Category: Economics, Finance, and Political Economy

MORE ON DE-PROPAGANDIZING “CAPITALISM”

(required reading)

1. Trade has always existed (generating exchange)

2. Markets have almost always existed (generating prices).

3. Capitalists have existed as long as there have been markets (generating means of production).

4. Northern Europeans (Venetians less so. Saxons largely, the Hansa in particular, the English systematically, the Dutch first at political scale), developed rule of law – which is why they escaped the church with the reformation.)

5. Capitalism consists of rule of law consisting nearly entirely of markets, and socialism of rule of men eliminating or vastly reducing markets – but all polities have some mixed economy and must do so. The problem is that the state is superior at investing in some commons, but the private sector is far better at allocating and maximizing the returns on capital.

6. So capitalism and socialism only evolved once the industrial revolution came into play – and the socialists demanded control over production. Capitalism then was the name they used for ‘market bias under rule of law’ , and socialism ‘state bias under rule of men’.

So any statement about when was capitalism invented, is rater ‘stupid’ really. The answer is very simple: capitalism was the ‘jewish’ view of markets, and socialism the ‘jewish’ view of the state. And suckers bought into this false dichotomy. The question is and always will be the utilities of the state monopoly vs the private sector market. And as it stands, the lesson is quite clear: when it is simple and you know how to do it, but it’s risky and expensive, the state can provide startup capital and market protections. Once that investment is running, it can be ‘sold’ to the private sector who can then maximize its potential.

The USA has mastered the art of moving this high risk investment into the private sector, but this has had the effect of hollowing out predictable sectors of the economy. So it appears that once again, there are those things it is better for the state to produce (labor-consuming and strategic companies, that are less speculative and produce slower longer returns), and things that it is better for the private sector to produce (IQ consuming and highly speculative things with shorter higher returns.)

CONVERSELY

The flood river and irrigation valleys of the fertile, crescent, pakistan-india, and china, could produce state-capital easily, just as the west could produce private-capital easily. The west and east homogenous peoples higher trust. The center tribal heterogenous people lower trust.

It’s not complicated. You do what you can with the people and geography you have.