Topic: What are the minimum prerequisites for Capitalism to be possible? - page 2. (Read 5545 times)

Other livestock, as well. "Look how rich he is! He's got five goats."

But money is important. It's easier to carry around than livestock, and with accepted ratios, easier to make change. Also, you don't need to feed it. Added bonus: you can bury it in the back yard, and dig it up a year later, still worth as much as the day you buried it. Try doing that with a chicken.

I guess live chickens are a valid form of stored value

Pre-money capitalism typically traded the chickens alive and kicking.

And, by the time the wrist slapping happened, Microsoft had already lost its monopoly status in whatever it was being sued for

You remember the huge action. What you don't remember is that George Bush got in and it ended up with a slap on the wrist (and that's stretching it) for Microsoft.

Still on page 1 but I didn't see it there...

Capitalism needs a store of value. It doesn't work exchanging  chickens for corn if  the chicken spoils and the corn rots. Sure, you'll eat well but it's only when you get to chicken jerky, feathers for decoration and dry storage for the corn that capitalism kicks in

"What are the minimum prerequisites for Capitalism to be possible?"

Not interfering with voluntary exchange.

Yes, it's too broad.  You need to read a bit further in to see the problem...
And then things get more detailed here...

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

While I do agree that capitalism describes an "economic system" the very use of that term implies a structured plan, presumedly by human planners, as opposed to a natural & emergent order that develops on it's own if not interfered with by governments or other third parties.

Does anyone have issues with this definition of Capitalism?
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. Elements central to Capitalism include capital accumulation, competitive markets, and a price system.

Bingo. At the core of it, Government is just a protection racket that is able, by virtue of it's willingness to commit violence, and it's successful propagandizing of it's "customers," to keep other rackets from muscling in.

The only reason I brought up corporations is because their purpose is specifically to increase profits, and thus market share. If I had simply said "the tendency of a capitalist business is to increase profits" I would have been wrong, since not all private business strives to increase profits or increase market share. Some are happy just where they are, since increasing profits or market share would result is more work than owners are willing to take on.
Carry on.

Interesting reading, but one question:

Some of you believe that the natural occurrence of a state to enforce rules regarding property rigts, trade practices, etc is a necessity.

But how is a state administration different from any big player? Do you define state as a monopoly with alturic motives or is it in reality just the largest dog in the yard who has a monopoly on Force, punishment or rewards to it's employees?

Every company has top down organisation, It's laws, punishment (monetary or exclusion), secrets based on your level in the organisation. They wage wars on the competition.

The argument that a state has monopoly to print money or collect taxes is in the end also about it's capacity to excert force on those who disagree.

So isn't government just the largest gang in town? or the single most suscessful corporate monopoly within it's country?

Capitalism -> Lending, and other options for using more capital than one could generate themselves and a market to sell the result to -> Wealth Generation and Better Products and Services -> More Leisure Time (you don't need to work 24/7 your whole life to work, you only need to work 8/5 for 40 years) -> Better Ideas -> More Ideas, Freedom, Agorism, Capitalism -> Lending for those ideas...etc.

This is how I imagine the cycle. So I guess in order for people to trade, they need more resources than they need to survive on average for a community. Thus, some elemental form of technology to allow people to produce more than with their own hands. However, even then people have, and would again, figure out tools and technology to make things better, even if it requires starving for a few days or waiting until there happens to be a large amount of food one season to eat.

Would your confusion be lifted if I substituted rational with logical? English is not my native language and I perhaps mistakenly treat those two as synonyms.

That doesn't make sense. If the concept of property ownership is rational, presumably there's some rational cause for it? I'm prepared to accept that property ownership might be irrational, e.g.: it's axiomatic and it "just is" or "it got made up because it's inherently true", but that's like saying that god "just is". No-one (in this thread or any of the other discussions I've seen) has ever presented a rationale for where the concept logically comes from.

You are misinformed about what capitalism is.

Pure capitalism is absolute freedom coupled with respect for rational property ownership. Consequently those are also the only two prerequisites you need for capitalism.

(definition of rational property ownership: ownership based in first principles supported with reason and not some illusion supported with violence)

While true, taken alone, that statement does not prove his premise; that monopolies are an equilibrium state of capitalism.  While you provide one reason why, another is the issue of corporations themselves.  Corporations, as they currently exist, are not natural organizations within the context of capitalism ( economic definition) while they probably are within the context of Capitalism (political ideology).  Corporations are, by their very definitions, legal fictions of a nation-state; and thus cannot begin to exist in the absence of a government.  Although the disappearance of the national government may not be fatal to a corporation, due to the probability that any large and well funded corporation could reasonablely function in the place of government within it's own sphere of influence.  Corporations are, in effect, the children of the state that begot them, and may not require the care of the state after a certain maturity and development.

Yet, corporations that operate within the same industry cannot peacefully coexist in the absence of the parental state, so in the case of the fall of that parental state, corporations can be expected to behave badly towards each other and their peers' resources.  Much like the brothers of a recently departed king.  Companies that are wholly owned, however, function as an extention of that owner's own will; representing him both in business and reputation.  While a CEO can shrug off accusations of criminal activity under his charge, because of the distribution of responsibility that the corporate structure cultivates; the whole owner is truly responsible for the wrongdoing of his employees while operating in his employ.  This is not a small difference.

Thus, the equilibrium point of capitalism is not a single monopoly, but two or 3 big players, keeping each other honest through market competition, with a pack of smaller guys nipping at their heels, ready to tear to shreds anyone who falters, and claim their market share.

Of course, this only applies for industries where the economies of scale tend toward big companies. Many industries favor smaller companies. You might get a local monopoly in those, but you can't stretch that very far, because if your prices get high enough that it's cheaper to go to the next town over, you lose your business.

Certainly, but nor is a government a pre-requisite.  It's not inevitable either.  I think that we need to stop and agree on a definition for what capitalism is, for the purposes of this discussion.  As far as I can tell, I am the only person in this tread to point out that more than one popular definition exists.  Also, almost everyone's own understanding of the term varies, even if it generally agrees with one or the other common definition.  Are we talking about the ideological or economic definition of capitalism?

To be fair, bonker is correct that monopoly is the natural tendency of a capitalist business; especially corporations. Since the point of business and capitalism is to acquire wealth, that often also means taking over an ever increasing share of the market. What bonker is missing is the fact that it's impossible to take over 100% of the market in anything for any extended period of time, due to competition and substitution (Coke tries to get a monopoly > Pepsi provides competition AND Tropicana Orange Juice provides substitution > Coke is forced to lower prices)