"The word 'capitalism' is used in two contradictory ways. Sometimes it's used to mean the free market, or laissez faire. Other times it's used to mean today's government-guided economy. Logically, 'capitalism' can't be both things. Either markets are free or government controls them. We can't have it both ways. The truth is that we don't have a free market -- government regulation and management are pervasive -- so it's misleading to say that 'capitalism' caused today's problems. The free market is innocent. But it's fair to say that crony capitalism created the economic mess. ... What is crony capitalism? It's the economic system in which the marketplace is substantially shaped by a cozy relationship among government, big business and big labor. Under crony capitalism, government bestows a variety of privileges that are simply unattainable in the free market, including import restrictions, bailouts, subsidies and loan guarantees. ... Crony capitalism, better know as government bailouts, saved General Motors and Chrysler from extinction, with Barack Obama cronies the United Auto Workers getting preferential treatment over other creditors and generous stock holdings (especially outrageous considering that the union helped bankrupt the companies in the first place with fat pensions and wasteful work rules). Banks and insurance companies (like AIG) are bailed out because they are deemed too big to fail. Favored farmers get crop subsidies. If free-market capitalism is a private profit-and-loss system, crony capitalism is a private-profit and public-loss system. Companies keep their profits when they succeed but use government to stick the taxpayer with the losses when they fail. Nice work if you can get it. ... It's time we acknowledged the difference between the free market, which is based on freedom and competition, and crony capitalism, which is based on privilege." --columnist John Stossel
Actually capitalism simply means that business capital is held by private individuals as opposed to governmental control of capital.
Most times when people talk about capitalism, what they are really taking about is a free or unfree market.
Lenin, I believe, once said that in order to have a successful revolution, one must first confuse the language. For those of us who would like to see civilization endure, our first order of business must be to use the correct definitions when we use words.
Wow Keynesian economics vs Austrian economics, you could write a book. Indeed entire volumes have been devoted to the topic and could illustrate the differences far better than I ever could.
I'll let the only modern politician I consider a statesman, Ron Paul, define the differences:
http://www.ronpaul.com/2009-05-16/ron-p … economics/
If you look at it from a historical perspective, Keynes gave people like FDR a philosophical facade from which to destroy the old (laissez-faire) economic order. I've recently finished a history of the West which documented the rise of what came to be known as Progrssivism towards the end of the 19th century. Unfortunately, there has been very little good scholarship of this era of American history so finding more information is problematic.
In a nutshell Keynes believed that the flow of money was what make economies prosper not the accumulation and investment of capital. In many ways, Keynes' view flew in the face of, literally, centuries of economic scholarship. In a way, it's also a version of mercantilism which a new coat of paint, so to speak. You might like to read up on the School of Salamanca, which predated Adam Smith by centuries, and "discovered" many of the concepts that were introduced to the world by "Wealth of Nations".
Well, if you look in any dictionary, neither of his definitions fit. But the general idea I completely agree to and keep promoting for a while already.
If you mean a free market, a good term to use is "free enterprise". If you mean capital accumulation so that the workers do not own the means of production (a la Marx) then "capitalism" is a good word for it. Sometimes free enterprise results in capitalism, but it doesn't have to. Sometimes capitalism is a result of a government engineered economy. Free enterprise and capitalism are not synonyms. They are not antonyms. They describe different aspects of the economy. Sometimes they co-occur. Sometimes not.
see, that answer inparticular, is exactly the point I wanted to make, which is, is that there are many different meanings for the same words...is it any wonder we have the problems we have in life, especially in economics and the views of the people thereof.
Especially, between the political parties...arghhhh! I have seen it for years, that there were different views on how to deal with money and economics. we'd have four or eight years doing it the way dems do it and then four or eight years doing it the way repubs do it...no wonder things are so screwed up!
and the citizens create their own ways of working within either system...constitutionally speaking we need to get going in one direction with economic philosophy...seems like that would fix problems...but its ended up more like religious/spiritual problems
Misha,or anyone, what do you know about the difference between Kenyesian economics and Austrian economics...?
Keynesians have a policy of creating inflation to discourage saving and encourage spending. They believe this will stimulate the economy. Austrian school economists are more laissez faire. A good hubber to ask about this is Ledefensetech. He follows the Austrian school and would love to discuss this with you.
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