By William Irving
Capitalism is in the news a lot, in the news shows and in (electronic) print. I thought it might be a good time to remind everyone of the origins of the word and what it practically means.
Academic Capitalism definitions
"Capitalism is an economic system based on private ownership of the means of production, used to make a profit. It typically includes competitive markets and capital accumulation (reinvesting capital to grow productivity)." Search Assistant
The initial use of the term "capitalism" in its modern sense is attributed to Louis Blanc in 1850 ("What I call 'capitalism' that is to say the appropriation of capital by some to the exclusion of others") and Pierre-Joseph Proudhon in 1861. [9] Wikipedia on Capitalism
Karl Marx frequently referred to the "capital" and to the "capitalist mode of production" in Das Kapital (1867). [16][17] Karl Marx Wikipedia
Due to the word being coined by socialist critics of capitalism, economist and historian Robert Hessen stated that the term "capitalism" itself is a term of disparagement and a misnomer for economic individualism.[19] Wikipedia
Bernard Harcourt agrees with the statement that the term is a misnomer, adding that it misleadingly suggests that there is such a thing as "capital" that inherently functions in certain ways and is governed by stable economic laws of its own.[20] Wikipedia
Opinion and Simplification
Above are academic definitions of "capitalism" and the word originated approximately in the mid-1800s.
Let us simplify the history of the word. Karl Marx's theory has popularized the word in modern days and it is used in a negative meaning. In the practical world, let's use the word trade instead of capitalism. Substitute trade in place of capitalism and the meaning is not negative anymore.
The person who has capital has bought or made an item to sell. That item had to be bought with cash or labor. I assume cash or labor can be considered capital. A customer would be the one who wanted to buy the item happily in a balanced trade of a fair price. I would call this a free trade. It is capitalism. Capitalism should be a positive word. Anything other than a fair trade I consider coercion. Coercion would be if the seller is forced to sell at a lower price than they want or the buyer is forced to buy at a higher price. We all know governments can do this.
Cities and towns are founded on trade. Let us not forget our local founding. We all want more trade for our cities as we want more wealth in our areas. If we wish to share our trade with others, there are charities and of course taxes. We can also vote to give away our earnings.
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William Irving, PE, an electrical engineer interested in all energies and lives in Montgomery County.