EDUCATORS ’ PERSPECTIVE
immediate aim of the capitalist ; nor must the profit on any single transaction . His aim is rather the unceasing movement of profit-making . This boundless drive for enrichment , this passionate chase after value , is common to the capitalist and the miser ; but while the miser is merely a capitalist gone mad , the capitalist is a rational miser . The ceaseless augmentation of value , which the miser seeks to attain by saving his money from circulation , is achieved by the more acute capitalist by means of throwing his money again and again into circulation .
Of course , it is never wise to leave the definition of a system to that system ’ s opponents . Many who are more sympathetic to capitalism have attempted to arrive at a more satisfactory description . For instance , Appleby defines capitalism as “ a cultural system rooted in economic practices that rotate around the imperative of private investors to turn a profit . Profit seeking usually promotes production efficiencies like the division of labor , economies of size , specialization , the expansion of the market for one ’ s goods and , above all , innovation .”
Sociologist Rodney Stark suggests that , “ Capitalism is an economic system wherein privately owned , relatively wellorganized and stable firms pursue complex commercial activities within a relatively free ( unregulated ) market , taking a systematic , long-term approach to investing and reinvesting wealth ( directly or indirectly ) in productive activities involving a hired workforce and guided by anticipated and actual returns .”
Finally , economist Deidre McCloskey argues that capitalism is “ merely private property and free labor without central planning , regulated by the rule of law and by an ethical consensus .” She , like Appleby , goes on to point out , “ Above all modern capitalism encourages innovation .”
This is the system that young people are questioning . Unfortunately , those same young people are usually unable to clearly articulate what they mean by capitalism . Thus their arguments against it are usually couched in general terms such as evil , greedy , materialistic or opportunistic . In denisk0
Portrait of Karl Heinrich Marx , who was critical of capitalism and described it as , “… the unceasing movement of profit-making .”
order for capitalism to evolve , adapt and achieve continuous improvement , its critics must propose well-developed arguments targeting specific deficiencies of the system . They should also suggest ways to correct these deficiencies . Lacking that , the only alternative is to call for an end to the system , which would be tragic .
The increasing antagonism towards capitalism is troubling . The first step towards resolving this problem is to develop a clear understanding of the issue at hand . The descriptions of capitalism offered by Appleby , Stark and McCloskey provide a good starting point for addressing capitalism ’ s role in our world . In upcoming issues , this column will examine the history of capitalism in order to identify its strengths and weaknesses . We will also consider whether capitalism is by its very nature a transitory economic system that will eventually lead to something better , explore the ethical nature of capitalism and weigh in on the role of government and society in a capitalistic system .
The young people who will shape our economic future need a balanced , informed understanding of capitalism .
Emotionally charged calls for ending the system should be taken seriously and met with calm , thoughtful responses . If there is a superior economic system , we should strive to develop it . However , history indicates that the alternatives to capitalism can be dark and foreboding indeed .
Brian Grinder is a professor at Eastern Washington University and a member of Financial History ’ s editorial board . Dr . Dan Cooper is the president of Active Learning Technologies .
Sources
Appleby , Joyce . The Relentless Revolution : A History of Capitalism . W . W . Norton & Co .: New York . 2010 .
Braudel , Fernand . The Wheels of Commerce : Civilization & Capitalism 15th-18th Century , Volume 2 . Harper & Row : New York . 1982 .
Ekins , Emily . “ Poll : Americans Like Free Markets More than Capitalism and Socialism More Than a Govt Managed Economy .” Reason . February 12 , 2015 .
Marx , Karl . Capital : A Critique of Political Economy . Penguin Books : London ; New York . 1990 .
McCloskey , Deirdre N . The Bourgeois Virtues : Ethics for an Age of Commerce . University of Chicago Press : Chicago , IL . 2006 .
Novak , Michael . The Spirit of Democratic Capitalism . Madison Books : Lanham , MD . 1991 .
Prout , James P . Review of Adaptive Markets : Financial Evolution at the Speed of Thought , by Andrew W . Lo . Financial History . Fall 2017 . 37 – 38 .
Sedláček , Tomáš . Economics of Good and Evil : The Quest for Economic Meaning from Gilgamesh to Wall Street . Oxford University Press : Oxford ; New York . 2011 .
Stark , Rodney . How the West Won : The Neglected Story of the Triumph of Modernity . ISI Books : Wilmington , DE . 2014 .
Steverman , Ben . “ Get Rid of Capitalism ? Millennials Are Ready to Talk About It .” Bloomberg . com . November 6 , 2017 .
Stokols , Eli . “ Socialism , Capitalism Seen in New Light by Younger Americans .” The Wall Street Journal . December 6 , 2017 .
12 FINANCIAL HISTORY | Winter 2018 | www . MoAF . org