In Defence of Capitalism

Capitalism gets a bad rap these days. Folks find our economic system to be a convenient thing to blame for inequality, inquity and other social cohesion challenges. I have a many thoughts on this topic. Below is inspired by Ralph Waldo Emerson's quote on the human constitution. I do not expect everyone to agree with this. It's just a perspective from a businessperson who attributes his success to a system that rewards innovation.

Every human consumes. Therefore, every human ought to produce. To produce requires skill. Acquiring skill demands focus and the development of expertise in a few key areas. Having expertise in a few areas means lacking expertise in most other areas of life.

Since it is impossible to be good at everything, humans must trade to maximize their prospects for continued life. Trade involves the exchange of values between individuals, allowing experts in one field to trade with experts in other fields. Before these values can be traded, they must be created or arranged for delivery under mutually agreeable terms.

A created value must first be owned by its creator, not by some other party who did not contribute to its creation. The exchange of values requires a tool of exchange, enabling producers of many small units of their creation to purchase fewer, larger units of another’s creation. This tool of exchange must be durable so that it can be safely stored. The exchange medium must outlast the temporary lifespan of the goods or services sold.

By converting production into a safe, storable token, a producer can preserve their work for future use—whether to take a break from producing or to sustain themselves during periods when production is not possible. Producers must establish mutually respectful and agreeable terms of exchange. They must also be assured that their work is neither pilfered in small ways nor stolen outright.

Producers must have the ability to negotiate value trades with others without interference from non-benefiting third parties. They should also have the freedom to redeem stored value tokens or allow them to accumulate by their own choice. If accumulation occurs, it should be respected that the producer may then take an extended break or reinvest their wealth into automation to enhance production capabilities.

A producer should always be able to employ others through trade relationships based on structures they have built or purchased. Some producers will naturally excel as managers, organizing trade processes efficiently. Management itself is a form of value creation, as it enhances efficiency, coordinates collective efforts, and empowers all involved to benefit from structured trade.

Capitalism: The System That
Respects Human Nature

As Ralph Waldo Emerson described, humans are inherently expensive by their very constitution. Therefore, they must produce to sustain themselves.

Throughout history, only one system has properly respected this fundamental aspect of human nature: capitalism.

Some traders may engage in bribery to create unfair trade systems, exploit others, steal, obstruct production, or accumulate more wealth than others deem appropriate. However, these problems do not invalidate the fundamental rightness of capitalism. Why? Because all forms of human misconduct occur in every system of human interaction.

One should not throw out the baby with the bathwater.

Wealth is not a zero-sum game. The fact that once-empty fields now hold subdivisions worth millions of dollars—inhabited by people who require services and infrastructure improvements—demonstrates that future production is always necessary. As long as human life continues, the demand for production and trade will remain.

I would love to hear your thoughts on this.

- Paul

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