- Jane Ginn’s Resume
Now that we are in the early stages of the greatest economic contraction since the fall of Rome, there is a plethora of newly minted, printed junk about how capitalism has failed. Often the words “unbridled” or “deregulated” are thrown into the mix, but the thrust is the same – we need more and smarter reins on the inherently unstable capitalist system.
The writers of such drivel never actually define capitalism or inquire whether we actually have a capitalist system today. Let me be the first you have read to do just that. Capitalism is properly defined as:
An economic system based on a free market, open competition, profit motive and private ownership of the means of production. Capitalism requires private investment and business, compared to a government-controlled economy.
You may have other ideas, but this is the definition I will use here. One of the things that I find offensive about this definition is the necessity of using the redundant phrase “free market”. In the context of capitalism, a market is by definition free – where transactions are un-coerced. If transactions are “regulated” then they are not un-coerced and therefore not market transactions.
This should give you a hint that inquiring into the character of today’s economy in the U.S. will not yield “capitalism”. Let me count the ways in which we have long since said good-bye to capitalism:
I could go on far longer than you would continue to read this article, but I think this gives you the basic idea. In fact, we live in a state of democratic fascism, which is the actual system that is collapsing before our eyes. It has been nearly a century since we could claim our economy bore any resemblance to capitalism.
A major myth about capitalism is that is characterized by a business cycle. In fact, there is no such thing. What we commonly call a business cycle is a government induced credit cycle. Nearly all of the economists who write about this subject and virtually all politicians (only one exception) are clueless or worse.
If you would like to begin a journey to understand what happened to our economy, and why it happened, you must read books written by authors that understand what capitalism really is and how markets really work. That is not easy because there are so few. Fortunately there is MELTDOWN by Thomas Woods. It is short and written in plain language. It succinctly explains why the world economy tanked, and contains some wonderful illustrations in explanation of the workings of a market economy and how booms and busts are created by political action, not by capitalism.