Is Capitalism Immoral?

No. Socialism is immoral.

I’m not an economist. But I’m not shy about offering my beliefs on economics, and for years I’ve offered a description of what money is.

Money represents expelled human energy, and it facilitates a way for you to barter your energy with people you do not know and will never meet.

I was happy to see this primer by Walter Williams, because he defines money almost the same exact way. My way was missing a key ingredient that I will now use to supplement my argument. Money is “proof” that you already expelled that human energy.

When the government hands you notes that they’ve printed that say you’ve expelled human energy when you haven’t, you devalue the currency and we head towards the collapse of capitalism.

We need limited government for capitalism to work.

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38 Comments on Is Capitalism Immoral?

  1. I actually am an economist by degree, but never made a dollar related to it.

    But I disagree. We’re not devaluing currency through lazy people. We’re devaluing it to save the people who actually do stuff.

    Think about it, lazy people sucking hind teet don’t have anything. The Fed takes on unprecedented monetary policy to save the folks who own property, have a 401k, etc. Because if they let the fit hit the shan as it should, most of us wouldn’t begin to comprehend a 50% haircut.

    This cycle will never end. The inflation target has been our growth rate for the past 8 years, there’s nothing happening, just shuffling from one column to another.

  2. I don’t see anything the government is doing to save the people who have property, 401Ks, IRAs, etc. All I see is how the government is wanting to protect those on entitlement payments.

    In fact, I’ve been reading how the Dems (socialists) are scheming plans to take from our retirement accounts and bank accounts to fund the entitlement programs.

    I would really like you to give me information to the contrary.

  3. jclady, you’re right the government isn’t doing anything for the person other than redistribution. Old_Oaks is correct by disagreeing with the basic premise but incorrect on the overall point. The transfer of wealth thru a too big government to select groups is what drives the ultimate devaluation which, to jclady’s point, destroys everything for everyone…. And it rewards failure.

  4. I also majored in economics. May I suggest a short read (90 pages) on how to retire in a 0% tax bracket.

    “The power of Zero: How to Get to the 0% Tax Bracket and Transform Your Retirement” – David McKnight

    I own an insurance agency and those of us who are Series 6 licensed are reading this book and meeting twice a month as a study group to bring as many as we can along.

  5. @BFH – You have conflated money with wealth. They are not the same thing.

    If you are a capitalist, think that the free market is the inevitable exchange method for free people, then ask yourself why is it so frequently taken for granted that govt should control the medium of free exchange? Govt monetary monopoly, effected by legal tender and counterfeiting laws, is anti-capitalist, anti-free market, and anti-liberty.

  6. You’re rearranging the deck chairs on the Titanic.
    Whether money is printed to simply hand to deadbeats, who do not represent expelled human energy (a service, task, product), or it’s printed to offset the effects of deadbeats, matters little.
    The basic premise is the same – legal tender is in the hands of people who cannot “prove” they did anything to barter with.

  7. @BFH –

    1. I think you mean “expend” and not “expel”

    2. “Money represents expelled [sic] human energy” is painfully close, if not identical to, the Marxian theory of value. I haven’t read Williams’ economic material for a while (I always enjoy his social and political comments), but I doubt that he finds anything at all from Karl Marx of any validity.

  8. I know what ecp is saying, but didn’t explain how you’re propped up by not being propped up. These assets we own hold a value, which is most likely market dependent, only the market is a fragile house of cards. There are ambiguities and all kinds of deviant ways to reshuffle the deck to make things look nice. This has essentially been our monetary policy and it is what holds the market up. For now.

    Unfortunately this relates directly to our market dependent assets. So no, I wasn’t saying anything about goobermint confiscation, I am merely pointing out the reality of real value. Which suddenly might not be what you thought it was.

  9. You would of course use whatever medium of exchange suits the two of you. Most likely specie (gold, silver, platinum) but we don’t know because we are forced to use an imaginary medium.

  10. “Money represents expelled [sic] human energy” is painfully close, if not identical to, the Marxian theory of value.>>>

    Money is the practical substitute for being able to barter with people you cannot physically come into contact with.

    Perhaps you want wheat. You make glass. You have to find someone who has wheat and is looking for glass.
    Impractical.
    You exchange your human energy (whether it be through brain power, physical might, ideas, products, anything that is marketable in the market place) for Promissory Notes that will allow you now to barter with all sorts of people who have entered their human energy into the marketplace.
    You no longer need to find the wheat farmer that wants glass.

    Where does the Marxism come in?

  11. And the medium that suits the two of us does not suit the next guy I want to barter with.The electric company wants copper. The grocer wants gold. And I have to remember this whenever I do a transaction. Now I’m a metallurgist and I have heavy metal poisoning.
    And the guy in China won’t send my Blow Up Love Doll until he gets my gold.
    I send the gold and he no send Love Doll.

    Now what do I do? Call Bank of America and tell them to not process my credit card?
    Oh, that’s right. I didn’t use one. There aren’t any. I sent a tiny cotton sack filled with my nuggets.
    I’m on the seashore collecting seashells to pay my mortgage.

    C’mon.

  12. Wow, y’all hung up on mediums of exchange. It’s really the market that makes those mediums exchangeable. If I make a wish cup and nobody buys it, I have an illiquid asset. It does not matter what form of exchange.

  13. Quite a straw man. I’m not arguing against money. I’m arguing against money created and manipulated by coercive monopolies. Money has been “invented” many times by people who found the same inefficiencies in straightforward barter that you point out. No argument: a universal, or near-universal, exchange medium, a/k/a money, is far superior and greatly improves division of labor, which makes all of us wealthier.

    To put it plainly, you haven’t given the matter much thought if you think that the alternative to govt monetary monopoly is barter. That just isn’t so.

  14. You’ve made a good point, but it doesn’t answer the question of what money is, what wealth is, and what better alternatives are there to a straight barter exchange regime.

  15. And the video is about whether capitalism, which is defined as a system that can only thrive with LIMITED GOVERNMENT (a stipulation I made in the post), is immoral or not.

    Regardless of the medium of exchange, how is it possessing proof that I’ve contributed in some way to the marketplace, or received a medium of exchange as proof of that marketable equity, Marxist?

  16. Where does the Marxism come in?

    Seriously? Do a web search on “Marx Labor Theory of Value” and you’ll get more than 10,000 hits. And, yes, it is so well known that it is usually capitalized like that, though sometimes you’ll find “Labour” instead of “Labor”. Marx’s idea is very, very similar to what you said money represents. Exactly the same? No. But quite similar.

  17. Capitalism, if your definition includes an uncoerced (free) market, can exist with limited govt, but can truly thrive with govt so limited that it does not interfere with free and voluntary market exchanges. That pretty much rules out just about any sort of govt you can conjure up, limited or otherwise.

    And, alas, you’ve put up another straw man. “…possessing proof that I’ve contributed in some way to the marketplace, and received a medium of exchange as proof of that marketable equity…” isn’t Marxian, nor did I say it was. What I said was that your theory of money is similar to Marx’s Labo(u)r Theory of Value.

  18. On spot Fur. Have a friend of the lib mindset and no gettin’ through.
    It IS the path of least resistance, EXALTED.
    And since we’re all wrapped up in a system that is increasingly undiscerning, we’re being vacuumed ( think astrophysical, vortex) into the whims of those who deem themselves too high to serve another (i.e. employer).
    Parasitical. And, connected to our expended energy.
    We’ll be saying “TOLD YOU SO” while they keep shaking their lazy fist.
    I believe in my heart of hearts where if gov is greatly reduced, and DISCERNMENT is applied, we will see a more prosperous ( those who work for it) America. And a greater populous pulling their own weight would add more freedom, tax base, and more personal accountability, even for the hoodies.

  19. …for Money out to be something of certain Value, it being that whereby other Things are to be valued.

    — Roger Sherman*: A Caveat Against Injustice, or An Enquiry into the evil Consequences of a Fluctuating Medium of Exchange (1752)

    The quote from Mr. Sherman is a highly useful definition of money. Since everything is valued in terms of money, then it stands to reason that money should be something of value. When the gov’t can just print paper with numbers on it and say it has value, then everything is devalued because the money has zero intrinsic value.

    Yes, the little pieces of paper with numbers on them will buy things, but that doesn’t change the fact that the federal reserve paper has no REAL value, just imaginary value. You believe it will buy things and a seller is willing to accept it. However, it’s like the person playing poker who ends up with all of the IOUs at the end of the game. He has make people pay. In the instance of federal reserve paper, there is no “pay-up.” You’re stuck with the IOUs and when the gov’t stokes up the printing presses, your IOUs are now worth less than when you acquired them. That is criminal. The gov’t can’t do that with precious metals because it costs human labor to dig them out of the ground.

    Money has four functions:

    1) Unit of account — all items are valued in money.
    2) Medium of exchange — how you simplify trade.
    3) Store of value — money not spent (saved) can be used later to buy the same things for the same amount.
    4) Unit of deferred payment — money can be loaned, but the lender expects to be repaid in money that will buy the same things as the money he lent.

    You will notice that federal reserve paper meets only the first two. So they fail the test of being called money.

    By the way, for Marxism to flourish, you need a gov’t paper currency that can be devalued when the gov’t decides.

    * Roger Sherman is the only person to sign our four most important political documents: The Continental Association of 1774, The Declaration of Independence (1776), The Articles of Confederation (1778), The Constitution of the United States (1787). His book, A Caveat Against Injustice is a wonderful read. As author F. Tupper Saussy said, it is a living voice.

  20. I think the questions were answered.
    Money is a way I can barter with people, people I will never meet, with marketable skills I possess that the person I am bartering with doesn’t want or need. So the note I possess is proof and assurance that it will have value to another person they need to barter with who do not require the marketable skills they possess. And so n and so on.

    I can EXPEND as much human energy I choose in order to collect more barter notes, increasing my wealth.

    This system is superior to shipping around heavy metals, diamonds, gemstones, cockle shells, beads and other variants that would require me to carry around my jeweler’s loop and acid test kit when I get change from buying a Clark bar.

    The fact that the limited government has grown into a mafioso style middle-man, and artificially manipulated the value of each note, and printed and handed the notes to people who bring nothing of value to the marketplace, is an entirely different subject.

    But I don’t see another system that is practical unless you want to return to co-ops and villages that cannot do business beyond the village limits because the next village doesn’t work on your standard.
    And I don’t see how returning to a system based on the weight of gold can be at all practical.

    So, what’s the answer?

  21. You say that like a definition of money is the evil part of Marxism.
    If Marx defines money as – a representation, a proof that you’ve contributed a marketable skill to someone and now you can barter that proof with someone else – and I define it the same way, so what?

    When Marx dictated the limitations on what your marketable skills could and could not achieve, that is the evil.

    My definition of money, if it’s the same as Marx’s, does not concern me, embarrass me, or defeat my argument.

  22. Williams was breaking down what money is “supposed” to represent in order to get to a discussion on free market exchanges as opposed to market exchanges based on coercion.

    If you want to get all apocalyptic, GOLD HAS NO VALUE.
    The only thing that has real value is Fire, Water, Food, Shelter and
    Weapons.

    Come to me with your gold when you are cold, starving and thirsty, and without a gun.

    “You wouldn’t even know a diamond if you held it in your hand. The things you think are precious I can’t understand.” -Steely Dan

  23. OK, one more then sleep. Using gold as the example, you don’t need to tote bags and bars around to use it as a medium of exchange just as convenient as today’s fiat currency. Look up bailments, negotiable warehouse receipts, bills of lading, and you’ll see that all are documentary proof of title to ownership of real commodities.

    We can use the same infrastructure we have today plus something of real value, something in demand in the marketplace such as gold, underpinning the paper and bytes.

    BTW, I understand what you mean by”barter” here, but I have to point out that your usage is nonstandard. Most commonly, if you’re using money you’re not bartering.

  24. The value of anything is simply what someone is willing to give you in exchange for it. ANYTHING. Even gold.

    And, yes, that means that the value today may well not be the same tomorrow.

  25. What money is? That’s complicated. To some of the successful it’s a nothing more than a measuring stick to how well you do your job. A rating system.

  26. >>I understand what you mean by”barter” here, but I have to point out that your usage is nonstandard. Most commonly, if you’re using money you’re not bartering>>

    You know that for the purposes of this discussion that money and barter becomes interchangeable because my premise is that money is an efficient way to barter.

  27. Government makes capitalism immoral by interfering with the
    natural process. Funny how those who hate Capitalism, like the
    so called Pope and the so called President are the same ones who can’t get enough of our capitalist money to give to others so they
    appear benevolent.

  28. If you want to get all apocalyptic, GOLD HAS NO VALUE.
    The only thing that has real value is Fire, Water, Food, Shelter and Weapons.

    I have been wondering for a long time why so many people do not understand this.

    All you have to do is go camping far away from civilization for a few weeks to see this.

    Even a sharp stick will have more usefulness than gold out there.

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