The classic dictionary; the common belief is that capitalism is about private ownership of the means of production. That, opposed to socialism where the state or government owns the means of production. But this definition is so abstract and so brief, that this definition becomes meaningless. It appears to me that most people never give it a thought. When asked if our country is capitalistic, they’ll usually say “yes.” But then ask them who are the capitalists, and they’ll have to think for a moment, and then might say “people like Henry Ford.” Or maybe they will say, “the heads of our big corporations.” But they’d be missing the main point. Actually, capitalists are all over the place. You might even be one and not even know it. If you saved money from your work, and invested into your business to make more money, then you are a capitalist. By this definition, the group of capitalists may include shop-owners, doctors, lawyers, and multitudes of small business owners. Capitalists are all over. And the CEOs of large corporations? Not unless they invested their capital to grow the business.
Capitalism works well because it is built on voluntary trades; trades where both parties always gain from the transactions or it wouldn’t happen. This system, since antiquity, has evolved into what today in the United States is an economic miracle. Capitalism underpins every prosperous economy and is every country’s hope for a better future.
And, what about the workers? Are they exploited by the owners of businesses? No, they can reap the benefits of the capitalistic system, because as the production increases, more and more jobs become available, and to find enough workers, businesses have to compete for workers by offering them better salaries, better working conditions, and more interesting work.
The roots of our country go back to a capitalistic beginning. It wouldn’t have been necessary to define, explore, and cogitate about capitalism, except for the fact that socialism popped up elsewhere, over the years, and some of the ideas of socialism became adopted by some of our politicians. The politician, always seeking votes to gain power, and if elected, then to stay in power found that a socialistic message was an easier sell to the masses, than to explain the virtues of frugality, minimal debt, and protection of the individual, along with their property rights. So here is one example of what I’m talking about. Selling empty promises of health care for the elderly and the poor, paid for by the government, became popular; but with limited supply and ever-increasing demand, innovation stumbled, debt grew, and quality got lost, and prices went out of control. And now, some politicians think the answer to the problems of Medicare’s unsustainable debt, and Medicaid potentially bankrupting every state in the union, is to make Medicare available to all. Paid for by the government, which of course, is us. Crazy? But it could happen.
Finally, a capitalistic government can offer whatever services the electorate wants or needs including law and order, safety from enemies, clean water, and necessary infrastructure. But when government offers health care, college tuition, and other things to the masses for “free”; this becomes socialism. Nothing is free, it has to be paid for by taxes, and taxes drain the private economy of capital. Only wealth can be grown in the private economy which benefits everybody. Government is always an expense and diminishes prosperity. Capitalism raises the tide that lifts all boats. And income disparity; only socialists worry about that.