Category: Economics, Finance, and Political Economy

WILL AMERICAN CAPITALISM STILL EXIST IN 100 YEARS?

America doesn’t practice capitalism it practices rule of law, and as a consequence of rule of law, people are limited to survival in markets. Because western civilization began entrepreneurially, developed promise and contract, tort law and property, testimony and jury, we have long standing institutions for enforcing contracts, and long standing tradition of high trust.

So for these reasons we could develop large scale organizations using contracts. These large scale organizations using contracts could organize a lot of money behind entrepreneurial ventures.

Because of a combination of rule of law of tort, contracts, and large organizations, we could create high production capacity using high capital investment in machines, without resorting to central government control, militarizing people, serfdom or slavery to organize people into large working groups.

And using this combination of law, contract, jury, large organizations, and technological innovation, we could drag humanity – resisting us, kicking and screaming – out of ignorance, superstition, hard labor, poverty, starvation, disease, child mortality, early death, tyranny, and the chaos of natural forces, at the cost of creating uncertainty. So people traded poverty and certainty for prosperity and uncertainty. And people continue to make the choice every day.

The communists (jews) invented the terms capitalism as a criticism, and socialism and communism as a false promise, as a means of restoring certainty and control over their lives. But neither socialism or communism is possible because both suffer from the four big problems of lack of incentives, and therefore laziness, the inability to use prices to efficiently organize an economy, and endemic corruption by state managed industries and the government, and the tendency of the people to vote themselves or demand themselves into tragedies ofthe commons: consumption higher than production.

What the future will bring?

In advanced countries one child policies: Automation will continue to drive down human labor markets until only a third of people, or maybe a fifth of people, can find employment, nd those people who work will end democracy and rule the people that can’t. The end result will be eugenics that suppressed the reproduction and consumption of those people who are unable to participate in production distribution and trade. IN poor countries they will forgo automation and continue to use labor, which will produce subsistence level for the poor and a small wealthy class.

Just Like the rest of history.