Topic: What are the minimum prerequisites for Capitalism to be possible? (Read 5524 times)

The OP question was about minimum requisites. If you are interested in the definition of capitalism, one can be found in wikipedia also

http://en.wikipedia.org/wiki/Capitalism

Capitalism is an economic system that is based on the private ownership of capital goods, or the means of production, and the creation of goods and services for profit.

Obviously, this can be discussed ad infinitum.

In a modern society:

1. It must be allowed to own things. You own yourself, your things and your work capatity. This includes capital goods, also sometimes called the means of production.

Lots of common rules reduce this. Some things you can not own, and some things are taxed, some things can not be imported and so on. In my country, a land owner does not own metals over a certain specific weight. If you can not give your wealth to your children when you die, do you really own it?

2. There must be freedom. You are free to sell things, buy things, give away things by your own choice.

Lots of common rules reduce this, like income tax, sales tax, tarrifs. You are forced out of work beacuse of a union. You can not cut someones hair unless you have a special costly education. You can not trade your work because of minimum wages.

3. Everybody is allowed to make his/hers life better, as defined by oneself. Consequently, some must be allowed to be more wealthy than others.

The ultimate progressive income tax, would reduce effective wages to the same level.


In sum, capitalism is everywhere (may be not in North Korea, I don't know for sure), but is also repressed everywhere to some degree.

The effect of capitalism is that everybody can achieve his maximum living standard (as defined by himself). In addition, the saving and investment, and division of labour will increase the productivity of labour, for the benefit of everybody.

There will be difference of wealth, but it is not clear that the current system of reduced capitalism better spreads the wealth. Subsidies of certain industries including banks creates large differences, and morre importantly it reduces the ability of the market to maximize utility.

Therefore, maximum capitalism, which is minimum regulations, minimum taxes, minimum government spending will create maximum wealth.

Using sound money will support capitalism, since it will take the inflation tax away from governments, take away the governments ability to manipulate the interest, and will make it easier to calculate profit and loss in business.

The Hollandische Mercurius uses capitalists in 1633 and 1654 to refer to owners of capital

From wikipedia
http://en.wikipedia.org/wiki/Capitalism#Etymology_and_early_usage

And that is exactly what I've been trying to say.  The very word "capitalism" did not exist before it's use by Karl Marx, and it entered common use only in contrast to the economic system he also defined as "communism".  Capitalism, even just as a contrast to communism, is simply the macro appearance of the many laws of economics when individuals are (generally) left to make their voluntary arrangements without third party (governments & other criminal organizations) interference.  The degree to which the people are left alone is also the degree to which a society is "capitalist".  And unlike just about every -ism that I'm aware of, capitalism doesn't require widespread agreement with and/or compliance with it's edicts.  In short, capitalism (from an economic perspective, not a political one) is the default condition of any society, while undisturbed by war or politics.  

The absence of any form of modern, operational government?

Shortcut to the answer: Is theft consistent with capitalism. I guess it depends what your definition of consistent is. Remember, there was capitalism even in communism. In many ways, it's incorrect to call capitalism an ism.

Well, lets add to the list then. I think a concise definition may be difficult to pin down. Actually now I'm interested in the social net question. Can there be a government funded social safety net consistent with "capitalism"? I'll make a spin off thread.

I think you've clearly defined the maximum level of government that will not interfere with capitalism (at least not much), but you've not really touched the definition of capitalism, nor the minimum requirements for capitalism.

I'm thinking, the minimum prerequisites are:
1) No central bank.
2) Only tax is a sales tax that is the same percent of all purchases.
3) Taxes are only used to fund defense and justice system.

Perhaps some kind of safety net could be devised that also would allow capitalism as well, I'm not sure on that one.

Edit: 4) No entities that get special justice systems (i.e corporations)

Even what Russia had wasn't actually communism... 

+1

80% of debate between intellectually honest people can be solved by defining the terms.

After reading through this thread I still have absolutely zero clue what "capitalism" means.

The only clear thing about it is that nobody is using the same definition.

You can measure things like time that takes to do something and amount of labor or effort needed for it, which is required for single person capitalism. You can't really measure your spirit or mood.

Capitalism already exists in biology. Cells trade resources with eachother. Look inside yourself

You can't really give someone your spirit or qualia. You can't even measure them. And if you can't measure them, there's no way to assign a value to them.

Because I like to live in the world described by physics, not in faerieland.


I have never seen such naked mysticism attempting to masquerade as science.

At the most basic level, there are three types of capital: Time, Space, and Matter (Energy). Physics tells us that Matter and Energy are interchangeable, so I'll just treat them as the same thing: Matter. Physics also tells us that space and time are fundamentally interlinked, but practically we treat them very differently, so I'll keep them separate, but it may help to remember that Time is essentially just a 4th dimension of Space, albeit one we are extremely limited in our ability to traverse.

When we are born, we are granted some of this capital: an amount of Matter that comprises our bodies, and an unknown amount of Time. In order to gain anything else in the world, we must trade some of this capital, hopefully to our benefit. The first 18 years of our life are traded for the skills we will need to extend the rest of our time as much as possible. Perhaps your parents have granted you some Space, but more likely, you'll have to trade some of your precious Time for it, and for the Matter you will need to keep your own Matter chugging along.

Money makes this process easier, and more efficient, because instead of working directly for your landlord, or grocer and trading groceries for your rent, you can do something else, and use money to buy your groceries and to pay your rent. Money is an abstraction, and a convenient store of value. You could simply buy a lot of Space or Matter with your Time, and sell it off as needed, but it's much more efficient if you have an abstraction of value.

All you really need for capitalism is your body, and a willingness to trade some of your time for something of value.

I would say it has to be at least medium term for capitalism. You gots to have the capital itself.

Yes, but that store need not be long-term. Did you play that island game MoonShadow linked to? You get to "keep" the excess value in the form of a better meal.

I guess the point I'm not really getting at very well is that it's not enough to have stuff, it's not even enough to have enough stuff to trade, capitalism requires that it be possible to keep the excess of value that is created in that trade.