Capitalism, the good bad and the ugly.

Capitalism is an economic and social system in which capital, the non-labor factors of production (also known as the means of production), is privately owned; labor, goods and capital are traded in markets; and profits distributed to owners or invested in technologies and industries.

The world without capitalism is: anarchy, monarchy, feudalism, or communism. In all the alternatives someone chooses for the individual.

In the ten thousand years of human existence those who controlled the land, and as we created machinery the means of production, are the people who became wealthy. And we established a well-understood system of ownership and written enforceable title to it. The great irony is that the land or equipment will not produce the advantage. People do. So why is there no people system? Well there is, it is called slavery.

For reasons not enumerated here slavery which worked for 9 thousand seven hundred and forty years was abandoned by most of the world. Well not really. We have found more subtle ownership of people. People become attached to objects that they are used to and which provides the necessities of life. They stay and do the work that is required of them. The feudal system literally bound “free” people to the land. What made it work is the lack of alternatives. With no education no one could understand alternatives even if they knew where it was. There was no way to get there because they owned nothing and everything in between was owned by someone else.

America was created first in concept with revolutionary thinking. And then with the flood of virtual surfs who first indentured themselves and then populated the land. And land was given to some of those. This disruption in the lineage of entitlement created the greatest wealth known to mankind.

Why, because the equation is not simply capital plus people. Ignorance trumps all benefits. The intelligent use of people and capital creates more wealth. Along with hard work, it is why one farmer grows hundred bushels and the other only 10 on the same acre side by side. Title is given to both farmers so that the intelligent use motivates both. The noble side of capitalism allows new people to have wealth and more importantly many more people to have wealth than any other system. Why because they make it, not that anyone can give it to them.

The bad part of capitalism is that entitlement allows people to be controlled. The feudal system continues on much more sophisticated ways. Debt has been the substitute for slavery for long before written history. The misuse of debt is called usury and it entered the moral vocabulary long before the literal ownership of people was abolished. Early Christians originally denied any interest at all to discourage the misuse. Jews created jubilee to rectify the implicit wrong of debt or ownership that extended for too long a period of time. We have codified this thinking in bankruptcy. And it is not by accident that seven years was the limit for indentured servitude and is the time limit for bankruptcy.

The ugly part of capitalism is monopoly. That is when one person returns to the virtual power of a king although within a narrow industry. It eliminates all the advantages of capitalism and obtains all the disadvantages. Extremely large corporations have those elements. And the self limiting nature of human’s who die does not apply to Corporations. And the self-limiting moral mandates have been systematically removed from law, especially over the last thirty years.

The problem is that we rely on lawyers to protect us. They rely on the written contract that does not clearly establish an inherent abuse. The real standard should be the probabilities of outcome, measured by outcome. If the result is not desirable it should be stopped. And we already know the outcome is not desirable.

We don’t need to establish principles; we know and understood them for thousands of years. We know the results and can measure them. We need to take action to interrupt the misuse of law that lead people to be indentured to servitude by debt.

Start by breaking up Corporations that are large by merger. Deny enforcement of contracts that lead to compounding of obligation that make debt proportionately larger than intended and disproportionate to the value purchased. Limit the enforcement of serial debt for consumer products. Regulate interest and all other charges for the forbearance of money. Freedom of choice does not include taking undue advantage of those who make poor choices.

The noble part of free choice is the creation value beyond what was formerly known. Creating more subtitle yet just as effective control of people leading them to poverty is what is being compensated for today in the form of bonuses to bankers. One well-known leader of the banking community, Marie Antoinette, was made famous for not understanding that fact.