@All:
One thing I struggle with -- and, to be fair, something I might have asked before -- but what makes capitalism different from whatever came before? Exempli gratia: were the ancient Greeks capitalists? If not, why not? They had private property, they did business, they had free markets, some people owned
other people the means of production. Surely they, and anyone who isn't a socialist, are capitalists?
I would say that before the modern era began somewhere around 17th century, there were no capitalists. Atleast not in Europe, I don't know anything about the rest of Asia on this matter.
There was business of course, but it was different. There was no great expectations of getting great returns on investments. Trade was dangerous, slow and expensive, funding the nobility's wars was tossing a die and there was not much mechanistic innovation to push productivity. So the people who had money were loathe to dispense it on dangerous business ventures, rather spending it on rising on the estate ladder, buying privileges or on gaining prestige by funding artists and building mansions for them selves. Land was the thing to own, not business ventures.
Also in Medieval times the taking of interest was considered sinful, as it is in the Muslim world today, so lending money (usury) was much riskier. And the theory of price formation was one of just price and not of profit maximizing. If a merchant tried to squeeze the cityfolk of their money, the cityfolk could riot and insist on just prices. They could even seize the merchant's goods and sell them to each other on the just prices, and then give the money to the merchant.
This all started to change in Northern Italy with the revitalization of the cities at the end of the 13th century, that slowly gained their independence, and banking became more acceptable, when even the Popes had to go to the coffers of the great banking dynasties to fund their wars and building projects. The crucial change came about in the 15-16th centuries, when outfitting merchant ships to the Far East could bring in great rewards for the investors. Maybe it could be said that these journeys to get the spices from the Far East were the first capitalist ventures by Europeans. A great innovation too was the joint stock company that allowed people to lower their personal risk while possibly reaping great rewards. Around this time too productivity began to rise with the nobility made burgeoning capitalists in Holland and England who tried to create ways to make their fields etc. produce more.
This all needed a change in the attitude of the elites. Instead of wasting their money on luxury, the elites put their money to work in getting themselves more ownership of things, while the other classes were expected to buy from the owning elites.
But this all gives an image of the world as a cake to be divided by the people. It's more of like a bread dough that can be divided, but which keeps on growing.
@OP
The capitalist system works on the assumption that in the future, people will want more stuff that the companies produce. Because of this people are willing to lend money for new business ventures, in the expectation that in the future the business will return the gains to the lenders/owners.
The capitalist system is the best system to date in producing the things that people want. It's also great at producing people that want the things that the capitalists want them to want. Like new iPhones each year.
It's also pretty great at destroying the commons. The ideal situation would be one where a market is perfectly competed. There all people have perfect information on the markets, costs and externalities are internalised in prices and there is no price setting by the producers. In theory this would create the most utility. When "neoliberals" are arguing for privatizing things like healthcare they seem to me to be arguing for perfectly competed markets, which will not happen. Personally I'm also sceptical at the utility in privatizing healthcare or education, because it's not clear what the product is. The goal of healthcare is obviously health, but the goal of a private company is profit. So by running a patient through unnecessary tests and prescribing them unnecessary medicine pushes the margins for the company, the patient's health may not be bettered. And since the patient doesn't have even near perfect information on their own health (or else, why would they go to a docor), they are poor at deciding whether the service they received was beneficial, or as beneficial as it could have been.
Anyway, because the negative costs to society of externalities like obesity, pollution and hormone disrupting chemicals in plastics are not internalised in the costs of products the capitalist system might in fact, in some parts of it atleast, be hurting us more than it is helping us. Plastic bags cost like 0,20€ in my country, with production costs internalised, but if their true cost could be more like 2€, with costs of negative externalities internalised. Then it would be in a customers, and the world's, best interests to buy paper or cloth bags instead.
To be sure, it's pretty utopian to think you could count the cost of hormone disrupting chemicals in plastics, because we don't even have a clear picture what they really do, but anyway, it points to the importance of state intervention in the markets. Without state intervention the market will malfunction, because the price formation and lack of information by the customers will drive out the "good" companies and leave only those that cut the corners in order to push their margins.
Stop fighting, you've won.
