Mother of all ideologies.

"Nothing good is ever free." One of the most prominent dialogues by one of my favorite cartoon characters, Mr. Scrooge McDuck. Who says cartoons are a waste of time? You just haven't come across Duck Tales. This statement made by Scrooge got me to think about that one belief, that one ideology, that binds us all together. Not just humans, but countries, continents, states, and every goddamn thing on this planet. A belief system that was born in the 16th century helped strengthen and fasten the industrial revolution. One of the greatest beneficiaries of this ideology has been the United States. Yes, I am talking about the mother of all ideologies, CAPITALISM. 

Capitalism is a word used variously to describe an economic and social system, a modern form of political power, a dynamic mode of production, a stage in a world historical process running from feudalism to communism, a western objective of ideological allegiance, a durable form of inequality, or, more simply, a thing. It is an economic system in which private individuals or businesses own capital goods. At the same time, business owners employ workers who receive only wages; labor doesn't own the means of production but instead uses them on behalf of the owners of capital. The production of goods and services under capitalism is based on supply and demand in the general market, known as the market economy, rather than through central planning, which is known as the planned economy or command economy. 

The purest form of capitalism is free-market, or laissez-faire, capitalism. Here, private individuals are unrestrained. They may determine where to invest, what to produce or sell, and at what price to exchange goods and services. The laissez-faire marketplace operates without checks or controls. Today, most countries practice a mixed capitalist system that includes some degree of government regulation of business and ownership of selected industries. Under communism, every person works according to his ability and receives according to his needs. But capitalism is a society where "from each according to his ability, to each according to his capital" applies. A society where people work according to their abilities, but they get rewarded according to their capital. One of the major benefits of capitalism is the process of privatization. Privatization means that the means of production, like land, fields, factories, and industries, are owned by private players. 

Similar to communism, capitalism has many subsections of ideologies with differences among them. Subsections like state, monopoly, corporate, welfare, finance, mercantilism, etc. are all part of capitalism. But two subsections that mostly conclude what capitalism stands for are privatization and less government interference. Our Prime Minister also gave a statement in which he quoted Adam Smith (the father of capitalism), conveying that the government has no business being in business. Privatization did start in India, but the speed that was anticipated lacked. Instead of just selling PSUs to private players at dirt cheap prices, the government started increasing their valuations by inflating their order books, leading to rich valuations. Two other prominent ideas of capitalism are free markets and that money begets money. 

The oldest form of capitalism is feudalism. This can be called the primitive form of capitalism. This was around the 10th century, when landlords occupied land and the farmers and laborers who worked on the land worked tirelessly to grow crops. But all the profits from the land filled the pockets of the wealthy landlords, leaving pennies over dollars for the farmers. Capitalism works similarly today. Whatever you do at whichever company, suppose you're an employee at JP Morgan. You work the whole day and get a monthly salary in return, but the company earns the profit. Obviously, there are differences. Today, we get to experience the workers right where wages are not exploited (I can't say the same about Byju's). But the beauty of capitalism is that I can earn profits and secure my future by not even working for J.P. Morgan. How's that possible? By being a part owner and investing in that company through the stock market. 

Modern capitalism started in the 16th and 17th centuries in Britain and the Netherlands. The first stock exchange in the world was the Amsterdam Stock Exchange, and the first company to be listed was the Dutch East Indian Company in 1602. More or less, the idea of modern capitalism was crafted by Adam Smith. The Wealth of Nations, a book written by Mr. Smith, deserves to be in your library. He talked about a policy of laissez-faire, a French word that literally means "leave alone,"  asking the government to leave the economy alone without any interference. From here, free market capitalism started. When governments don't intervene, the competition becomes worth fighting for. Without interference, competitors can work on either developing the quality of their product or figuring out ways to sell it at cheaper rates to gain market share. Whatever the motive, when Laissez-Faire is implemented, it brings out the best in everyone. It forces us to innovate and think of new ideas to lead the race. 

Google, Apple, Microsoft, Reliance, Adani, etc. are the epitome of what capitalism can create. All of these businesses were started with the idea of providing something that already existed but with better quality at reasonable rates. Google has created a monopoly in the search engine business, earning billions and providing something valuable to society in the process. These companies worked in their own interests but also benefited society. Adam Smith also talks about the division of labor, under which every person specializes in his work, and because of specialization, productivity and efficiency increase rapidly. This is one of the reasons for the success of capitalism across the world. Everyone realized that if they wanted to work in a better manner at a faster speed, division of labor and specialization were necessary. 

By implementing all these ideas, the industrial revolution began. Even though the initial years of the industrial revolution were filled with merciless landlords and starved workers, thankfully that isn't the case anymore. But, as always, the grass is always greener on the other side. As strong are the arguments for capitalism, so are the arguments against it. Critics have said that capitalism is dehumanizing. To use financial logic in one area might work, but to apply that in all areas of life can be problematic and even dehumanizing (I don't agree). Critics also say that capitalism creates moral guilt. Many capitalists practice mindfulness as moral compensation. As these individuals make more and more money while using labor and resources from less-affluent regions of the world, they can carry a sort of subconscious "guilt" within themselves. People also say that capitalism gives false illusions that if enough degrees and experience are amassed, a person can safeguard themselves against changes in income and financial stability. 

No ideology is perfect in this world. We might have a soft corner for a specific ideology, like I have for capitalism, but what I believe is that we need to align the ideology with our values and not the other way around. Someone who is very fearful and just because capitalists are fearless does something stupid will cost him a lot. I also believe that the best way to learn more about any idea is through its original source. I personally learned a lot about the core values of capitalism when I picked up The Wealth of Nations. I might sound a bit biased, but I truly believe that capitalism is the best thing that happened to humanity after tea. Let me share a monologue from the billions that will conclude this blog. Bobby's son was expelled from his school because in order to mine bitcoin from his dorm room, he almost managed to damage the city electricity transmission network. And Bobby being Bobby, he took the floor and gave a justification as to why what his son did was relevant according to capitalism. 

"I am here to give you a little bit about what the school has been holding back from you, the god damn truth. About Darwin, about scarcity, and the world you actually live in. It's not the warm swaddled place your headmaster and your parents have told you about. It's populated by people like me, who will tear you apart. Nature didn't select me. I selected myself by harnessing my nature. My son wasn't pulling a prank. He was trying to earn. And if he broke the school's code, it's because the code is wrong. Asked him to go against the DNA, which is telling each of you to be greedy. Yes. Be hungry. Subjugate and conquer because that's who we are. That's what we are. Capitalism harnesses that better than any other economic model on earth. Everything we have is because of capitalism, because someone had an incentive to get up off his ass, to out invent, to out earn, yes, and to subjugate others; less capable, less intelligent, less ambitious, less lucky, to make those capitalistic dreams come true. It's the dirty secret that you may not want to hear, but you f*****g love the results. As will you, soon enough". 

Happy Investing.