Capitalism is a great system.
Capitalism is the most reliable way a large number of people, that don’t know each other, not a family to one another, and possibly hate one another, to nevertheless cooperate well with one another and benefit one another with little control or regulation from a centralized authority.
Capitalism is not the only system to do so. Typical kingdom, nations, ideologies, or corporations also have ways to “unite” people.
However, most the other ways are fragile because of the need for centralized authority.
Take a look at kingdoms, for example. Typical countries are more prosperous than total anarchy. However, kingdoms need a centralized authority to govern. That centralized authority, namely the king, simply live in opulent palace collecting harem.
Soon, the other guys try to be emperors, and we will have another dynasty cycle.
Some system works without a centralized authority, like anarchism. However, anarchy often leads to looting and war. Anarchy, not capitalism, is, of course, the most natural system we have.
Some system also unites people without centralized authority. Religions and ideologies also unite people. How can you have ISIS in Syria direct terrorism in your country? Well. They have the same faith.
How can you have racist supremacist cheering massacres in mosques? They have the same ideology.
However, those religions and ideologies do not lead to prosperity as much as capitalism.
Corporations do not practice pure capitalism insight. Corporations are capitalistic outside. That is, corporations compete with one another, to get paying customers.
However, inside, corporations practice centralized economy. Shareholders pick CEO and that CEO pretty much directly or indirectly determine everything. The CEO determines your salary, what to do and stuff.
If you go to Cinemas, you do not bid for your movie to be shown. You do not vote for movies to be shown like in democracy. Cinemas have owners or rulers. Internally, Cinemas are not capitalistic.
Cinemas are just capitalistic outwardly. The cinemas compete with other cinemas.
So that’s pretty much what I mean by capitalism.
Capitalism is a system where a bunch of people competes peacefully with minimum regulations from a centralized authority. Those people organize themselves into organizations. Those groups then peacefully compete to acquire resources and customers. The organization has owners/effective owners/rulers, and beneficiaries.
One most significant benefit of capitalism is that it works almost automatically. If we need a centralized authority to make it work, then that centralized authority can abuse its power, and things start failing.
Capitalism works with very few and simple rules. The rules are only two. Do not force and do not defraud. Also, capitalism needs a clear consensus on ownership. Somebody needs to protect those property right.
That somebody is usually a centralized authority like government, a decentralized authority like bitcoin, or semi-centralized authorities, like competing online market places.
What do I mean by semi-centralized authorities? Semi centralized authorities are things like PayPal, or online eBay. They are centralized. However, they have to compete and customers can easily choose which centralized authorities make the most sense.
In a sense, eBay is centralized. They have CEO and stuffs. In a sense, eBay is not centralized because it has to compete with Amazon and other online market place. That’s what I mean by semi-centralized authorities.
However, often it’s difficult, to get things done without a centralized authority or semi-centralized authorities.
Without government, for example, who would prevent us from just killing each other and loot each other?
Sometimes, centralized authorities are doing well. If I go to an online market place like eBay, I know that I cannot defraud other customers.
If I defraud other customers, eBay will kick me out. Here, eBay, a centralized authority, does its job well of maintaining justice. If eBay doesn’t do its job well, I will go to Amazon or Alipay.
Here, a semi-centralized authority is doing fine. We do not have to argue whether eBay, Amason, or Alipay is democratic or not, or whether it takes care of the poor or not. The answer is no. All are governed by dictators and they just care about their profit.
However, because those marketplaces have to compete with one another, they all behave reasonably well.
Often semi-centralized authorities also abuse their power. An exchange, called CoinMarket, did an exit scam. https://bitcointalk.org/index.php?topic=2684461.880
The solution for that is to have a government arresting CoinMarket. However, governments are powerless against entities like CoinMarket. This is an important point.
Many time, as a capitalist, I want weaker government. There are times, however, that I wish government is stronger. I lost 1.5 bitcoin in a hack. I wish a government can kill the hacker, but I don’t expect it’ll hapen.
It will be nice if one day we have pure capitalism where everything is decentralized. However, that’s far from necessary. Such systems are not trivial. Semi-centralized authorities often deserve their paychecks.
Pure capitalism in everything is not necessary to properly align humans’ interests to productivity as a whole. As we see ourselves, cinemas, corporations, and nations, are often not very capitalistic inside. Our species, however, get more and more prosperous all the time.
The form of capitalism that most people are familiar with is what I call “inner” capitalism.
An inner capitalism is when a nation practices minarchism or libertarianism.
It’s hypothetical. No nation is purely minarchist or libertarian.
This lower capitalism has a few notable weakness.
The first is that it’s often not practiced. Just look at Venezuela or United Soviet Socialist of America. We can argue that those countries would be even richer if they are more capitalistic. Both are at least, partially socialists.
In the case of Venezuela, the case is pretty obvious. We see that it should have been more capitalistic. The case of the US is not obvious. Many people think that US is too capitalistic.
Why is capitalism not practiced fully?
A lot of reason.
Imagine if you are a dictator in one country like Suharto. Imagine if everyone competes to build a factory for sugars. Then the margin for that will be low.
Normal businesses have all their margin gone toward opportunity costs. To make more money, Suharto gives special licenses to certain people. That people then share the extra profit with Suharto.
We call this rent seeking.
Instead of producing better products that customers want, people try to be in power or lobby those who are in power.
Finally, Suharto was toppled. However, people would still want to practice the same cycle again.
It’s democracy that solves the problem of Suharto, not capitalism.
Capitalism alone doesn’t solve many problems.
Under capitalism, everything is okay, except force or fraud.
What counts as force or fraud is often debatable.
What about welfare parasites producing cradle to grave welfare parasites? Is it one of basic human right to produce as many children as they wish with tax payers’ money?
What about parents that do not vaccinate their children? We would think those parents force everyone to have a higher risk of disease. Yet, not vaccinating children is legal in most countries because of well, freedom.
Just like Suharto wants kickbacks from his cronies, welfare parasites want bigger and bigger welfare.
Knowing those welfare parasites will vote for bigger governments, many politicians want to create rules that encourage their breeding. That’s how the politician “caste” maintain their interests.
While breeding while poor hurt tax payers, such acts are legal in most countries. Democracy rewards those who do with bigger welfare, universal basic income, and voting right. Pretty much free shares without contribution.
Capitalism does not perform best in the military.
In capitalism, if you like burger you go to a burger, restaurant and if you like pizza, you go to pizza restaurant. Each goes their way is great in getting each people what they want.
However, when it comes to security, those who are a more united win.
The Southern Song dynasty is more capitalistic than the Mongol empire.
However, the Southern Song is smaller. Hence, the more united Mongol empire conquer Song and establish the Yuan dynasty.
When Xiang Yang fell, we have 200k troops on Mongol Empire defeating 7000 chinese defender. The Chinese are the only culture that the Mongol have to “overwhelm” with number before they win.
And yet, despite occasional failure like Venezuela, North Korea, Afganistan, and Syria our species prosper.
Even countries that’s not democratic like China prosper.
Because we have another form of capitalism, most people don’t see.
Because we have world peace. World peace is what I call outer capitalism.
You see. Countries are effectively capitalistic with each other now. States have rulers/owners/beneficiaries. Democratic countries, for example, have voters. Those voters vote for their best interests.
Countries achieve world peace with minimal or non-existent world government. There is no sovereign on top of sovereigns.
Just look at how much dues your country pay to say, UN. Very little. States are almost libertarian to each other.
Do you want to see where capitalism is practiced succesfully? Look at the globe. That’s one big globe of capitalism here.
If we have many stores, we don’t need to care about how each shop govern themselves. We will pick the store with the best product at the best price and go to where we like.
The same way, if nations are capitalistic to each other, we do not worry how each nation is governed. Each nation will automatically govern themselves well.
Otherwise, taxpayers will go to other nations slowly.
Capitalism in our countries depends a lot on outer capitalism between countries. If countries are capitalistic toward one another, countries will also practice capitalism, or whatever work, inside too.
World peace turn countries from centralized authority into effectively semi centralized authorities. Each country are like online stores competing for tax payers, investments, and talents.
If countries are not capitalistic toward one another, then capitalism inside will be very impractical.
Pure capitalism should not be practiced in a country where peace is not guaranteed. A country like Israel, for example. If Israel a libertarian country, it would have been destroyed by Arab. We have a case of a libertarian country utterly destroyed very quickly.
Tonga, a small weak country, destroy Minerva Republic.
Nevertheless, countries become more and more capitalistic.
That is why many countries become more and more capitalistic. Countries that are capitalistic become more prosperous. The people, either through ballots, or bullets, or threat of rebellion, demand capitalism all over the place.
That’s in a sense, the capitalistic way to promote capitalism. The US does not need to bomb any country to force another country to be capitalistic. Most countries, even China, embrace capitalism willingly because capitalism is so awesome.
A hypothetical capitalist country needs to do, is to practice capitalism, be prosperous, and attract all smart people to that region. Then the whole world will be capitalistic too, willingly.
Capitalism is unique. It’s the one peaceful ideology that does not need the guns or sword or terrorism to spread. At least not as much as other ideologies I know.
Anyone see how many terrorist slam airplanes to buildings to promote capitalism? How many suicide bombers scream long live Capitalism?
So we have outer capitalism and inner capitalism. What is sideways capitalism?
Sideways capitalism happens when competing private companies govern stuff that governments use to govern.
Say I buy stuff from Tokopedia (my favorite online store). Say I have a dispute. Do I go to court or complain to tokopedia?
I can go through my government’s normal slow and corrupt dispute resolution, or I can go to Tokopedia straight.
Tokopedia, uber, eBay, all resolve dispute very fairly. Otherwise, I go to another online shop.
Bitcoin also prevents any country to control capital. As customers can easily move their capital from one country to another, each country needs to govern capital fairly if they still want capitals to stay in their country.
Or look at marriage. Usually, governments govern marriage. Now, most babies are born outside marriage. We do not need governments to regulate marriage anymore.
In ancient time, we need governments to regulate taxies. That’s because small taxi company can rob their customers. Now with Uber, bad taxy drivers are fired and easily reported to cops.
All we need is just one country to allow bitcoins and that capitals will flow to that country.
So what do I mean by middle capitalism?
I mean infusing governments itself with the spirit of capitalism.
Capitalism is happening anyway.
It’s too slow, isn’t it?
Look at Venezuela. People starve to death first before they repent, if ever.
Look at some states in US legalizing weed. It’s already obvious that criminalizing weed is stupid. Yet it took so long for some states to legalize it. Then it will take another decade before the federal government legalizes it.
Why? Because voters do not run their states for profit, at least not explicitly.
Imagine if I am a King of California. I will legalize drugs, tax it, and make tons. It’s profitable. I will save money for jail. I will collect money from taxing those drugs. Many drug users are very productive tax payers. They will flock to my states and be tax payers for my state.
It’s very obvious.
Yet, democracy is not corporations. Voters care too much about things that are not profit.
If even one LSD user jump out of the cliff, it’ll cause hysteria among voters. Voters then ban LSD.
Voters do not care about profit. They care about justice and compassion about each other.
If only those voters care about profit, they will automatically be more just and compassionate. Now that they don’t seek their profit they do things that are neither just or caring.
Many voters care about drug users. They care. That’s why they declare drugs illegal and jail those users. Is it just? Is it compassionate?
Is compassion and justice the motive behind our votes?
Humans are hypocrites. We pretend we care about justice and compassion. We probably truly believe we care about justice and compassion. Our true desire may be far less politically incorrect than that.
What about if white supremacist wants drugs to be illegal so they can jail and disenfranchise a lot of blacks? What about if white supremacist want the minimum wage to keep blacks out of job?
Or what about if black people want the income tax to prevent other ethnics from making money?
Or what about if drugs are illegal so drug companies can have less competition and bribe officials.
It’s neither just nor beneficial.
What other ways we can improve our governments’ quality by infusing spirit of capitalism.
What about IPO?
Imagine if all province or state governments go IPO?
Imagine if each voting right has a valuation.
If you do not like the way your fellow citizen vote, you can sell your voting right in your state, and buy voting right in another state.
In the beginning, we can arrange that each individual can only have one and only one voting right, not more not less. So the country is still democratic here. One man one vote.
However, the state whose voters pick better governor will have their voters valuation going up. A state who choose stupid governor will have their voters valuation going down.
Now, we have an objective measure of whether we pick the right governor or the wrong governor. Just look at your state valuation.
Or what about turning all welfare checks into a universal basic income. My idea is similar to Andrew Yang except that I am far more conservative. I think universal basic income should replace welfare rather than increasing tax. Andrew’s idea of raising sales tax is not too bad though.
Or what about making citizenship more like shares. That is, you can inherit your citizenship but you do not get it just for being born at the right place.
Hence, a soldier that died in Vietnam can inherit his citizenship to his only son. His only son can vote twice and get a double dividend.
On the other hand, some feckless father that produce 40 children will have to choose vasectomy or welfare on his 1st child.
You don’t like paying income tax?
Nation states, after all, are closer to defensive pact rather than corporations. The rich and wealthy benefit from the defense pact more than the poor. So it is reasonable that the rich pay more tax than the poor.
Unlike most capitalists I am not totally against wealth redistribution. I am rich. I do not want terrorist to blow me up. If my neighbor is poor, I want that poor guy to vote for government that will protect me. If that means the poor get money so be it.
However, is it really have to be complicated? Does it have to be an income tax?
What about if we let each state or province to tax their population in any way they wish. The united federal government then collect tax from states proportional to say, the states land value or the prosperity of the state.
Like it or not capitalism is creeping. We will have more and more capitalism.
Let’s speed that up.
The country that practice capitalism the most will be the first to be the richest and most prosperous.