In this series of writings I hope to guide the readers through this question by presenting historical background and then by exploring how two opposite ideologies have merged, discussing what is wrong with capitalism then finally deciding if capitalism is dead in America. Feel free to offer opinions , ideas, background and such as this series progresses. I hope you find it to be stimulating and educational as well.
The parts highlighted are excerpts from a book by Thomas G. Reed, The Fallen Eagle.
Part I. History and Philosophy of Capitalism
“Capitalism is an economic model in which all or most of the production and distribution capabilities are privately or stockholder corporately (not state) owned. It is based on the premise that man will pursue a path that enhances his own self interest. It is fueled by ambition, enterprise, invention, and self sacrifice. It capitalizes on man’s natural desire to improve and to reap the rewards of superior talent, energy or skills.”
Some form of capitalism has existed from the early days of the Egyptians until the fall of the Roman Empire at which time it basically ceased to exist during the era known as the Dark Ages. Feudalism and a strict social class society disabled and inhibited any desire to move forward.
Until the 18th century most industrial production was small, privately owned workshops. Then came the Industrial Revolution which concentrated production into the hands of a few wealthy capitalist, the independent factory owners. At the same time powerful landlords were driving small business farmers out of business and into the towns and cities where they became a source of cheap labor. Workers with no land or means of production were forced to sell their labor in order to survive. Capitalism, with heavy investments in equipment and human labor, merged the two into producing marriage of man and machine.
During those years government took the “laissez-faire” policy. Private enterprise was characterized by unobstructed competition among independent and unsubsidized businesses. They operated under the premise that competition would bring success to the most efficient producers and at that time Government agreed.
Influencing the Industrial Revolution as much as anything were the revolutionary ideas born in the “Renaissance and the Protestant Reformation.
The Renaissance was characterized by humanist thought that regarded life as an end in itself. This contrasted the medieval belief that life was a short testing period determining whether the soul would be saved or destroyed after death. Contrary to Biblical precepts, this humanist outlook stressed the desirability of material advancement and improved living conditions.
The Protestant Reformation introduced, amid predominant social doctrine, several ideas that complemented humanism's fleshly appeal that was prevalent during the Renaissance. Most noted were the teachings of John Calvin. He “legalized” the collection of interest on loaned money, encouraged savings and stimulated a materialist drive among Protestants by interpreting “predestination” in such a way that made business success appear to be a mark of God’s favor.
By Calvin’s standards, God blessed the 18th and 19th century capitalist. This is shown by the facts that business owners often grew rich, and those who sold their labor to growing companies also prospered as the standard of living in industrialized countries generally increased duiring the period. Banking and investment banking blossomed in response to the insatiable appetite for new capital. An thus it continued to grow into the 20th Century.
In 1929 the bubble burst. The stock market crashed and the Great Depression which followed took capitalism to it’s knees. After eleven years of despair it struggled back to it’s feet but was forever altered to alleviate the misery of it’s “Victims”. (Under FDR) Capitalism was saddled with the responsibility of securing both the present and prospective needs of every member of society, whether they belonged to the economic structure or not. Social, or state managed, capitalism evolved and swept over the world of heretofore free economics. Recent economic crises have greatly accelerated the demise of capitalism at the hands of it’s arch enemy—Socialism.
Next: Socialism, the history and philosophy