Archive for the ‘Economic Growth’ Category

Capitalism is the Best Economic System

No doubt about that, but Captain Capitalism provides a very strong empirical evidence to back this up.

The greater the time frame, the greater the correlation.

Read more about it HERE

So if our only purpose was to have a better economy, Capitalism is the only way to go. In the long run, the economic system which renders the greatest growti will tend to dominate.

Socialists like to believe that free-market economic growth will tend to crystalize a power structure and increase inequality. But as the size of the economy has no clearly defined boundary (it can go on forever), inequality can only go as far as 100%. With 100% meaning that there is only one owner for all capital, 0% meaning that there is a perfectly uniform distribution of wealth (more on this HERE).

Inequality won’t increase indeffinately. At best, it can vary, but it will settle at some value (which won’t be in the vicinity of 0, neither that of 100%). Quite simply, the wealthiest people around are those in the business of mass consumption. You can’t be a very large business unless you cater for the masses. So it’s absurd to say the masses will be “skinned” and left with a decreasing share of wealth, when these people are precisely the ones marketers must target to enter and remain in business. A business must please its customers to be viable.

Most people understand that employees will compete for jobs and customers will compete to get the products they want. But the other side of the equation is frequently ignored: that businesses compete for customers and employees. They understand the idea of a price, but can’t associate this concept with wages. They have an understanting of supply and demand, but frequently fail to apply this knowledge to labour relations and consummer protection. I blame the public school system and the media for most of this, but I also associate responsibility of action even to those ignorant of their effects. That is, not knowing is not an excuse.

Something to take home.