Re-Thinking Capitalism

Capitalism is both lauded and condemned. Those who condemn it, do so because capitalism is a competition some lose. Capitalism does not have compassion.

If capitalism is not perfect, communism is a disaster. To attempt to repair capitalism by the use of a socialist agenda or the formation of a dictatorial communist state is to make the issues worse.

The thesis of this essay is that capitalism errs three ways. The Doctrine of the Three Fixes is the theory that once we make three changes socialism is removed as a viable option to capitalism.

Before getting into the changes needed, it is important we establish a link between capitalism, Western civilization and conservatism. Despite capitalism having not lived up to it s promise, it is the lynch pin of Western society. Conservatism is the desire to see capitalism fulfill its potential and the belief capitalism unleashed ushers in the Golden Era of Western Civilization.

Capitalism requires three terms be redefined: capital, free markets and ownership.

Capital is wealth in the form of money or other assets. Originally, this was an adequate understanding of capital. But wealth has expanded to include anything with value. What was capital was is now what is called working capital. There is a large and unbridgeable difference between working capital and invested capital. Working capital is assets minus liabilities or what is thought of as equity. The distinction is so great we need to distinguish capitalism from globalism.

In this model globalism is businesses focused on the manipulation of liabilities, whereas capitalism is based on equity.

A miner, mines gold. The gold is used to purchase land and equipment and start a business. Or, the gold might be stolen. The theft creates a triple loss. Not only does the miner lose the value of his work, but the market also loses value by the gold having lost value when stolen, and work potential was lost in that it was not used to create a business.

Ownership as possession creates unearned value, this is globalism. The term generally applies to multinational corporations that play one nation off against the other. But globalism as the profiting from liabilities still applies if on a smaller scale. The investor who buys gold to warehouse it, or who buys property to live off rent or inflation, is a globalist. A globalist lives off of the possession of assets, capitalists live off of the working capital or the equity attached to assets.

Capital is assets minus liabilities. Assets can be possessed but not owned. Ownership as possession is the error that permitted capitalism to evolve into globalism. We cannot own what we did not create. Assets are owned by God, not man. Even if we do not believe in God, we cannot legitimize ownership of the physical world.

Ownership of assets requires force. Globalism is an application of The Dual Doctrine of Power, which states: might makes right and the end justifies the means.

Land claimed in the sovereign’s name, requires an army strong enough to enforce the claim. A state can only assign assets to private owners if the state has the power to protect the private owners’ licence.

It is the successful use of power that justifies and legitimizes the use of power.

Capitalism has unfortunately fell into this kind of thinking. The business owner that builds his business justifies his use of force. Globalists hire and fire at will because the profits he earns means he is doing the right thing.

Morality in the law of the jungle is survival.

Capitalism is supposed to be governed by the free market. The free market is often considered to be akin to the law of survival, where only the fit to survive, survive.

However, if we accept that only authorship defines ownership then capitalism is about creating equity and no about amassing assets. If we understand ownership correctly money as capital, becomes better understood.

If we cannot morally own assets, then money is not an asset or formed from assets. Money is a measure of the value we create; this is the definition of equity. Money as a unit of value is a unit of equity. As a unit of account, it is a way to record equity as credits and debits.

Equity is value added to assets. We create equity by modifying assets. Equity, in the form of preferred shares, measure the value of the equity we produce, through work.

Preferred shares contracted into prefers and designated by the symbol (Ҏ), serves as the accounting medium of free markets. Free market activity creates prefers. They are not open to forgery or counterfeiting nor theft.

Prefers cannot be borrowed. They do not generate interest. Transfers of assets create new commercial operations. Trusts transfer people and equipment from areas with low Demand to areas where demand is expanding. To create a new factory, the trust shifts workers from low Demand occupations to the new facility. Equipment in areas with slowing production, are committed to the new use. Thus, there is no inflation and no depression. All commercial facilities are kept at peak production. As usage slows in one sector trusts transfer assets to a new sector and a new use.

The new facility is debited the value of the new equipment and materials and the source establishment is credited the value.

Every establishment and worker is represented by an account in a Citizens Trust. Every worker is an owner in a Citizens Trust, and every owner is employed at producing real goods and services. The assets of the trust, form the assets of a political jurisdiction. Every political jurisdiction is a commercial enterprise. Every commercial enterprise is grounded in a political jurisdiction.

Every worker is paid a living wage, set by the workers in the Citizens Trust, gauged for that political jurisdiction.

Wages are paid in prefers and all prices are in prefers.

Political jurisdictions form Citizens Trusts and each trust is composed of the citizens within that political jurisdiction.

Free markets operate on the basis of supply and demand. Prices for goods and services must contain all the costs that went into the making of the good or service. Every product is composed of assets and the value added to the asset. No asset has value until commercial activity adds value to it. Nature is modified for human use to make saleable products.

Trusts do not charge for the asset but for the value added to the asset. This pricing model is called the Labor Theory of Value. The price of every product and service must contain all inputs. Free markets cannot work if there are externalized costs. If supply goes down compared to demand, prices increase. This makes it profitable to add productive capacity to where Demand is high.

Everyone works because there is no benefit for a political jurisdiction to have citizens who do not work. Remember, it is citizens who own the commercial operations in the political jurisdiction.

Capital is equity and issued as preferred shares, forms the money used in the free market.

The free market encompasses the assets contained within a political jurisdiction, owned by citizens.

Ownership is based on authorship, we own what we create, and this includes our political jurisdictions, which are commercial operations dedicated to the production of capital and Western Civilization.