Introduction
The Free Market is NOT the same as Capitalism. They are two very different concepts.
We must make the distinction because capitalism needs to be restrained, while the free market should be encouraged to flourish.
The Free Market is the system where things happen. People do things. People create things. People provide needed services for other people.
In contrast, Capitalism is merely a method for moving money around. No goods or services are created using Capitalism (unless the capitalists specifically invest in goods and services). Capitalism in itself does not create products or create jobs.
The Free Market
The Free Market is the best economic system available. The Free Market is a system where people create goods and services, using their passion and pride. The people then exchange those goods and services for other goods and services.
We commonly think of the goods and services being traded for money, but that is not necessarily an absolute in the free market system. People can exchange goods and services for other goods and services. For example: I will repair your barn if you give me a bushel of wheat. Or, I will provide the meat if you prepare the meal.
All that matters in the Free Market system is that there is an exchange where both parties get something they need, by providing something of value to the other person. The only reason money is involved is because money is a standard unit from which to compare the price of goods and services.
Remember, the Free Market is the system where things happen. In a Free Market people do things. People create things. People provide needed services for other people.
Capitalism
Capitalism is vastly different from the Free Market. Capitalism is all about the movement of money. Capitalism has nothing to do with real activity.
In capitalism, money is moved around. Yet no goods are created. No products are made. No services are delivered. It is simply the movement of money.
And that is the inherent problem of the Capitalist system. This is one of the central problems which has led to the economic situation of today.
Fallacies of the Capitalist supporters
The supporters of Capitalism say that Capitalism does create products and services, because of the investment into the businesses. This is not necessarily true.
First, understand that it is the dedicated people in our nation who create products and services. Capitalism is only one means to fund those businesses. Many successful people have never used Capitalism to grow their businesses.
Second, many of the financial elite in the past 20-30 years have used the method of Capitalism for strictly personal gain. They have used Capitalism as a method to defraud investors and to destroy businesses, while taking large personal profits. So in fact, Capitalism has been used by many financial elitists to destroy businesses and eliminate jobs, rather than to grow businesses and create jobs.
Capitalism is but one tool in the Free Market System
Capitalism is not the Free Market. Rather, Capitalism is a tool used in the Free Market system. And Capitalism is not the only tool.
Over the past few years I have meet with dozens of entrepreneurs throughout the nation and the world. All of them are quite successful. Note that every one of these successful entrepreneurs used the Free Market system, yet none of them used Capitalism.
Each entrepreneur created his own business, using his own money, and building it up over time. Small investments led to small profits, which were reinvested into the business.
Many of these successful businesses were created as a partnership, where each person provided some of his own savings, as well bringing his/her unique skills to project. In many cases, the project partners worked for almost nothing until the business became profitable.
There was no capitalism in any of these cases. There were no bank loans, no stockholder investments, and no connections to Wall Street. So you see, capitalism is far from the only tool available to boost prosperity in the Free Market system.
Capitalism as a tool: for good or for evil
Capitalism is a tool. And as with all tools, Capitalism can be used to create or to destroy. Capitalism can create happiness or it can cause harm.
If Capitalism is used as a means to boost the free market, then Capitalism is a useful tool. But if Capitalism is used solely to acquire more money without providing a useful product in return, then Capitalism is very destructive.
Capitalism is a useful tool when used properly. The proper use of Capitalism is to invest money in a business. This money is used to develop new products, to acquire supplies, to hire a skilled team, and to pay for marketing. As the business grows and makes money, some of the profits are given to the Capitalist investor while other profits are put back into the company.
When used in this way, Capitalism helps to create products and services, Capitalism helps a business to grow, and thus Capitalism does help to create jobs.
However, Capitalism by itself does NOT create any of these things. When used improperly, Capitalism will cause great harm. If Capitalism is used to just move money around without creating a product or service, then Capitalism will destroy a community. If Capitalism is used as a mechanism to defraud others, then Capitalism will cause serious harm (not only to the people who were stolen from, but also to the general economic health of the region).
This is exactly what we have seen over the past 20 years, culminating into the situation we have today.
Focus on Free Market, not on Capitalism
In order to restore some sanity in our economic system, in order to create prosperity in our nation again, we must change our focus. We must place our support on the Free Market, and we must keep Capitalism in its place.
The Free Market is good. The Free Market is the best economic system available because it will obtain the greatest prosperity and personal happiness for the largest number of people.
We must stop thinking of Capitalism as our basic economic system. Capitalism should be thought of as just one tool of our economy, and not the entire basis for our economy.
We must remember that unrestrained Capitalism is NOT a successful economic system. Unrestrained capitalism causes destruction and chaos.
We must remember that Capitalism does not create jobs. It is the Free Market that creates jobs.
Furthermore, it has been proven over the past 20 years that unrestrained Capitalism destroys successful businesses and puts many good people out of work. In contrast, the Free Market economy allows successful businesses to prosper, and allows passionate workers to have good jobs.
We can appreciate that Capitalism, when properly used by responsible parties, can be a useful tool. Yet the serious damage caused by unrestrained Capitalism proves that we must restrict the privileges of the Capitalists.
If we encourage the Free Market to grow, at the rate of the unbridled creativity and labor of the people, while at the same time restraining Capitalism to only legitimate functions, then America will prosper again.
