Capitalism: The Unknown Definition

I don't have a clue what Capitalism is.

Oh, don't get me wrong. I've got a pretty good handle on the ins-and-outs of Friedman, Mises, Rothbard, Rand, and Hayek. The people with whom I discuss issues, political and economic, have read the New York Times, Krugman, Keynes, Marx, and Samuelson. I may as well be speaking Hindu, and they are probably speaking Gaelic. I'm not sure, because I can hardly understand a word.

I often argue with my favorite self-described "socialist." Mind you, we both work for a retail company, buying and selling consumer products, trying to produce a profit in a very tough environment. We agree on business issues to the extent my job overlaps with his (his is in IT, I'm a merchant). Me, the Capitalist and, he, the Socialist have made common cause to run a for-profit business. My socialist friend is worried we won't make a profit this year. Odd, eh?

Yet when we discuss what is going on in the larger economy we can find no common ground at all. Over the years we have had numerous heated debates which sometimes resulted in each of us resolving to go to our respective corners of the office and avoid further conversation except for the most banal pleasantries. The more serious the issue, the deeper the disagreement.

Today, we discussed elements of the current credit meltdown that are putting our company in jeopardy. The discussion quickly spiraled into a debate over Capitalism and whether or not it is doomed to failure unless it is carefully regulated. I could see that this was going to be another unproductive sharing of views, my Hindu versus his Gaelic, so I did something I usually cannot do: I shut up and listened.

My friend trotted out his parade of economic criminals: corporate robbers, lobbyists for corporate interests, Wall Street insiders, lapdog regulators, etc. In other words, "Capitalists."

Normally I would have bristled at his distorted view of my "Capitalism." A fight over the proper definition would have ensued. Just as I was about to launch into my tirade, I said instead: I don't believe in Capitalism, because I don't know what it is.

He was stunned. I continued.

"I believe in a Free Peoples' Market, where everyone is entitled to keep or trade the fruits of their labor, freely."

"Ahhhh," he said with a smirk, "Communism!"

"Ok, Communism! Whatever word you like. If that means we're free to live our lives without coercion, then I am a Communist."

Amazingly, the argument was diffused and the discussion turned to the Federal Reserve, Fractional Reserve Banking, and the gold standard. We disagree about these things, too, but at least they are more concrete and can be discussed with some precision. Oddly, the socialist was defending the central bankers, and the Free Peoples' Market person was arguing against the current monetary system.

We didn't get very far in our discussion today. I'm sure there will be longer and deeper conversations in the future. I can guarantee, however, we won't be debating definitions.

Death to Capitalism, whatever the hell it is!