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Is capitalism the solution

Updated on July 2, 2017

Capitalist assumptions

In a previous article I pointed out some faulty assumptions that many capitalist carry about capitalism. Assumptions like:

- everybody is equal,

- everybody loves competition,

- everybody becomes better through pain.

Although these assumptions are incorrect, as nobody is created equal or the same, most people find competition terrible and only a few people learn from being hurt, that does not mean that capitalism is all bad.

Voting is a right

Voting by League of Women Voters of California LWVC
Voting by League of Women Voters of California LWVC | Source

Capitalism works

Why does it work?

One of the reasons why capitalists think that capitalism works is based on the fact that most capitalist countries have not had a major armed uprising within their borders the last hundred years. Especially the USA has die hard capitalists who think that capitalism works, but also in the United Kingdom, Germany and Russia you will find people proclaiming the wonder of capitalism. They will for example call the current level of luxury a result of a few hundred years of capitalism. Also the current level of technology, with internet and computers that become smaller and faster every year is a result of capitalism, according to those capitalists.

Of course they have a point. Because capitalism and luxury and technology all have risen in the same period of time. But what most capitalist do not say is that in the same period that capitalism has become main stream democracy has become the norm in the western world. So you could also make a case for the fact that democracy is the cause of our higher living standards and quality of life. For example:

Because democracy takes away armed conflict in a country, people have time to use their time to be capitalists.

The case for democracy is even stronger because it does not cause as much suffering as capitalism.

Democracy or Capitalism - Which of the two is it?

Is it really democracy that creates luxury and better living or is it capitalism, or maybe it is both.

What do you think is the reason we have more luxury than our parents and their parents.

The first years of capitalism - A long time ago

Agriculture by Irish_Eyes
Agriculture by Irish_Eyes | Source

The first capitalists were off course our nomadic forefathers who settled down and became farmers. That behavior made it possible to trade their surplus produce with other farmers or nomades for products they wanted. Which next made it possible to invent money to replace barter. The next step in capitalism was off course the lucky basterd who found a precious ore and next could buy anything he wanted, without having to work a whole year. Or a farmer who had the luck to posses lands that were so fertile that year after year he could sell the surplus of his crop. After which he could use his money to enlarge his lands, to earn even more money.

And off course people would start to copy that farmer or that mine owner, which is exactly what capitalist say is what makes capitalism good. The success one person shows is the lure that makes capitalism work, because other people will want the same and will become competitors in the market were there is success to be found. This will create a market in which more and more people will offer a product for a price that will entice consumers to buy.

Market by Richard Bitting
Market by Richard Bitting | Source

The front end of capitalism

Versus the back end

However this creating of markets is the back end side of capitalism, which according to capitalist is what capitalism is all about. The front end of capitalism, the origin of a market, however is strangely enough completely void of capitalist influences. Although capitalists may be good at selling things, they are rather lousy at creating new products. You could even say that the only and major invention that can be attributed to capitalists is the invention of the market.

All other products we know today are solutions to a problem someone encountered, who had the bright idea to solve it and share his solution with his neighbours. Inventions and innovations like fire, the wheel, agriculture, telephone, the car, integrated circuits, html, spreadsheet software, were all done by individuals or small groups of individuals who did not have a monetary goal. There goal was solving problems like:

  • How do I create the same effect as burned prey for food?
  • How do I make travelling lighter and faster?
  • How do I get a more steady foodsupply?
  • How can keep in contact with others that live farther away then earshot?
  • How can I travel without the use of a horse?
  • How can I reduce the size of a radio?
  • How can I connect internet pages through hypertext links?
  • How can I use the computer to do math problems?
None of them were out to earn money with their solutions. As most of these solutions have been given away for free, html, spreadsheet, agriculture, the wheel, fire. Where others were picked up by entrepreneurs to be made in to products, the telephone, the car, integrated circuits.

And off course it are the capitalist who take an invention or innovation and build on it. But it is rather difficult to build on something that is not there. And of course there are inventors and innovators that turn capitalist, by selling there product or becoming an entrepreneur. But most inventors never sell their invention or innovation, because they do not see the need for it.

What do you think of capitalism? - Is it something that is of use to humans.

What is your opinion about capitalism?

See results
Innovation by Master isolated images
Innovation by Master isolated images | Source

Influence of capitalism

different then expected

So the real influence of capitalism is not its part in creating innovations or inventions and making the world a better place. The real influence of capitalism is the dissemination of innovations and inventions. But only those of which capitalists think that will make money. So how many inventions are out there that never made it into the home of the consumer, because no capitalistic entrepreneur wanted to spend his money on it.

And lets not forget all those capitalists who bought up competitors with better ideas and important innovations before those competitors could become mainstream. Just to protect their less then perfect product from real competition. If capitalists were really into competition no inventor or innovator would sell their product and no entrepreneur would buy the inventions or innovations of possible competitors. They all would go to the market and let the consumer decide which product is the best. As capitalist say capitalism works.

Or what to think of all those capitalist companies that buy up competitors to use their innovation or invention to improve their own product. Is that capitalism in a pure form. Off course not, it is fear of loosing ones market share that creates this behavior. Where you would expect that a capitalist is without fear as they crave competition and fighting for the favor of the consumer.

The free market - Yeah really

Chequered Flag by Elliott Brown
Chequered Flag by Elliott Brown | Source

So capitalist may talk about the free market of capitalism, with which they like to say that everybody is allowed to take part in the fight for the favor of the consumer. But what they mean is that a free market is a place where their law of the jungle rules:

Everyone for him- or herself and may the best man or woman win, preferably me.

And the best man or woman is the one who is left standing after the fight for the favor of the consumer is over.

Choices by renjith krishnan
Choices by renjith krishnan | Source

Is capitalism the solution

Not really

As with all human endeavours capitalism is a solution to a problem humans had. The problem being how to produce the right product and get it to the person who needs it. It has become the one of the most far spread solutions in today's world but it is not the only solution for the problem of distribution and production. And although capitalists will say that it is the customer who decides what the market delivers, in reality it is the entrepreneur who decides what is sold in the market. The only vote consumers have in the market is:

Will I buy or not buy the product that is presented.

Only after the customer has voted a product out of the market, by not buying it, will the seller decide to try to find another product to sell.

So is capitalism the solution to the problem what to produce and to whom to distribute, no it is not. It is one of many solutions to solve production and distribution problems. But it is one of the best solutions humans have come up with for the problem of production and distribution of what customers might want to buy.

However the reason capitalism has become a success has more to do with the fact that it has coincided with the dissemination of democracy all over the world, then that it is the best way to solve production and distribution problems. Because democracy and capitalism have the same basic premise:

Do I have choices in products or ideas. And what are those choices.


Submit a Comment
  • Normyo Yonormyo profile imageAUTHOR

    Normyo Yonormyo 

    6 years ago

    @ProsperoX3: What you say is very true ProsperoX3, a pity not many more people see it your way.

  • ProsperoX3 profile image


    6 years ago

    Capitalism, because it allows anyone to pursue their own goals and thereby benefit the economy as a whole. In a capitalist society you don't need permission from anyone to develop an idea, even if everyone else thinks you're crazy. No, we're not all equal, but so what? We don't need to be. I'm not bothered if guys like Richard Branson and Bill Gates have got a few billion more than me, it doesn't hurt me any - they do their thing and I do mine, what's important is being a success on your own terms. Democracy's also good because it makes for an overall stable government system, but you can't have an effective democracy without an economy that's at least basically capitalist. Really, it's a false choice, you need both to live in a decent society.


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