History UsefulNotes / Capitalism

** There is debate as to what someone can actually own, such as intellectual property. Supporters say that as it was made by someone, the idea belongs to the creator. If creators did not own their own ideas other people could steal them and use someone else's ideas to make a lot of money at the expense of the creator. For example, if Alice were a small businesswoman who discovered a way to manufacture cars more efficiently, Bob, who already has a big business and thus all of the infrastructure in place, could take Alice's idea and apply it to his own plants. Now Alice has payed the R&D costs for the research but Bob is the one making the money on her idea. Opponents say that the reason we have property in the first place is to manage finite resources and define property as "something one person owns to the exclusion of other people owning it." For example, if Alice owned a pencil, Bob could not use that pencil without first taking it from Alice. Ideas, on the other hand, are infinite, that is one person can have it and someone else can use it without diminishing the first person's utility of it. For example, if Alice owned a book and Bob copied it onto his own paper, both of them can still enjoy the book.

[[folder: Divisions on How Governments Should Exert Control over Markets]]

* Supply-side economists such as Thomas Sowell advocate for an economic system that would trim regulations. This, in turn, would lead greater production/economic output that would then, at least in theory, benefit both owners and workers. Main proponents of this economic system were Reagan (whose brand of supply-side has been dubbed “Reaganomics”), George W. Bush, and currently Donald Trump. Supporters of the system defended it claiming that it lead to the success in the 1980s. Opponents claim that it is the system lead to the early 90s recession, Japanese lost decade, and the Great Recession, claiming that removing the regulations from certain industries like Wall Street lead to them giving loans to people with dubious capacity to repay it if it went bust. Supporters claim that other factors lead to these recessions. Supply-side lost support in 2008 after the collapse was blamed on deregulation, although it still has its supporters, such as political commentator [[Creator/BenShapiro Ben Shapiro]].

** Related, but not as direct as outright banning are quality and/or safety Regulations. Things like requiring seat belts and airbags in automobiles, making sure your food is safe to eat, the water and air aren't polluted, and that things are what they claim to be is the floor of this, and it can get far more complicated. Even more than banning, where to draw the line on regulation is '''hotly''' debated between different groups.
* ''Bailing Out Companies'': Some companies are considered "too big to fail" . If they go under, their suppliers may have to lay people off or go under as well because of the lost business. In situations like this the government can step in but this is very controversial. Opponents saying doing this prevents companies from learning from their mistakes and enforces the behavior that required the bailout in the first place, however, the people most often proposing a bailout are also the people most likely to support regulations that would prevent further occurrences of that "bad behavior". Bailouts are actually a wide variety of fiscal practices, ranging from a simple loan from the government to short-term nationalization of the firm. (IE, the government owns the company for a certain period of time.)

->''Capitalism is not an "ism". It is closer to being the opposite of an "ism", because it is simply the freedom of ordinary people to make whatever economic transactions they can mutually agree to.''
-->--'''Thomas Sowell'''

* ''Enforcing Property Rights'': Stealing is wrong. Not only is theft generally agreed upon to be morally damaging to the individual who steals, and causes suffering to those who are stolen from, but widespread theft (such as the looting that occurs in riots) creates massive market inefficiencies. Fraud is considered a form of stealing (as theft by trick) so it would fall under this.

* ''Enforcing Property Rights'': Stealing is wrong. Not only is theft generally agreed upon to morally damaging to the individual who steals, and causes suffering to those who are stolen from, but widespread theft (such as the looting that occurs in riots) creates massive market inefficiencies. Fraud is considered a form of stealing (as theft by trick) so it would fall under this.

->''"Well first of all, tell me: Is there some society you know that doesn’t run on greed? You think Russia doesn’t run on greed? You think China doesn’t run on greed The world runs on individuals pursuing their separate interests. The great achievements of civilization have not come from government bureaus. Henry Ford didn’t revolutionize the automobile industry that way. In the only cases in which the masses have escaped from the kind of grinding poverty you’re talking about, the only cases in recorded history, are where they have had capitalism and largely free trade. If you want to know where the masses are worse off, worst off, it’s exactly in the kinds of societies that depart from that. So that the record of history is absolutely crystal clear, that there is no alternative way so far discovered of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by the free-enterprise system."''
-->--'''Milton Friedman''' (abridged)


'''Capitalism''' is an economic and political system in which a country's trade and industry is controlled by private individuals, rather than the state.

The essential feature of Capitalism is the incentive to make a profit. Both parties need to voluntary exchange to have their own interest in the outcome, but neither can obtain what they wants without addressing what the other wants. It is this motivated self-interest that can lead to economic prosperity.

->''"Well first of all, tell me: Is there some society you know that doesn’t run on greed? You think Russia doesn’t run on greed? You think China doesn’t run on greed? ... The world runs on individuals pursuing their separate interests. The great achievements of civilization have not come from government bureaus. [[UsefulNotes/AlbertEinstein Einstein]] didn’t construct his theory under order from a [[ObstructiveBureaucrat bureaucrat]]. Henry Ford didn’t revolutionize the automobile industry that way. In the only cases in which the masses have escaped from the kind of grinding poverty you’re talking about, the only cases in recorded history, are where they have had capitalism and largely free trade. If you want to know where the masses are worse off, worst off, it’s exactly in the kinds of societies that depart from that. So that the record of history is absolutely crystal clear, that there is no alternative way so far discovered of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by the free-enterprise system."''
-->--'''Milton Friedman'''

* Carl Menger: Introduced the theory of Marginalism and the Subjective Theory of Value. Léon Walrus and William Stanley Jevons made similar discoveries at roughly the same time, but Menger's work is considered the most complete.

'''Capitalism''' is an economic and political system in which a country's trade and industry is controlled private individuals, rather than the state.