Al68 said:
It's basic economics, not myth, that wealth is created each time a voluntary economic transaction takes place.
Wealth is created when human activity, both mental and physical, is combined with nature's raw materials, modifying those materials to put them into a form that has a use, such as providing sustentance, comfort, convenience.
Economic transaction is a very general term related to taking money out of one person's pocket and putting it into someone else's pocket. By itself it doesn't create anything.
In some cases economic transactions have inspired wealth-creating activity, e.g., the development of modern industry out of the previous agricultural age. In some cases economic transactions have inspired activities that are pure waste but not otherwise harmful, such as advertising, speculation, and duplication of effort. In some cases economic transactions (particularly the madness for profits) have inspired outcomes that are socially harmful, such as the Love Canal toxic waste dump, and the 1970s Ford car with the exploding gas tank. There is no automatic connection between economics and how positive the results may be.
Free market capitalism is the voluntary trade of goods and services by definition.
You add modifiers to differentiate between the capitalism that can really exist in the physical world and an imaginary form that would be truer to some principle that you call the free market.
In reality, capitalism just means the de facto situation in which a small segment of the population owns the tools but doesn't perform any labor, the majority of population performs the labor but never acquires ownership of the tools, and production gets accomplished through the unavoidable arrangement between those two demographic groups that have diametrically opposite interests, those who own but don't work, and those who work but don't own.
There is a segment in our society that wants to turn back the hand of the clock and return to 19th century laissez faire capitalism, which they call the more "authentic" or "free market" form of capitalism.
Just yesterday afternoon, someone on another website asked, "What would happen if there were free markets without state intervention?"
I replied:
Little children working in factory sweatshops and down in the mines. In the absense of government inspectors, many lethal "accidents" where employers don't have fire exits, don't have safety covers on machines, etc. Unhealthy conditions in meatpacking plants and in the kitchens of restaurants. The rivers, lakes and ground water poisoned by cancer-causing chemicals. Without codes and inspections, buildings collapsing on people. Without labelling requirements, no ability to tell the difference between medicine and snake-oil potions.
Nobody claims that an economic system is responsible for the properties of electrons. But it's certainly true that most practical inventions were invented for profit by private parties. The profit motive is a very powerful incentive, not just for creating wealth, but for inventing ways to create it more efficiently.
I say no. This cannot be, because the people who do all of the work get paid flat salaries and don't receive any of the profits that are linked directly to productivity enhancements, while the absentee owners who receive the profits don't do any of the work. It would be a spooky action-at-a-distance, it would be voodoo, for the method of dividends and capital gains to be the inspiration for the salaried workers.
The only thing that people need to have the incentive to create new inventions is a way to formally declare the policy that the personnel are made aware of. In one case, a capitalist system, the memo says that we are going to get started making a faster computer chip, because the stockholders want to sell it and become billionaires. In another case, a socialist system, the memo says we are going to get started making a faster computer chip, because this direction has been democratically adopted as a public policy. Either way, workers will choose that career if they enjoy it, and will usually work to the best of their ability.
The standard of living for people below the official poverty line in the U.S. is far greater than the overwhelming majority of people in the 1950s. One would have to be deaf, dumb, and blind not to see that.
The official poverty line is meaningless anyway. With the cost of living today, a family could have an annual income close to $100,000 and still be in poverty, depending on how many bills they have to pay.
As a final comment, I'm completely against any imposed economic system, including capitalism. That's why I use the phrase "free market capitalism" to be clear that I'm not talking about any imposed system, or anything even remotely like anything described by Marx. And I have no problem with people practicing socialism/communism if that's what they choose to do. People have done so throughout U.S. history.
There is nothing in my lifetime of observations that resembles your idea of an "imposed" system. Reality is always in a particular condition. We find it that way when we are born into the world and grow up. Either we like it or we can propose changing it. To change the system is no more of an imposition than not changing it.
The Communist Manifesto points out: "... Freeman and slave, patrician and plebian, lord and serf, guild-master and journeyman, in a word, oppressor and oppressed... The modern bourgeois society ... has not done away with class antagonisms. It has but established new classes, new conditions of oppression, new forms of struggle in place of the old ones."
If people are happy with that condition, fine. If they don't think that it's optimal, they can try to change it. But to feel inhibited from "imposing" any system has no meaning to me.
What I am against is using force to deprive individuals of their ownership of their own labor like imposed communism/socialism/Marxism does. An individual's labor belongs to him, to control as he chooses. It does not belong to society or government.
If that's your objective, you have the conclusion backwards. When the industries are operated with a nonprofit charter, that's when people will, for the first time, be able to receive the full equivalent of their labor. If a company will only give a worker a job on the condition that it can expropriate a profit from that worker, then the worker gets robbed every payday. Every time your employer places a paycheck into your hand, you just got mugged.
