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Revenge Strategy, Wasting the power of your hate on the guiltless (XLI): Our shift to walk with American Capitalism.

American Capitalism Evolution, 100 years of history.

Have a beautiful day. Wishing you a fantastic Thanksgiving week. For those who follow this blog, we are explaining the introduction of the current USA-China Trade War. This is our last example coverage in our saga “Revenge Strategy, wasting the power of your hate on the guiltless”. Last week, in our topic entrance, we dedicated a couple of posts to the last 100 years of China´s history. Today, to be fair is the turn to our hike with American Capitalism. But I will take you to a different track, not a chronology of American historic events, but showing you certain connections of variables for success or danger for American Capitalism during the last 100 years.

Evolution Horizontal protectedxblog

“Evolution”. An original aquarelle by Eleonora Escalante. Fabriano Acquarello paper, 300GSM. Size: 15″ x 21″. If you wish to buy it, please contact me. This painting takes us to the concept of evolving. The capitalism model has been growing and will continue to change if it wishes to survive for the next centuries.

Let´s begin to situate ourselves in the conceptual philosophy of the capitalist model. For those who are experts in these matters, I am so sad to cause you doldrums, but we need to refresh the basics. It is crucial because nowadays the politic-economic systems everywhere in the world are being questioned, and when doubts arise, it is better to return to the roots of our concepts. After you finish to read the following slides, you will understand fully why I consider myself an ethical capitalist, and why I do not support the communist regimes as an option to our social development. I have valid reasons beyond capitalism’s transgressions, which we will also visit on our next publications.

The capitalist model (pure classic model from Adam Smith) doesn´t match to any economy existing in the planet. According to Doctor Richard T. de George, “Capitalism has a long history, and has gone through a number of phases and stages”. Capitalism has evolved during the last century a lot. There are three features inherent to capitalism:

  1. Available Accumulation of Industrial Capital: The accumulation of large amounts of wealth available for productivity purposes. Capitalism did not exist prior to the first industrial revolution or Industry 1.0.  Hence, industrialization on a large scale is a necessary element of this model. Industrialization requires a large degree of division of labor, those who are specialists and require training, those who manage machines efficiently, those who are technically conceived, those who think and produce intellectual knowledge, etc.
  2. Private Ownership of the Means of Production: This is a distinguishing characteristic of capitalism. Only some are private owners of productive assets, which are defined as private ownership of the means of large industrial production.  The rest of the majority do not individually own these means, because they are employees, and they work for wages. Wages are the dominant source of income for the vast majority of us.
  3. A Free Market-system: A free market type system is not controlled by the government or a small group of individuals. Usually the pure free-market aims for the absence of government control and intervention. The free competition involves the possibility of anyone who chooses to enter into the market structure as buyers or sellers. Prices and wages are determined by the mechanism of supply and demand.

The last three components of capitalism always exist altogether, but each society has different cultural and political settings. In addition, there are different varieties of relationships between business and government. Richard T. De George states that historically, there have been at least six variants of capitalism. Please take a look at them:

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If you wish to download the last set of slides, click here please: Eliescalante Revenge Strategy China-USA Trade War- Capitalism and Government explained

Now that we are aware of the capitalism bemols or variants, I hope it will be clear for all of you to grasp that the United States of America, has tested all these variants since the first industrial revolution. American Capitalism is complex. From its inception to the present, it has grown, developed and evolve. “To reduce American Capitalism to one of the capitalism models described before, would be a gross oversimplification”.  The American Economic System is closely tied to the political, cultural and social system of its nation. Additionally, the American version of capitalism “postulates maturity, intelligence, and responsibility on the part of those parties operating within the economic system. It assumes that each person wishes his or her own good and that each person knows, better than anyone else what he or she wants”. That is why American Capitalism is based on Individualism.  Please revisit the glossary slides provided last week to refresh the notions of these words.

Since American Capitalism has its own evolution process, we also need to clarify that government intervention is part of the American economic system. And it is legitimate. We will explore why, on our next post. Again, I repeat it: Contrary to my last 2 posts about the history of PRC or the Chinese last 100 years timeline;  I won´t spend time to cover the American Capitalism chronology of events during the last 100 years. I believe all of us can google and learn about it on our own. What I will do is to demonstrate why a secure and courteous political foundation is crucial for the American free markets capitalism. American Capitalism doesn´t function when there is international political instability. American capitalism doesn´t grow in a fragile global economy.  American Capitalism can´t evolve with higher levels of debt anymore.  American Capitalism can´t evolve for a better model without business ethics. The current situation of Americans living beyond their means cannot last any longer, particularly for Millennials and the next Gen Z.  They can´t indefinitely consume more than they produce.  Since the end of World War II, the political foundations of the international economy have rested on American Leadership. With China racing closer to the USA, what type of balance are we watching? Two countries trying to lead the world under what premises?

Thank you for reading to me. Blessings from El Salvador


Source of references utilized to write this article:

Disclaimer: Illustrations in Watercolor are painted by Eleonora Escalante. Other types of illustrations or videos (which are not mine) are used for educational purposes ONLY.  Nevertheless, the majority of the pictures, images or videos shown on this blog are not mine.  I do not own any of the lovely photos or images posted unless otherwise stated.

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