What is capitalism?

An extremely arrogant business consultant I once had the pleasure of working with told me the secret of capitalism and I’m glad he did.  It took awhile for the weight of what he told me to set in.

Some people equate capitalism and greed, selfishness or robber barons or priveleged, rich folks taking advantage of the poor.  They don’t understand that all of these exist without capitalism. 

Others think of capitalism in terms of it’s textbook definition – the private ownership of capital. 

These ways of thinking of it miss the subtle power of capitalism.

Capitalism allows for a voluntary and willing exchange between two individuals where both sides come out ahead, in other words, where both sides gain value.

I encounter few people who think of capitalism like this  They never stop and ponder why they buy the stuff they buy.  They assume that whoever gets the money gets the value.  They never consider that the only reason they bought a bottle of mouthwash is because they value the benefits the mouthwash provides more than the $4 they gave up.

Think about the stuff you buy.  If you don’t value what you get in the trade more than what you give up, then why do you trade?

Now, multiply the value created on both sides of each trade by all of the willing and voluntary trades that take place under capitalism and you get A LOT of value. 

So, what is value?  More on that later.


A couple more nuggets from Mark Steyn

Mark Steyn on gun control, from America Alone:

New Hampshire has a high rate of firearms possession, which is why it has a low crime rate.  You don’t have to own a gun, and there are plenty of sissy arms-are-for-hugging granola-crunchers who don’t.  But they benefit from the fact that their crazy stump-toothed knuckle-dragging neighbors do.  If you want to burgle a home in the Granite State, you’d have to be awfully certain it was the one-in-a-hundred we-are-the-world panty-waist’s pad and not some plaid-clad gun nut who’ll blow your head off before you lay a hand on his seventy dollar TV.  A North Country non-gun owner might tire of all the Second Amendment kooks with the gun racks in the pickups and move somewhere where everyone is, at least officially, a non-gun owner just like him: Washington D.C., say, or London.  And suddenly he finds that, in a wholly disarmed society, his house requires burglar alarms and window locks and security cameras.

And, finally, a last bit about war:

“…as the great strategist of armored warfare Basil Liddell Hart wrote: “The destruction of the enemy’s armed forces is but a means – and not necessarily an inevitable or infallible one – to attainment of the real objective.”

The object of war is not to destroy the enemy’s tanks but to destroy his will. 

America is extremely good at destroying tanks.  If you make the mistake of luring the United States into a hot war – i.e. tanks, bombers, ships, etc. – you’ll lose very quickly. 

Wars fought under absurd degrees of self-imposed etiquette are the most difficult to win – see Korea and Vietnam – and one lesson of Germany and Japan is that it’s easier to rebuild totalitarian states if they’ve first been completely smashed. 

So, in the last passage he’s saying that the U.S. is great at destroying the enemy’s armed forces, but not so great at destroying the enemy’s will.  In fact, the U.S. has been very good at bolstering the enemy’s will. 

Corrosive nature of making secondary impulses top priority

And another (from America Alone) by Mark Steyn:

To understand why the West seems so weak in the face of a laughably primitive enemy it’s necessary to examine the wholesale transformation undergone by almost every advanced nation since World War Two.  Today, in your typical election campaign, the political platforms of at least one party in the United States and pretty much every party in the rest of the West are exclusively about those secondary impulses: government healthcare (which America is slouching toward, incrementally but remorselessly), government day care (which was supposedly the most important issue in the 2006 Canadian election), government paternity leave (which Britain has introduced).  We’ve elevated the secondary impulses over the primary ones: national defense, self-reliance, family, and, most basic of all, reproductive activity. 

 A government big enough to give you everything you want is big enough to take away everything you have, starting with your sense of self-reliance.

Military Welfare

Here’s another gem from Mark Steyn’s book America Alone:

The United States has the most powerful armed forces on the planet.  The fact that Washington’s responsible for 40 percent of the planet’s military spending pales in comparison to the really critical statistic: it’s responsible for almost 80 percent of military research-and-development spending, which means the capability gap between it and everyone else widens every day.

As for America’s “friends,” there’s another paradox of the non-imperial hyperpower: the United States garrisons…its wealthiest allies, thereby freeing them to spend their tax revenues on luxuriant welfare programs rather than on tanks and aircraft carriers…  Like any other welfare, defense welfare is a hard habit to break and damaging to the recipient.  The peculiarly obnoxious character of modern Europe is a logical consequence of America’s willingness to absolve it of responsibility for its own security.

Why I get to eat king crabs

Here’s a nice nugget from Walter Williams from his most recent weekly column:

I think it’s wonderful that Alaskan king crab fishermen take the time and effort, often risking their lives in the cold Bering Sea, to catch king crabs that I enjoy. Do you think they make that sacrifice because they care about me? I’m betting they don’t give a hoot about me. They make it possible for me to enjoy king crab legs because they want more money for themselves. How much king crab would I, and millions of others, enjoy if it all depended on human love and kindness?

Read the whole column by clicking here