What's The Difference Between Capitalism And Free Enterprise?

Great Debates
1

Free enterprise is the backbone of the USA. It’s responsible for our remarkable consumer marketplace and military dominance of the world today. Any arguments?

In our early days, say pre-Civil War, any free 21 yo white man was free to pick up stakes, move West and, with some assistance from the US Military, steal some land from our indigenous brothers. Then with enterprise, hard work and a little luck, he/she might establish himself in a flourishing business. Farmer, bar owner, madam, blacksmith, mercantile magnate, etc. Preachers and teachers and natural-born Sheriffs also had a place.

Now, that’s free enterprise. Businesses competitively supplying the needs of local consumers and local education and law and order somewhat in place. The thing that differentiates free enterprise from other business structures is that a free enterprise enterprise is founded on actual need on and grows as that need grows. Any arguments?

Now, along with our free-enterprise Horatio Algers came Capital. Railroads, mining interests and other huge real estate “owners” (again courtesy of the US Military) took formal possession of the country and have been making free enterprises pay for Capitalism’s social and environmental depredations ever since.

Oh, yes. What’s the difference between a Capitalist and a Free enterprise? It lies in their respective views of the Free Market.

Free enterprise grows peacefully to meet growing market needs. Internal negotiations for local development are (mostly) in the open. You are likely a friend of a friend of the mayor. And if some newcomer wants to start a pig farm, you can make him settle downwind of your home. But you gotta love dem ribs. Basic Socialism.

Capitalist enterprise requires:

*An ever-growing consumer market. If no need exists, create it and exact the middle-man fee on a global scale. Nice work, if you get it.

*An ever-increasing money supply. Print money and float consumer loans. 10c return on the dollar until everyone’s bankrupt ain’t bad.

*De-socialization. Every man for himself. Your own car, etc. You get “news” and best prices from Our Media. You distrust your neighbor and think his plight is different from yours. You blame everyone but yourself for the injustice in the world.

To sum my argument, kind Sirs, that’s the difference (see OP).

2

Cite? Surely all you need is a profitable market?

Contradicted by all the capitalist countries on the Gold Standard in the 19th century, surely?

Aren’t bankruptcy laws that allow you to start anew and try again social welfare?

3

Underlining added. These statements are contradictory.

4

Dude, this is the second OP of yours in a few days I can’t even begin to make heads or tails of. No offense, I hope, but you need to take an extra few minutes before you start writing and, like, diagram out the points you want to make or something.

I got kinda hopeful when you said “to sum up my argument…”, except then you didn’t sum up your argument.

5

Does anyone here recognize that free enterprise is impossible where corporations are considered people?

6

I’m not seeing the necessary link.

You say free enterprise involves – well, here, I’ll just quote it:

I don’t see why a corporation with some of the ‘personhood’ rights can’t likewise cater to actual needs, growing the business as those needs grow and otherwise doing the stuff you say a man would do “with enterprise, hard work and a little luck”. You say “he/she might establish himself in a flourishing business”, suggesting particulars like bar owner or blacksmith or mercantile magnate; I don’t see why a corporation with those ‘personhood’ rights can’t likewise profitably own a bar in that same free-market system you postulate, or why a mercantile magnate would be any different, or even why a blacksmith suddenly can’t keep on keeping on after hanging out his shingle as the proprietor of his own business, or whatever.

7

You’re inventing distinctions that don’t exist, by using terms that are ill-defined.

Free enterprise simply means that people are free to set up businesses and sell their products to anyone they want, until mutually agreeable terms.

Capitalism is more generally defined as a system in which the means of production remain in private hands, with economic activity primarily organized by markets.

Either one can involve ‘mom and pop’ businesses or giant mega-corporations. It doesn’t really matter.

Now, the existence of large corporations is the result of the evolution of markets within a capitalist framework. When capital is free to move, people have discovered that concentrating it in some cases allows for large-scale manufacturing, which brings economies of scale. To facilitate this, you need large markets. Hence national advertising, large companies with national supply chains, large factories, and huge collections of capital to build multi-million dollar facilities.

Enterprise stops being free when government gets into the mix. And here there IS a difference between small business and large business. When businesses become large enough to affect elections through donations, or large enough to affect policy through lobbying or otherwise influencing politicians, you get crony capitalism. Small businesses do not have this power, so you wind up with a situation where the large businesses make the rules, the government enforces them, and it’s all done to the benefit of the large businesses and to the detriment of small business.

Crony Capitalism is the real problem.

8

I’m with you. Don’t forget about the cheap oil that has made all this possible.

Here, we disagree. Enterprise stops being free when a govt of, by and for the people cannot restrain Capital in it’s restraint of trade. IMHO.

Crony Capitalism? Is there another kind?

I would call it corruption, pure and simple.

What is corruption? Lack of transparency. We vote? On what? Campaign promises.

9

Hmm. During the Free Enterprise era of which you speak, up until about 1890, land was free, in roughly 1 square mile chunks. You wanna live there? You can have it. Been there long enough? Sell it to someone else.

What’s the difference? Either way, you still have money as the intermediary allowing people to trade unevenly distributed resources for purposes as they see fit .

But you may have noticed something - actually, it appears you didn’t - the free land ran out.

10

Sure. I’ll just quote Wiki here:

I’ll just add that free-enterprise is usually framed as a type of capitalist economy, and that most economies are a mix between various types of capitalism, various types of socialism and various types of wealth-redistribution.

11

It wasn’t “free”, it was overrun and seized.

And cheap oil is close behind. :stuck_out_tongue:

12

To the Romantic Man of the OP, the land most certainly was free. Look it up.

13

It was certainly given away for free. But it was either bought by the US government or seized by the US government or private actors using force.

14

alice or not, you’re cute. How can I argue with the RMOTOP?

Tell me more.

What can I say?

Please don’t get me started. I can have us in a ditch in 10 secs.

So?

15

Consumer Subsidy Act. Take a buck or take a bullet

That’s All, Folks.

16

Read the OP’s second paragraph. That was the Romantic Man I referred to.

17

Yes.

Military dominance has nothing to do with free enterprise. It’s simply a function of the amount of money that a state is prepared to spend on its military.

Of course, having a decent economy provides more money to tax and spend on weapons but it is the preparedness to divert large sums to the military that creates the dominance. (Plus, obviously, being a big enough state in the first place.)

18

I think the core difference, and the cause of the main issue that I and many other people have with Capitalism as currently implemented is to do with the ownership of corporations, or the share market.

In princile the concept of the share market is a good one, it’s a way for people to sell portions of their business or for a business to raise capital. In practice it results in corporations being owned by people whose primary interest is seeing the value of those shares increase over short term, which leads to a destructive push for ever increasing growth by any means. This is in contrast to most privately owned (as in not openly traded) businesses which will grow if possible but are largely happy with a continual and stable revenue stream.

I have no solution to this problem. In many ways this super-motivation is what has driven the industrial revolution, but it’s also the cause of every evil of the corporate system. It is what pushes industries to do things that are against their long-term interest in order to provide short-term growth, like fishing cod stocks out of existence.

19

A constituent part of that problem is that the control of companies tends to concentrated in fewer and fewer hands.

Most publicly traded companies are probably mostly owned by pension funds and other agglomerated savings plans. So the company’s actual ownership is widely spread.

However, control of the companies rests in the hands of a few fund managers who are judged on the relatively short term performance of the shares they place in their funds whereas their customers interests are much more closely linked to the long term performance of those shares.

20

The OP takes two words that are essentially interchangeable, comes up with two definitions that make them different, and then asks why they’re different.

They’re different because you’ve decided to define them as being different. How are they different? They’re different in all the ways you’ve defined them as being different, if we go by your definitions.

“Capitalism” is little more than the legal right to property, and is advocated based on the idea that when people can own stuff, it encourages them to do good by the rest of the world for the sake of self-profit. There’s really nothing more nor less than that. And it’s exactly the same as free enterprise outside of a connotation or two.