the word "capitalism" // Show more
'capital' (im the economic sense) comes from the Latin word 'caput', meaning head, as in "heads of cattle"
'capitalist' meant someone with a lot of capital either literally, having many heads of cattle (or of chattle -- slaves), or more broadly, having a lot of land, a factory, a business, or simply enough money to purchase such things.
the word 'capitalism', as an economic system, doesn't show up until 1850 (according to Wikipedia) (Das Kapital was published in 1867)
live memes re: capitalism (2) // Show more
alternatively, in the same way that sexism holds that men are more important than -- and should have power over -- everyone else
and racism holds that white ppl are more important than & should have power over everyone else
capitalism holds that (people with) big piles of money are more important than (and should have more power over) everyone else
[check out those clauses!]
capitalism, the idea // Show more
capitalism as an idea is often bundled with
-- a free market
-- relatively little government involvement
capitalism is not these things. they can be had without capitalism, and neither does having capitalism guarantee those things.
ex: apartment buildings are capital that can be owned, and rented out for a profit. some places have rent control regulations. it's clearly not a free market if prices are set by fiat, but it still values capital investment.
capitalism adjacent examples // Show more
Consider a village where, rather than owning farmland, the convention is that anyone can till & plant in the surrounding fields (using equipment & seeds held in common). Whatever you grow and harvest is yours; you can sell any or all of it at market.
This is still a market economy; the price of crop X is determined by supply and demand, and ppl will attempt to grow more of crops in high demand, b/c they can be sold for more. But it'd be hard to call it capitalist.
capitalism adjacent examples (2) // Show more
Now say that village reaches the point where there's not enough farmland to go around & they need a system to decide who can use what plots
if they decide Alice owns it cuz she did the king a favor, that's feudalism
if they auction off individual plots, that's capitalism, b/c the people with the biggest piles of money get to pick bigger & better plots than ppl with more modest piles of money, and ppl w/o any piles at all get zilch.
capitalism adjacent examples (3) // Show more
under the original system, the way to get more money is to plant and grow more crops, or to increase yield with better farming techniques, or plant more desirable crops
those things still work at the individual level once the land becomes privately owned, but now a more scalable strategy exists: own lots of land, more land than you can plant yourself, and hire ppl to farm it for you. Or charge ppl a fee to grow their crops on your land.
capitalism adjacent examples (4) // Show more
the first strategy is arguably merit-based, at least among those able to farm: more skilled and harder working farmers make more money.
It also doesn't scale. There's only a finite amount of crops one person can grow in X period of time, up to the constraints of current technology. If you want to make 10x the money, but you don't have the capacity to grow 10x the crops, you can't.
But w/ the second strategy, there's no limit. If you want to make 10x, just buy
capitalism, exponential growth // Show more
With capitalism, if you want to make 10x as much money, you just need to have 10x the capital. Purchase 10x as much farmland and hire 10x as many workers. Just take your money and use it to buy more money. Don't worry about employing more workers than you can keep track of - you can hire HR and managers. Hire people to handle the actual buying of new land. Heck, hire people to expand your business into manufacturing / logistics / retail / etc. Grow exponentially.
capitalism, exponential growth (2) // Show more
(Realistically, a fast-growing startup might double in size every year at first, and a mature company might grow at 1.5%~3% per year. Even growing at 3% a year is still exponential growth.)
As an individual, you can earn more money by acquiring high-demand skills. Go to med school. Learn how to code. You actually can advance that way.
But, no matter how good your code, you're never going to have a fraction of the wealth of someone who owns tech companies.
capitalism, workering vs. ownership class // Show more
You can be the most highly skilled worker in the world - say, the best neurosurgeon, saving the lives of people nobody else could, inventing new techniques and categories of surgery that make your entire field of medicine more effective - and you're never going to have a fraction of the wealth and power of a bloke who just happened to inherit a sufficiently large number of hotels and apartment buildings. You're playing at different scales.
Capitalism is the grey goo scenario of socioeconomics. Exponential growth consumes everything.
capitalism, exponential growth (3?) // Show more
Exponential growth doesn't start slowing down until it starts pushing up against the carrying capacity of the environment (at which point it isn't really exponential any more, I guess.)
This is how we end up with deforested *continents* - lumber companies make money, use that money to buy/hire more lumber company, ad infinitum until the lumber is *gone*. Now it's all boats sailing to a new continent so the shipyard owners can build more shipyards.
afterthoughts to previous, Great Leap Forward // Show more
…and that's why it's disingenuous when tech companies say people can beat inequality by learning to code.
was going to put this point in earlier re: capitalism ≠ competition but my example got away from me:
Competition is not unique to capitalism. Communist China had competitions like "which village can bring in the harvest first" or "which village can recycle the most metal" (which lead to sloppy harvests leaving food in the fields, are
Great Leap Forward (2) // Show more
and melting down metal things people actually needed, from cookware to farm equipment, and eventually to maybe the worst famine in history?)
(Not that corporations don't occasionally implode from incentivising ppl to compete for the wrong thing, they just mostly tend to be smaller than China. Notable example is that whole subprime lending collapse where co's valued quantity over quality to the point of making loans that had no chance of getting paid back)