The Theory of Capitalism
Capitalism is often a misrepresented concept. It’s usually seen as an ideology or economic system, created and maintained by people of power. A country can be socialist, communist, or capitalist. The issue I have with the aforementioned prototypical grouping is that capitalism does not fit. This is because capitalism is a theory to describe human behavior, rather than a system to be incorporated.
Let us take a simple example. Imagine if you will a totalitarian society, wherein every member is given what he needs to survive. Would the members of this society have precisely the same interests? Would none of them hope to further their own interests through trade? Perhaps one member of the society is frequently cold and would like to trade some of the provided food for a blanket. This barter, and indeed ny choice one makes is a simplistic example of capitalism: everyone seeks to further their own interests with their time and resources. They seek profit.
To take the concept further, you can apply it to any action a person takes. A student who chooses to study all weekend instead of join his friends on a vacation might say, “this exam cost me a trip to the Bahamas.” He made a value judgment between the two actions, and speculated that studying for the exam would result in a more preferable action. If the student is afterward dissatisfied with his choice to study (perhaps he would have easily passed the exam regardless), he may consider the missed trip to the Bahamas a loss. It is important to note he could not be certain ahead of time, just as an entrepreneur would not be in choosing to start a new business.
The takeaway is simple. It is human nature to behave in a capitalist manner. It is not something which should be scorned or used as a scapegoat; it’s rational, elegant, and beautiful. When we limit our interference with this natural phenomenon everyone is better off.
Posted by wobbles on Friday, October 08, 2010