and ownership (that which is gained by investing "capital", in the form of "money" or other measure of "equity", in "property" or "assets" of some sort or other). The capitalist system is one in which such investment activity takes place as a matter of course.

The frequent counterpoints to this system deal with the assumptions necessary for such an economic paradigm to function (for example, Bukarin did not like the concept of property, declaring that "Property is theft". And so on). But, for a quick, rough understanding of the system, the above should suffice. Observe.

I am a capitalist. I wish to acquire something.

First, I accumulate capital. I 'make' money somehow. This is frequently known by those of a capitalist persuasion as work (this is accomplished more, let us say, "creatively" by those of a more socialist inclination - using forms of wealth accumulation such as the "dole", or "welfare", or perhaps a "people's revolution" or "progressive tax" or such. But I digress).

Next, I find a means by which the development of a property, or the ownership of an asset, like a business ( a pizza parlor, or a huge fez-manufacturing conglomerate, etc.) can give me the opportunity to accrue capital via the virtue of possession. In the case of property, I might collect rent; a business would need to show some sort of profit to raise my interest (more on that later).

Once choosing a lucrative property or asset, I would then invest money (my accumulated equity) in said. I could do so through direct purchase, or by the acquisition of shares (a purchase of voting rights as to how the business is run and the profits split), or through allowing the borrowing of funds (were I a banker, this would be called a "bond").

If I judged the productivity or value of my acquisition correctly, I would then use the subsequent dividends (my "share" of money made by a successful enterprise, i.e. a full apartment complex, or a busy pizzaria, or a wild craze for fezzes) to accumulate the resulting profit, recouping and building on my initial investment.

Naturally, many sorts of things can go wrong along the way (one of the more nasty problems is something we capitalists call, euphemistically, a "crash"). Likewise, all sorts of spinoff effects result from this activity, some good (Pokeman dolls, efficient and economical air travel, McDonald "value meals", "Southpark" cartoons) and some, well ... not nearly so good as one would like (black river water with fish that swim sideways in it, mad-cow disease, child labor, communists).

I hope that I have been helpful, and have not confused issues still further for you.

Dr. "Pumpkin-Head" Cruel

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