Are Capitalists Thieves?

     I hesitate to even use the word "capitalist."  Capitalist
means too many different things to different people.  In this
column "capitalist" means "investor," nothing more, nothing less. 
To illustrate what happens when capitalists invest we will
consider investment in computer development.

     In 1989 I bought a computer and printer for about
$3,000.  Some companies were still selling similar computers for
$5,000.  Today anyone can buy a far superior computer for
$1,000 or less.

     Why are computers so much cheaper now?  Capitalists
invested in computer research and production.  Without that
investment computers would be no better or cheaper today than
in 1989.  In fact, in today's inflation devalued dollars, computers
would cost more than in 1989.

     Some capitalist investors earned millions on their
investments.  From whom did they steal it?  They made
millions, you only saved a couple of thousand dollars on a
computer.  Sounds like the investors won.  What really
happened?

     You and I save a couple of thousand dollars or more each
time we buy a computer, and we get a far better computer. 
With those thousands of dollars saved we can buy something we
wouldn't have otherwise had.  Those purchases also create new
jobs for workers replaced by computers.

     Millions of computer buyers reap similar gains. 
Computer buyers as a group gained millions of dollars from the
investments made by someone else.  Those computer buyers
benefited from the investment for which they didn't lift a finger
or risk one red cent, or any other color cent.

     Who gained the most, the buyers or the investors? 
Obviously the computer buyers gained by far the most from the
capitalists' investments.  How do I know that?  Do I have some
complex equation that gave the answer?

     There is nothing complex about it.  Each computer buyer
saved $2,000 or more on each computer.  The investors total
revenue was $1,000 per computer.  Most of that was
reimbursement for the cost of production.  Profits most likely
were $100 or less per computer.

     If the entire price of the computers was profit, the benefit
to the buyers was at least twice the benefit to the capitalists.  If
profits were a more realistic, but still high $100, the buyers
benefited 20 times as much as the capitalists did.  The buyers
also got the benefit of the far better computers developed at the
capitalists' expense.  If someone it being ripped off by the
capitalists, it certainly isn't the computer buyers.

     And, as the infomercials say, there is still more.  Those
computers made possible by the capitalists also greatly increased
the productivity of many, if not most, workers.  This increase in
productivity resulted either in higher wages for workers or, lower
prices for consumers.  Either way they raised our standard of
living.

     If anyone owes anyone, the consumers who gained the
most owe the capitalists who invested.  But, no one owes
anyone.  The customers have already paid the capitalists their
profits. When the capitalists sold the computers they accepted
the sale price as payment in full.  The buyers owe nothing more. 
It might be nice if the buyers thanked the capitalists, or at least
quit cursing them.

     The capitalists weren't motivated by their desire to
provide thousands of dollars of benefits for computer buyers. 
They were motivated by self interest to seek the $100 or so of
profits.  The total profits may look out of proportion.  It is only
because a few investors reaped the profits while the much
greater benefits to consumers were spread among millions.

     Consumers benefit far more than capitalists from all
productive investments.  The great drop in computer prices only
serves to make the results more obvious.  Investment is merely
one example of how free people seeking to serve their own self
interest endlessly confer incidental benefits on others.  Investors
through the ages have lifted the human race from
hunter-gatherers to where we are today.

aldmccallum@gmail.com
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Copyright 2013
Albert D. McCallum