week, a popular New Age author, Marianne Williamson addressed Occupy
LA. Normally, I ignore New Agers, but this one is trying to
establish a Department of Peace. That was enough to get me to
watch her video:
Part way through, though, I was starting to get irritated. She didn't
hone in on the point, and just seemed to be talking a lot without
saying anything. Then at the end, she said that capitalism is
morally and ethically neutral. I blew my top.
I happen to belive that capitalism is amoral and encourages
greed. I don't think it's ethically neutral either.
Then she said that a fruit stand is capitalism. That was the last
straw. That's why you're reading this now.
The definition of capitalism from dictionary.com is:
economic system in which the means of production and distribution are
privately or corporately owned and development is proportionate to the
accumulation and reinvestment of profits gained in a free market.
This is a good definition of capitalism. Let's break it apart:
An economic system in
which the means of production and distribution are privately or
In a capitalist system, the means of production are land, factories,
offices, tools, computers, etc. They're privately or corporate
owned, meaning that they belong to individuals or to corporations. A
corporation is a specific type of organization that operates a
business. The key point is that the businesses are private
The businesses don't belong to the state, and they don't belong to the
Second, the definition states:
proportionate to the accumulation and reinvestment of profits gained in
a free market.
This isn't quite right. The word "free" should be removed,
because all capitalist markets are regulated, and there are some people
who would say these markets aren't really "free". But, within a
typically regulated market in the US, it's pretty "free" - the rules
are the same for everyone, and barriers to entry aren't too rigged.
In a capitalist market, development is related to accumulating and
reinvesting profits. This is the main quality of a capitalist
system, as distinguished from other systems -- it's that money is
invested into businesses, profits are taken, and then the money is
re-invested into businesses.
More importantly, the amount of money you can get affects the amount of
business you can conduct, and the amount of profit you can gain.
So people with more money are better able to succeed economically in a
To illustrate this, consider two businesses: a fruit stand,
and a supermarket
Starting a fruit stand requires very little money up-front. Even
a laborer could save the money required to open a fruit stand.
A supermarket requires a lot of money, and would require a bank
loan, investors, or an extremely wealthy owner.
A fruit stand can be operated by one person when it opens. It may
take a while for business to get going, but the ongoing expense is only one person,
A supermarket requires a large staff. It may take a long time for business to
start making money. During this time, the expenses are high
Staffers need to get paid. A lot of food can go to waste if the
power bill isn't paid. Then there's the mortgage on the
half-city-block worth of land.
When a business lacks enough cash to operate at a loss for a while,
it's said to be undercapitalized
An undercapitalized business will fail for lack of cash.
It's possible is that the fruit stand, if successful, will find
competition from a new supermarket nearby. In this situation, the
fruit stand can be crushed - and the banks won't help keep the business
afloat, because the supermarket is likely to permanently harm the fruit
stand's profits. Investors may even give loans to the
supermarket, in the hope that the fruit stand is crushed and the
supermarket can have a monopoly on selling fruit.
In a capitalist system, the amount of capital you can amass
matters. So, in a capitalist system, you need credit, banks,
bankers, and investors. These banks and bankers become extremely
important because they become experts at investing in businesses.
Capitalism is not "neutral" as Williamson asserted. Indeed, it's
not only biased, but it virtually requires banks and capital to seek to
invest in capital-intensive firms that can compete with, take over, or
destroy undercapitalized small businesses.
There's more to capitalism than what's described above, but they're
beyond the scope of this argument.