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> I don't know, I view capitalism mostly as a way to allow people who have money to make more money without providing work or value from people who do work

Well, that's not how capitalists view it, quite the opposite. In a free market economy, which relies on voluntary interactions, the only way to make money is to generate value for others. Take me buying a loaf of bread: To me the bread has more value than the money I give to the baker, otherwise I would not agree to the interaction. To the baker OTOH the money has more value than the bread, otherwise he would not agree to the interaction. Free markets are a positive-sum game.






Free market capitalism doesn't really exist. The baker is the only baker in town, and could choose to increase prices and become filthy-rich (but doesn't, because he's a nice person). There are government regulations preventing me from setting up my own bakery without jumping through hoops – which is just as well, because if I could set up a bakery, I'd be selling people flavoured mud, sawdust, and plaster dust (zero-calorie bread: tastes just like the real thing!).

Mutually-beneficial transactions are a good description of what's happening, but that's not a description we can use to do systems-level thinking, because it's not what's "really" going on.


> but doesn't, because he's a nice person

He doesn't, because he would quickly loose all his business to the competition, and if there was none, there quickly would be - unless government force provides him with an artificial monopoly.

"It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages."

- Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations


The trick is that a very small number of people confiscated most of the wealth and their "added value" is releasing some of that wealth to those who were not lucky enough to have any wealth. I think I could be fine with a capitalist system where wealth is spread evenly (which should involve abolishing inheritance for example, but not only)

That's called liberalism. Literally liberalism.

Capitalism posit that capital owners, not labor, decide what should be produced by a company, and how it should be produced. That's all.


Capitalism posits that it should be legal to privately own capital goods. If I own something, that makes me the one who decides what to do with it.

There are systems which recognize private ownership which are not capitalists.

Capitalism is just about the full control of means of production and of companies by capital owners as explained by your parent.


Do you own a hammer? Well, that's a capital good, so you're a capitalist! Congratulations!

If that hammer is the mean of production of some company and as a result of owning the hammer I can get all the profits of the company, while doing no work and the people doing the actual work with the hammer get only low wages , then this is indeed capitalism :)

The hammer allows the worker to be more productive than he would be without one, so he chooses freely to team up with the hammer-owner for a share of the additional value created by using the hammer.

The endlessly repeated "but all muh profit goes to the evul capitalist" thing is logically nonsensical, as whatever share of the additional surplus generated by the hammer goes to the capitalist is by definition the capitalist's profit, however small. So you essentially demand to be handed someone else's property for no compensation at all, as that would be the only way for there to be no profit for the capitalist (if indeed, the product is successfully sold at all).

The capitalist, who by the way is the one who invested not only in the hammer but in the raw materials needed for production, and who shoulders all of the risk and delayed gratification, while the worker gets a risk-free, immediate income, before the company even earns it's very first cent.


Yes, once again I think it's all fine, provided that people who did not provide any value to anyone are not allowed to own all the hammers, which implies at least abolishing inheritance. "Choosing freely" when the choice is "use my hammer or die, because btw my ancestors got all the hammers" is not choosing freely.

Exactly, i think you read way too much into what i said. I'm not saying it's bad or anything, i'm saying that's the definition. Capitalism is a production method where capital owners decide what should the labor do, unlike anarchist worker councils, or feudalist lords. But capitalism say nothing on free trade, absolutely nothing. You can be a communist country or an anarchist commune and implement free trade. I'm pretty sure native mexican communes are allowing free trade (because if they didn't Mexico would likely do something about it), despite having a non-capitalistic method of production (which sometime is feudal, which is to me the worst system of production, once again, i clearly never stated capitalism=bad, i'm just saying capitalism != free trade)

Okay, the part of "free markets are possible without capitalism" is quite obvious. But going back to the earlier messages, what happened is that I assumed that capitalism implies free markets (not the other way around), and that's not equally trivial.

I think capitalism at least implies markets, because otherwise it makes no sense at all. Who would care to specialise in the production of any good if there was no way to profit from it by offering it on a market?

But does it imply free markets? That probably depends on where you want to draw the line between free and non-free. Personally, I'm a purist in these matters. There does not currently exist any market that I know of, which I would consider to be really free. So by my standards I assumed too much in my original statement.

In public discourse though, I usually try to adopt a choice of words more compatible with what I estimate is the prevailing POV, as it eases communication. By that standard, there exist plenty of free markets, and maybe the claim could be made that capitalism does imply free markets, unless one is happy to have discussions about nonsensical constructs.


This is much more interesting than the previous discussion! I honestly never thought of it this way.

I will try to answer with a question: what was proto-capitalism?

People talk about mercantilism but I disagree. I'll explain: you bought a share off a boat trade (often slave trade, let's be clear) and got a share of the profits. Multiple to hedge. At the time, you didn't had free trade between nations (the concept of nation was in the process of existing at the time), and tariffs, and a lot of different taxes. You also couldn't sell your shares. If you were the main buyer however, you could choose the trip rough beginning and initial trading goods, but during the journey, the captain made all the choices. Often he traded with his preferred trading post. Was it capitalism? The captains and first mates had as much power as the owners, if not more, so I would say no, but we could disagree. So for now: no market, no capitalism.

Thinking a bit more about late mercantilism, I now think (writing this) that capitalism really started with 'joint-stock' companies. And, with all respect to the 'muscovy company', that really begins with the English 'east India company', which would be considered today state capitalism. Captains still had power while on the sea, but way less than Mediterranean captains. They had to stop at specific trading post, depart on specific days (and not month). They did not choose all of their crew, and relied on the royal navy to defend them. They could use bigger, less armed ship, do more efficient trips, at the cost of a bit of freedom for captains. I'm not sure anybody could buy a share though, but I think that's still capitalism. So for me, the response is no: you don't have to have a market to have capitalism.

But it clearly isn't a final answer.


> i think you read way too much into what i said

Well, it seems like I really may have done that. I actually hadn't even noticed that my interlocutor had switched inbetween.

> i'm just saying capitalism != free trade

Right, unfortunately it's very late and I think I need a clearer head for an adequate answer.




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