WorldWide Drilling Resource

The Un-Comfort Zone II by Robert Evans Wilson, Jr. The Concept of “Capitalism” should not be so Confusing Recently, I had a conversation with a friend who was upset a corporation was able to get the government to use its power of eminent domain to take the land from several people for a private, for-profit project. This was clearly not a public project, such as a road or a sewer (and I’m being intentionally vague because the specific project is not the point of this article). My friend con- cluded by saying, “. . . and that’s why capitalism is evil.” I then asked, “Why do you think that’s capitalism?” My friend replied, “Because it’s a corporation out to make profits.” I then said, “That project ceased to be capitalism when force was used to take those individual’s property if they did not want to sell.” I have found over the years, many people are confused about what capitalism is, as well as what comprises the other types of economic systems. One of the problems I’ve found is several modifiers are frequently added to the term capital- ism, which causes a great deal of misunderstanding (and I suspect not without intention). Here are some examples: Corporate Capitalism, Crony Capitalism, Free-Market Capitalism, Laissez-Faire Capitalism, Private Capitalism, Responsible Capitalism, State Capitalism, Turbo Capitalism, and Welfare Capitalism. During his run for President, I heard Bernie Sanders use one I'd never heard before: Casino Capitalism (a term coined by John Maynard Keynes in reference to the fortunes made and lost in the stock market of the 1920s). I have even heard people describing Democratic Socialism as a type of capitalism. A type of socialism as a type of capitalism? No wonder so many people are mixed-up! Adding to the discombobulation is most countries today have a mixed economy, which is part capitalism and part command economy (a command economy is one in which business activities and the allocation of resources are determined by gov- ernment order rather than market forces - TheFreeDictionary.com), i.e., communism, socialism, fascism, monarchy, or other dictatorship. My motivation in writing this article is to do one thing - simplify the concept of capitalism so anyone can understand it. I went to TheFreeDictionary.com for an “official” definition: Capitalism - An economic system in which the means of production and distribution are privately or corporately owned and development occurs through the accumulation and reinvestment of profits gained in a free market. This definition properly includes the term free market , which means: An economic market regulated by the forces of supply and demand (also from TheFreeDictionary.com). It is the inclusion of the term free market which differentiates how profits are made under capitalism as opposed to any other system. It is the voluntary exchange of goods and services without any government regulation. It is a con- sensual exchange of goods and services Wilson cont’d on page 40. 33 WorldWide Drilling Resource ® FEBRUARY 2018