Let's not confuse things...
tomfency at hotmail.com
Fri Jul 23 13:44:32 CDT 2004
I'm an economist. Well, I've used to be in my country of origin (I'm an
immigrant, right Keets? ;-).
Although free market system is the foundation of Capitalism, there are some
misconceptions when one is equalized with another. A pure free market system
means that no firm can affect price with his production (all firms are
price-taker). But in nowadays Capitalism the rule in competition form is the
oligopoly or the monopoly. The firm is price-maker and direct demand through
marketing strategies, product differentiation and other policies. And, in
nowadays Capitalism, the State or the Government is also a key factor for
the well behavior of the economy. The State determinate the interest tax by
its central bank (in USA, the FED) and regulates the demand by its
expenditures, like military expenditures that here in America are huge, very
huge (how many employs and profit that public consumption of weapons
generate, do you know?). The nowadays Capitalism is, in some thought
schools, named as Monopolic Capitalism of State, considering how intricate
is the relationship between the large corporations and the State itself,
including foreign involvement in countries responsible for strategic
commodities -- like oil, for instance. This story goes on and on and on, but
let me finish it by now.
>From: "Kevin O'Neal" <kevinandt at gmavt.net>
>Reply-To: The Who Mailing List <thewho at igtc.com>
>To: <thewho at igtc.com>
>Subject: Let's not confuse things...
>Date: Fri, 23 Jul 2004 13:02:52 -0400
> >David Huntington
> >The Who Mailing List Digest, V11 #198
> >Have I
> >been mistaken this whole time to think that Capitalism and free market
> >economy were synonymous with each other? That's scares me.
>No. No need to be scared.
>Capitalism is defined as:
>"a form of economic system in which the market process and the price
>mechanism are left free to work out the answers to the three basic economic
>questions. 'Pure capitalism' would operate with no government
>and no restrictions from 'tradition'. When the people are free to follow
>the influences of the price mechanism, to produce whatever they think will
>be profitable, to produce it in the ways they think will be most efficient,
>and to earn and keep as much income or profit as they can - that's
>'Capitalism. It is a system of 'laissez-faire' (hands-off by government)
>and competition, where each person has an equal right to get into any
>market, to produce anything which looks profitable, to out-sell the other
>producers - and... <Kevin in VT - I personally like this next line> 'let
>the devil take the hindmost'."
>The Devil, Alan!!!
>Free Market System is simply the "solid rock foundation" that is the basis
>of Capitalism. It is the details that make Capitalism, such as the basic
>concepts of Supply and Demand, etc.
>++Economic Evolution, Principles, Issues, Ideas...Through The Looking Glass
>by Elbert V. Bowden
>They are.....one and the same.
>Don't be fooled again. :-)
>Keet's isn't an economist, she just plays one on igtc. ;-)
>Oh, the three basic economic questions:
>1) What will be produced?
>2) Which resources will be used in the production?
>3) Which members of society will get a share?
>Econ 101 folks.
>Kevin in VT
>thewho mailing list
>thewho at igtc.com
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