Can anyone define "Capitalism"

It makes perfect sense it is the roots of socialism. Not my perfereed method but +1 neverthrless

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I apologize for using economic terms. But they are basic concepts I'm sorry many of you don't understand.<!-/Quote-!>

Conceited little jerk. Dont you be condescending to me pal.

Here's some quotes from Friedrich Hayek:
"If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion."

"It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only those individuals know."

Capitalist is just freedom, letting people do what they want to do with their money. That some people don't benefit from voluntary trade is unfortunate, but if they can't succeed in getting what they need or want with the consent of others, I fail to see how simply creating an institution to simply take the thing by force to give to the person or people in question is somehow an improvement.

Love this debate lol

How about this one .

Capitalism clearly has some good points , I dont think i can deny that . But left unregulated has the potential to destroy society .

So paired with a democratically ellected goverment that creates the regulation to keep it under control . It can and has worked .
Maybe the problem and my negative view on it is based on the fact that the balance has failed in that the Goverments have themselves become the capitalist , or influenced to much by the Capitalist .

I still lean more to socialism , but with a capitalism system run by a democratically ellected goverment by proportional representation .

Quote " Capitalism is a monetary system and thats it. But when adopted as a way of life its becomes a legitimate way to rob someone under the guise of profit and intelligence. "

Would this be what you mean by " a way of life " ?

Shoot Crafty that wasn't directed at you at all there was no condescension to begin with, that was targeted at those who didn't understand my initial argument. I figured price elasticity wasn't a term that many understand.

MantoArms Socialism is Capitalism. But I like the way you put it. But if regulated away from policies that support profit maximization or put in the hands of people that will not grow or promote growth but merely leach off the society that allows them is not capitalism but yet also a common conception of socialism. However nearly all of American Capitalism have this self servicing issue in which hurts a society and doesn't help it.

@ Scarlet - 2 things it would appear Hayek supported the opposite idea of the rest of your posting. I could of course misconceived the idea because I don't know him, and the surrounding context might be different. Second more important point, Capitalism=Freedom? Far from true there are built in rules of capitalism that eliminates freedom for many. Most easily put if you don't have money you don't have accessibility to the things that the world has to offer. That is one of the most restrictive ideas the world has ever conceived. To use an example though not meant to advocate if you look at Native Americans systems of administration they are far more free, or take the barter system if you want another example that doesn't utilize this restrictive policy. Capitalism allows you to be free to make money, but as far as many other facets of society it restricts them to a level of payment outside the control of an individual. In my opinion far far from free. On that note there is not only one alternative to capitalism and there is much more then an authoritative approach of redistribution. Why everyone believes that is beyond me.

I was really hoping I'd get someone to confirm my definition of capitalism but I'll just ignore that fact. It appears that almost all of you believe that unregulated capitalism does cause bigger differences in wealth disparity and encourages a classist aristocracy at least to some level. So I'll go on to point two. Capitalism steals money from a society, lowering the value therein of:

This is complex idea but can be said in simple ideas. For the basis of this argument MV doesn't really matter, hopefully you will understand why during your reading of it. So... I had mentioned earlier that someone making 300K only 25% goes to necessity spending, this is inaccurate but it fits the trend I was attempting to explain before. So I'll still use these numbers. Let's say that another 25% goes into luxurious spending, which leaves 50% remaining. Now everyone knows that money not spent should not sit but be invested to make more money despite the fact that money before investment was not being utilized anyways. Capitalism puts money as the sole indicator of success so to be successful you need more. So in fact why wouldn't you invest that excess 50%. This should be a good thing though not a bad thing. But it isn't! Not at all!

A new company sets forth an IPO (Initial Public Offering) when it goes public for the first time. Occasionally it will sell more shares off of its principle ownership however most transactions after this point do not ever reach the company's financial assets ever again, in fact shares after an IPO are much more likely to diminish the assets because share prices go up much more readily then they go down. The reason for this is simple. The stock market accumulates much more cash in investment then it liquidates. People invest in the market continuously and the heaviest players will not liquidate but instead reinvest their earnings. To be successful at this of course you need to cash out a higher value then what you bought in for. This increases the worth of the stock market. And so people buy in and very few ever truly cash out. This remember doesn't inspire growth as the majority of transactions are between two brokers. The stock market then will turn into a vacuum. All the money put into it is not spent on consumption, and is not spent on investment for the company only to be used for resale and/or dividends, in which primarily though not exclusively will just be reinvested into the vacuum. This phenomenon leads to less money in circulation, and though value is high most of the value is in fact excess Market Value or companies off of equilibrium. This is an observation most brokers understand and take full advantage of. So people can make loads of cash as a company that has not made any fatal moves stands to gain anyways. As the size of money invested in this capitalist institution continues to grow endlessly. As money gets added to the equation value has to resemble it. What the capitalist approach to utilization of investment has lead to is a shortage of usable dollar. This shortage decreases the buying power of the dollar as it causes inflation. The trade off of this added inflation against the dollar is the inflation of an imaginary number of Market Value. This does two crippling things, it makes ownership in companies more expensive and also ties money to an imaginary value. This means the actual intrinsic value of ownership of a company is less tied to actual assets involved in the ownership of the company. All of this money no longer has any value.

Of course this is in reference to a societal issue as for as personal gain it is very beneficial. This is true for almost all investment opportunities the exceptions are Bonds/IPO's/Savings accounts/Purchasing of Cash Flows. The largest the share of the economy that is owned by Stocks/Miscellaneous Securites/Mortages/Rental Properties the less accessible money there is for an economy to use and or grow.

So that is my second anti-capitalist argument. The first is that it drives a wedge to disempower the buying classes, and the second is it destroys the accessible amount of money in a society.

I've never truly mentioned my alternative but I haven't finished my book yet... so... sorry folks. It is fairly complicated but I'm willing to divulge it in another thread upon request. (when i have the time)

Yeah, the first built in rule of capitalism is that you need the consent of both parties in any transaction. In a capitalist system, I'm not required to part with any wealth that I don't want to for any reason. Requiring me to do so does constitute a direct violation of my freedom. This is what is required when you imply we should provide others with access to things. If you still require my consent in the distribution of my property, the system is still capitalist (to the degree this is true) because I can still disagree and act on that disagreement. If you do not, the system is not capitalist (to the degree this isn't true).

The fact is that you're arguing that people should put their resources to use in the manner you deem best rather than the manner each of them deem best. How this is not authoritarian is beyond me.

I didn't get that from the post Scarlet. I see it saying for capitalism to work then the money needs to circulate. Spending fuels industry fuels employment, creates more available cash to continue the cycle. This is how real growth (not paper asset growth) happens. I didn't see anyone saying people must use their resources in any particular manner. So it's not authoritarian at all, it's just one opinion of how to make our financial system work. Spend our way out of debt. And I agree with it on the whole, but then I am no economist by any means, I just like to think I have a bit of common sense.

I just feel capitalism is far more authoritative. There is one object with ultimate power and the people have no say in the value of that object. It decides the life they want to live, and people do NOT got to determine how much they can make and become slaves to the system. Forced into these harsh rules. This goes back to my first point of the infinite price elasticity on necessity goods. Too say a person can't attend a movie because the price to see it is 14$ when the distribution of the movie to theaters is practically free how do people have a choice? The only choice they have is for people not to go see and let the industry fall a part before their is ample time to correct it. Freedom? Bah! Give people the ability to experience as much life as possible that is for sure way better, you might find a little more nationalism, compassion, and charity by doing so.

When I see these sort of questions, I wonder to myself... why should anyone care?

You dont seem to have anything constructive to contribute Laguna. Maybe the subject is over your head?

Isn't Laguna an economist? Over-exposed maybe?

Crafty, my response was more directed at the post previous to the one directly above my response. Of course, it is partially relevant to everything. There is no means of implementing any economic system except capitalism without using the powers of a government or government-like organization. This is definitional as capitalism is about reducing the role of government in the economy to the bare minimum of preventing the use of fraud and coercion. The use of government to enforce any economic system is anti-capitalistic. Of course, we're talking about a manner of degrees, the degree to which government does not interfere with the economic decisions of its citizens is the degree to which the system is capitalistic. Many people do agree with having a mostly, but not completely, capitalistic system. Think anti-trust laws, various regulations, etc. However, this does not make the statement that capitalism is about reducing the government interference any less true, it merely means the degree to which capitalism may be implemented varies.

The problem with what Drew is saying is that those are the decisions that people make. His opinion on how to make the financial system work is to prevent people from being able to make the decisions they make. If somebody doesn't want to spend, how do you get them to spend without using the government as a vehicle to drive spending by taking the money from citizens and spending it as the government sees fit? Even in a representative democracy, how do the decisions of elected representatives somehow represent the public better than the decisions of individuals? There is only one conclusion to Drew's reasoning: the use of government power to coerce people into not making the decisions they would make normally.

In reference to the notion that we should spend our way out of debt, I'm sure there are many different opinions, but the first disagreement coming from me is that the money that is spent is inevitably, if not immediately, coming from the pockets of taxpayers. It isn't "government money", it is the money of citizens... shouldn't it be the decision of citizens as to what they should do with their money? Why should anyone acknowledge the authority of the government to do this? If people believe spending money is good, let them do themselves. If they believe saving money is good, let them do it themselves. Let people figure out their own individual and community responses. Very ideological, I'm sure. The point I'm trying to make is that capitalism isn't primarily about profit, money, or debt. It's about keeping the government from interfering with individual economic decisions. Beyond that, the whole circular flow doesn't take into account where the money is being spent. This is very important. Even if government spending can drive forward growth, it can only do so as long as the government continues to spend more and more money. The problem is that this growth is fueled by the government spending and encourages growth and contraction in certain sectors that are different than the sectors that would grow or contract given "normal" patterns of individual behavior. The result is overconsumption and malinvestment in certain sectors. Once you remove the spending that drove this type of growth, what do you imagine is the result? Government spending behavior is simply not a substitute for individual spending behavior.

Drew, it is not compassion to order people to provide charity. You don't show compassion by forcing people to charity. Nobody learns compassion when you force them to pay for others. They resent the authority that took their money and the people that use it. You want to see compassion? Let people provide their own damn charity of their own volition... and let them choose not to. Don't point the gun of government power at people's heads and demand they follow your orders.

All the economic authority in a capitalist system is distributed amongst everyone. There is not one object with ultimate power, it is simply a means of exchange. Everyone has a say in the value of this object. How much gas is a dollar worth? How much bread is a dollar worth? It is determined when people engage in voluntary trade. The "harsh rules" people are forced into are the rules of voluntary exchange. You don't get to exist or experience life at the expense of others and use government authority to simply take the money from others. This is theft, there is no other word for taking money from people. The harsh reality is that nothing is free. Bread doesn't magically materialize in bakeries, movies don't magically materialize in theatres, gas doesn't magically materialize in pumps. People produce and trade these things for their own reasons. They spend their time, effort, and resources to do so. It's not like they make the decision on whether something is worth producing or what its value is alone, everyone that makes the decision on whether to buy or not buy, to invest or not invest, to produce or not produce plays a role. That's how you balance the competing demands and limited resources of a society. Bottom up, not top down. Let people determine how their own efforts are utilized.

Let people make their own economic decisions. Let theatre owners decide how much to charge, let individuals decide whether it's worth spending their money on. Don't force people to pay for (or produce) "free" stuff for others. Never forget that nothing is free, someone pays for it whether in time, effort, or money.

People NEED food to eat, people NEED a house to live in (so they don't die from the man made and naturals elements), people for the most part NEED transportation to supply them with money to afford the other necessities. People don't have a say when MV makes the rules on necessities. I have brought this up a few times I'm not sure if you don't believe me or refuse to refute this claim. People don't decide what things cost or what they make, they minutely influence it. The movie example was a perfect example in one respect and a horrible one in another. I understand production costs but then there are replicated costs. When a farm has all the equipment it pays for expenses not for investments. Most companies in the world are charging fees for products and services without regard to actual cost the influence of new competitors don't bring prices down because they don't have the same level of infrastructure. The system doesn't make any sense. I glanced at some episode of some show where rich people throw money at people to finance their project for ownership and you see stuff like this product needs to sell at 4X the cost otherwise I'm out. This is the behavior that goes on. Products not needed for survival or one that heavily dictates quality of life is far easier to live without and can be controlled by demand but if you think the price of transportation, education, health, shelter, food are not be subjected to these same rules you are mistaken. These principles of demand driven self regulation doesn't work in these areas, they impose the contrary a lack of freedom as SOMEONE ELSE HAS COMPLETE CONTROL OVER THEIR LIVES!!! If you also add in the effects of, this is truly a supply driven market system, and that debt makes the value of a dollar completely more volatile, then people don't even have any concept of what their money is worth. People are lied to everyday coerced into believing that a car payment should equal 1/3 sometimes even more of the monthly income. They don't control car prices they don't control interest rates. They only control how mad they are that their last car that they just finished paying off just broke down. So yes I don't believe in people buying a TV for 600$ when it takes about 4.50$ to construct the TV, the price will go down if enough people follow suit, but that gallon of gas cost how much? how much to produce? How much have we produced? How much of that did we sell foreign-ly? What company in the world has the highest profits?

This issue is exasperated more so with my last point that money invested in taken out of circulation. Making that dollar price even more volatile and even more coercive.

The truth is having money controlling everything isn't freedom your new authoritative regime is the dollar in your pocket, and divisions get created that sets up horrendous limits to peoples abilities to experience life. The complete inability to control most aspects of life is slavery the opposite of freedom. Economic servitude.

So Mizore the purpose of being argumentative is to listen to what other people say and refute their claim to a point where they realize they are wrong. You can not win if you don't defeat your opponents points. And if you are not going to win an argument then why take part?

This is why I will refute your analysis on charity as well if you want but I don't really see it as relevant. If anything I know you are knowledged on many subjects and are very elegant with your words, but I have no interest in your posts (not saying stop as others may appreciate them) if we are simply going to go back and forth rephrasing our arguments.

I also don't believe capitalism is defined by lack of intervention, but has a more important basis on a self regulating system of exchanges, and employment. But as this is subjective it is impossible to argue. so...

sarcasm alert: Oh, yes, capitalism is a pure evil, and the font of all ills in any society. We must have a Government to regulate all prices and wages, to tell us what our labor is worth; only then will all people be happy and free. everyone should donate their time and energy to the State, and look fawningly to the State to dole out largesse to all and sundry. the entrepreneurs must be reined in, for if they make any money, it must be by defrauding others. Why, look at microsoft, Apple, and the automobile industry: the visionaries who make these ideas into reality should get the same reward as anyone who performs 8 hours of meaningless labor and then zones out on the couch watching the Colbert report and "Beavis and Butt-head" while guzzling a couple six-packs. No more capitalism, folks, it is a ruination and no country that has allowed it has ever prospered or had a decent standard of living! I will stop now, before I go on a rant...

But I like "Beavis and Butt-head" while guzzling a couple six-packs.

Yes, I'm an economist, one of my M.Sc.'s courses was History of Economic Thought, where we dealt with questions such as this and yet I'm remarkably indifferent to this sort of endeavour. And, pragmatically, so should everyone else.

To our social life, it matters not what which is the most capitalist or socialist proposal. The main question we should ask is does it work? That is to say proposals should be judged on their own merits to the objectives they are assigned; which implies ideology ought to bear no weight in that judgement.

Plus, the definition of capitalism belongs more to Law than to Economics, so, quite naturally, the answers to these sort of questions are always convoluted.

In that sense, here's my small contribution:
The birth of capitalism is usually associated with the rise of protestantism. Whatever sets capitalism apart from the rest, must lie with the conditions which gave its origin, and therefore with protestantism.

Maclean your sarcastic rant is short sighted. Once again the only alternative to capitalism is some authoritative redistributing regime. THAT'S NOT TRUE!!!!! If anyone doesn't like capitalism they are commie/socialist. Instead of thinking hey let's improve upon capitalism because we don't like it, you condemn them without hearing them out.

Nice post Laguna

I concede one point, that is, capitalism can be improved on to better benefit society as a whole. However, yes, I stand by my belief (knowledge, rather) that anyone who hates capitalism is a socialist/commie/pinko.

Capitalism is slave labour of the poor and vulnerable, exploitation of the value of labour and organised crime on a global scale.

So many smart young minds in Simcountry. Anyone want to take on sorting out my check book for me??? ha ha ha ha

Aren't y'all tired of talking about boring ol' "capitalism"? Let's change this thread to something much more important and exciting!

Can anyone define "Shoes"?

Happy Weekend, Sim Peeps!!!!!

LLee: If that is how you define Capitalism, I would really hate to hear your definition of Communism.

Laguna: How about a little more info on the relationship, Protestantism/Capitalism

Max Weber Laguna? What I have heard is that his theory was, at best, debunked.

<!-Quote-!>Quote:

Social Forces © 2001 Social Forces, University of North Carolina Press
Abstract:

We investigate the thesis widely credited to Max Weber that Protestantism contributed to the rise of industrial capitalism by estimating the associations between the percentage of Protestants and the development of industrial capitalism in European countries in the mid- to late nineteenth century. Development is measured using five sets of variables, including measures of wealth and savings, the founding date of the principal stock exchange, extension of the railroads network, distribution of the male labor force in agriculture and in industry, and infant mortality. On the basis of this evidence, there is little empirical support for what we call the "Common Interpretation" of Weber's The Protestant Ethic, namely the idea that the strength of Protestantism in a country was associated with the early development of industrial capitalism. The origin of the Common Interpretation and its popular success are probably derived largely from selected anecdotal evidence fortified, through retrospective imputation, by the perceived well-being of contemporary Protestant countries. <!-/Quote-!>

I'm quite enjoying reading deeper into this topic, good thread in general.

That's interesting Crafty, thanks for the posting.