Wednesday, February 27, 2013


Capitalism, where the means of production are in private hands, is an interesting system for economic activity. It has received something of a bad rap, because in most of the world, including the United States, what is actually at work is perhaps more accurately termed "crony capitalism" (defined here as a system in which governments favor certain businesses over others, and thus allow those favored businesses access to rents in the form of public money and/or the ability to inflate their prices). Without that cronyism, perhaps the system would work a little better.

But it still would not be perfect. Mainly because, like many things, capitalism is really good under certain circumstances, and less so in others. Although I'm not an economist, I like to dabble in the discipline and read things here and there when I have time, and I've come to this conclusion in doing so. Capitalism is a very good, and perhaps the best way, for people to distribute goods and services that are scarce between people who are roughly equally set up. But it's not so good at dealing with plenty, and so what happens is that people begin to look for ways to create scarcity where it doesn't otherwise exist or would begin to go away.

I'm not sure how one deals with this, because I don't know what system of economics does do well in situations where there is enough to go around.

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