a distinction that Wall Street doesn't want us to make

[paulkienitz]

Last edited Sun May 3, 2015, 08:28 PM - Edit history (1)

We usually hear the terms "entrepreneurship", "free enterprise", and "capitalism" lumped together as if they're all the same thing. But they aren't. They are three separate things.

Entrepreneurship is when you start a small business and hope it can expand beyond mere self-employment. Free enterprise is open competition without barriers or protections. And capitalism... that's when an investor or speculator takes ownership of other people's productivity, in exchange for cash they may or may not actually have.

Why do these three always get conflated? Because capitalists want what they do to seem as valuable and legitimate and necessary as entrepreneurship and free enterprise are. Because they want you to think they're job creators -- a description which is valid for entrepreneurs. Because they want us to see their games as being about freedom and openness, instead of as a narrowing of power and privilege.

Don't buy it. We respect free enterprise and entrepreneurship, but that doesn't mean we have to respect Wall Street's version of capitalism. It's not at all the same thing.

[JustAnotherGen]

1. I don't agree with the definition of capitalism - I think?

Or are you saying that the definition you ave is what the banking and investment industry want it to be?

[paulkienitz]

2. the basis of that definition

Remember that "capital" does not mean money, it means productive assets. Things like factories and herds of cattle are capital. So are patents. So are stock shares, in practice: they're a way of aggregating more concrete items of capital for ownership purposes. The basic definition of capitalism is that it's the system where capital is privately owned and traded. When capitalists trade shares of stock, what they're trading is partly assets such as buildings, but that's minor -- except in the extractive industries, most of the real value they're trading is the future productivity of workforces. So the way I defined capitalism may be simplified and de-nuanced, but in practice I think it's mostly valid.

[Enthusiast]

3. K&R! It is in their interest to muddy the water. They are doing a fantastic job of it.

Last edited Tue Apr 28, 2015, 07:50 AM - Edit history (1)

[URL=.html][IMG][/IMG][/URL] [URL=.html][IMG][/IMG][/URL]

[phantom power]

4. another pair of lumped terms is capitalism and democracy

One is a political system, and the other is an economic practice. There's no reason you can't have a socialist democracy, or a communist democracy. But most people are happy to smear anybody advocating socialism or (gasp!) communism as also being un-democratic.

[pampango]

5. They certainly are not synonymous. The is danger in having control over jobs/wages in the same hands

as control over government. If capitalists "control" who gets elected to the government office there is obvious potential (and actual) abuse in the government-employment relationship due to lax labor laws and enforcement at the behest of the controlling capitalists.

It is, at least theoretically, possible that a socialist government could use its direct control over employment/wage decisions to reward or punish people for political activities. I don't think that is nearly as likely as the danger of capitalist influence on a democratic government but the potential does exist and would have to be addressed in a healthy socialist democracy.

[paulkienitz]

6. yeah...

There's all kinds of other disingenuous lumping-togethering that gets done when someone wants to defend stuff they do... democracy = the two party system, free enterprise = deregulation, liberty = not paying taxes, and weirdest of all, capitalism is Christian.

[lostnfound]

7. "The Divine Right of Capital" says modern capitalism equivalent to subsidized gambling or feudalism

Makes point that only a small percentage of market cap is true invested capital -- I.e., via IPO's or special stock offerings or initial investment of owners. Most of market cap represents growth due to perceived value of earnings, and the shares of stock represent entitlements to the yield of the corporation, analogous to the Divine Right of Nobles being entitled to the proceeds from feudal estates.

It's an interesting paradigm.