Capitalism 101

For the benefit of those who are a product of public (i.e. government) education (or Harvard Law school), today's lesson will use small words.

Today let's talk about Capitalism.

First lets talk about what capitalism is NOT. Capitalism is not free-trade. It is not lack of government interference. It is not mutual trade for mutual benefit.

Capitalism is about CAPITAL.

Yeah, I know kind of an A is A statement there. (you, the Randian in the corner, stop snickering)

Capitalism is about capital. Capital, again using small words for the Harvard Law set, is a bunch of money piled together. Once it's gathered up, it can be used to DO stuff. All that other stuff is just decoration on the cake. Market Capitalism, Free-Market Capitalism, Anarcho-Capitalism, laissez-faire capitalism, are simply methods of implementation.

Capital is a pile of money that can DO stuff.

The next time one of your liberal friends complains that the rich are getting richer, look them straight in the eye and say to them, "Are you on crack?"

The rich getting richer is a good thing; it's a feature, not a bug. Quick, when was the last time a poor person gave you a job? Oh, oh, I know the answer...pick me pick me

How about never.

Show me 1001 people with a hundred bucks and what do you have? Nothing. Show me 1000 people with $10 and one guy with $90,000 and what do I have? I have two decent jobs, or I have a milling machine, or delivery truck, or ...

Redistribution of wealth makes the entire society poorer in aggregate. (that means mixed in all-together for the Harvard Law types).
Redistribution of wealth kills jobs.
Redistribution of wealth kills innovation.
Redistribution of wealth kills investment.
Etc. Etc.

Capitalism is about capital. It's about gathering money together and putting it to work. It is about how you create the means of production. Contrast to Marxism which is about who owns the means of production.

I don't care if one guy has a million bucks or if a million people all throw a buck into a pot. (i.e. form one of those evil corporations). When you convert money into capital you now have the means of creating new means of production, delivery, or distribution.

New means of production, delivery, or distribution means new jobs, and general growth of the economy as a whole. And growth, as my friend Aretae like to point out, is dominant.

Not only that, but the feedback loop is resonant, not dampening. Again, for the Harvard Law set, that means small changes in output, put back into the system, get amplified (made bigger) yielding large changes in overall output for very small inputs.

Or put simply, when you pile a bunch of money together, put it to work, hire new people, and create new jobs those people in turn pile their money together, put it to work, hire new people, create new jobs, and then those people...

...and it keeps going until you run out of people to hire, with is usually an unemployment rate of around 3-4% because a certain percentage of people are simply unemployable no matter how much you try.

That other stuff above, free markets, laissez-faire, etc are simply ways of tuning the efficiency of the feedback loop. A free market, or removing the shackles of regulation, simply means that you get more feedback. Again in simple words, the more free the market, the more jobs and growth you create for every dollar of capital.

And that my friends, is why you want the rich to get richer, and why "spreading the wealth" is bad.