The Secret - Why the Rich Get Richer

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Capitalism

Summary:

Capitalism was created by observing what economic practices work to benefit nations. We found those practices that benefit people also benefit nations. Those practices were defined and called "Capitalism." It is not a theory of what may work, but practices of what does work. Capitalism enriches and empowers all the country's population, people and rulers alike. Capitalism does not have a political system that champions its causes, as Socialism does Mercantilism.

Capitalism was not started as Mercantilism, which was thought out and designed to accomplish a purpose, to enrich the king. Mercantilism is economic practices based on a theory. Capitalism is economic practices based on observation and analysis of what works. It allows private citizens to engage in business and provide for their own needs.

Adam Smith, an eighteenth century Oxford professor, wondered, "Why are some nations more prosperous than others? What is it they do differently?" Until that time, economies evolved in a hodgepodge way. A monarch may grant one city special favors or one class of people special favors, while keeping other people and other cities in serfdom. Mercantilism had been defined in the early seventeenth century, but it did not have a pure implementation throughout all nations. The result was that one economic practice was implemented in one city, another one in another city, and still another for the country overall. In this situation, some countries prospered and some did not.

Adam Smith wondered why. He studied the economic practices of nations and saw a pattern. When people practiced certain economic principles, they prospered. He wrote a book, Wealth of Nations, defining what he found and explaining it. His work was not a secret, and national leaders eagerly waited for his book. It was published in 1776 and quickly shipped to the United States. The American leaders, after studying his book, declared the United States will be a Capitalist nation, and set it up as such. Since that time, the United States has become the world's leading economy. Other nations, still far behind the USA. are catching up only as they implement Capitalism in their own country.

Capitalism is an economic system in which the people of a country are allowed to engage in commerce. The economy is not owned by a government or a political party; it is owned by the people engaging in fair trade. They themselves decide what to make and what to charge for it. With their profit they provide for themselves and pay taxes. Free Enterprise, incidentally, is the legal right for all citizens to engage in capitalism.

Capitalism has enriched more people and more countries than any other economic system. It holds the potential to rescue everyone from poverty and distress. It has provided more aid, more wealth, more inventions, more food, more goods, and more housing than any other economic system. In Capitalism, people care for themselves. It is impossible for a person or a political party to provide for millions of individual needs, but it is possible for millions of individuals to provide for their own needs.

"Wait a minute!" you may say. "What about all the abuses and injustice to mankind found in the Capitalist system?" The fact is, abuses come from two sources:

1. Mercantilism masquerading as "capitalism," is the chief culprit
   (Be honest now, before reading this, did you know the difference between mercantilism and capitalism?)
2. Misuse of capitalism

Since we are discussing capitalism here and not mercantilism, I will limit my remarks to capitalism.

Not Capitalism but the misuse of Capitalism is responsible for the abuse of other people. If you want to remove the abuse done to people, then practice pure and correct Capitalism. We can not say that about Socialism, because Socialism is designed to abuse one group of people in order to help another (which ultimately results in both groups being hurt).

What about those people who cannot help themselves, the orphans, the widows and the sick? Remember that Capitalism is the result of a study of what does actually happen. In the proper use of Capitalism, when people have more money, more money is available to help those who cannot help themselves. Under Capitalism more poor are cared for, more hungry fed, more homeless housed, more orphans secured than under any other system.

The next argument may be made: If the misuse of Capitalism is responsible for people being abused in the United States, that shows Capitalism is not being practiced in the USA, but its abuse is being practiced. Yet it is still the wealthiest nation. Doesn't that show it's not Capitalism that brought prosperity, but something else?

No. Remember that Capitalism was discovered by studying its results when practiced while intermixed with another economy, Mercantilism. The greater degree in which it was practiced, the greater that country prospered. That shows Capitalism works very well, even when adulterated.

Here are some hallmarks of Capitalism:

• The people of a country engage in private commerce; they own their own business. In Free Enterprise, every citizen is allowed to practice Capitalism.
• The type, quantity and quality of goods and services provided depend on the demand for those goods.
• Prices are regulated in two ways: the availability of goods and the competition.

Every system, good or bad, has misuses, which corrupt the system. Misuse of a bad system we call "improvements." Misuse of a good system we call "abuses." These abuses of Capitalism result in abuses of the people:

• Price fixing

  When different business owners secretly set prices between themselves, it removes competition. That hurts people because it artificially increases prices, rather than letting supply, demand and competition regulate prices. Price fixing is against the law in the United States, but these abuses are not always sought out and stopped.

  Unfortunately, socialists have been somewhat successful in getting government control of pricing. You may remember that is the facist-type of socialism being practiced. It results in tax increases for everybody, and the people it hurts the most are those who have the least money.

• Monopolies

  Monopolies remove competition. That results in fewer choices of goods, higher prices, and lower quality. Monopolies are against the law in the United States, but these abuses are not always sought out and stopped.

  Unfortunately, conservatives sometimes fight to keep monopolies because big-business-hating liberals (socialists) try to destroy them, and the conservatives think they have to oppose liberals no matter what they are trying to do.

• Lying

  That is, untruthful advertising or withholding information. That results in people getting hurt and also paying higher prices. Untruthful advertising is against the law in the United States, but these abuses are not always sought out and stopped.

• Charging too low an amount for goods and services

  The reason a business would charge too low for goods and services is to force a poorer competitor out of business. A wealthy business owner can sustain a loss longer than a poorer competitor can. When the poorer producer goes out of business, the wealthy business owner has no competition to regulate prices and quality; he is free to raise the price to any amount he wants, recovering what he lost earlier. This unfair practice is against the law in the United States, but abuses are not always sought out and stopped.

Mercantilism has a champion political party, Socialism. Socialism exists because of Mercantilism. They teach it and practice it continually, in order that they may reap its rewards: all the money and all the power at the expense of everyone else. Because of that, Mercantile philosophy is widely and wildly proclaimed and found even in the mouths of babies throughout the land: "The rich get richer and the poor get poorer." "More welfare!" "Free medical care!"

Capitalism has no champion political party. There is no political group specifically teaching and practicing Capitalism. The result is that people are ignorant and confused. They are being led astray by those who would be King.