[This blog is adapted from a series of replies I made on an X thread with someone opposed to, and attempting to define, capitalism. Note, this is not me promoting capitalism either – as many people mistake me for doing. This is an earnest attempt to explain why capitalism exists, so we can understand better how to counter it]
ME: Capitalism is the inevitable product of trade. When trade happens, wealth concentrates, wealth becomes power, power consolidates to maintain trade advantage, etc.
There are basically 3 options:
1. Cease trade
2. Tightly regulate trade
3. Render trade obsolete
Take your pick.
THEM: Trade existed millennia before capitalism — which is the historical convergence of private ownership of means of production and the institutionalization of particular financial relations and contracts.
ME: Yes. In other words, concentration of wealth and power. The fact that it took millennia is due to lower tech / communication / mobility, not because someone decided ‘hey, let’s do capitalism now’.
It’s OK to be angry about capitalism, but blaming billionaires is like blaming the winner for the race. In any fair trading situation, winners emerge. It’s mathematically proven. [see below]
Consider this: You make and sell a product for $100, then you find a way to make $1000 doing the same amount of work, then later a million dollars doing the same job. In a trading world, what rational person wouldn’t follow that path?
Someone gives you a house. It cost you nothing, but you don’t need it. You could sell it to your friend for $100k or you could sell it at market value for $400k. In a trading world, what rational person would choose the lesser option?
Now just think decisions like this, but everywhere, with everyone. Over time, winners emerge from that constant flow of trillions of transactions, then (understandably) use their winnings to consolidate their position.
Not everyone is Gandhi or Jesus. Almost everyone would act as billionaires act once given the same opportunity.
In my view, any examination of capitalism is pointless without understanding that it is merely a set of incentives that make wealth/power concentration inevitable. Who conquered who, or who subjugated who and when are just minor details that could have fallen a million other ways with the same net outcome.
A couple of articles showing trade as precedent to wealth concentration. Obviously, mathematical models are by their essence an over-simplification of reality, but the theory is sound: random, fair trading over time concentrates wealth.
https://scientificamerican.com/article/is-inequality-inevitable
https://tutor2u.net/economics/reference/what-are-some-of-the-key-ideas-of-economist-thomas-piketty
A video I made modelling random trade over time:
https://www.youtube.com/watch?v=qaASCnKNTmA
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