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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsI'm a capitalist, with a small "C"
I quit working as a W-2 employee in 1974. I decided to see if I could make my way without working for any company at all. Now, 45 years later, I discover that I could, apparently. But, how did I do that? I became a capitalist. In everything I have done since I quit getting a paycheck, I have owned my means of production privately.
I started out by hanging out my shingle as a freelance writer. I bought an IBM Selectric typewriter, some stamps, some paper and got to work. Right away, I started selling articles to various magazines for amounts of money that were way too small. Using those articles, after publication, as work samples, I began getting paid more for my work from magazines that were more profitable and paid higher rates. I did that until 2007, when I quit writing for magazines.
Still, my income wasn't really as high as I wanted it to be. I was getting by, but not getting ahead. So, I shifted gears a little bit, and started writing woodworking and home repair articles. Simultaneously, I started a business as a handyman. I bought a little van, some additional tools and some camera equipment and started advertising my services. I got work from various homeowners, and explained that I would charge them less per hour if they allowed me to photograph the job so I could write articles. Almost everyone agreed, and I did a lot of work, and then wrote articles on those projects for the magazines I wrote for. Once again, I owned the means of production and worked for myself.
I also designed woodworking projects, like furniture, built the projects, wrote articles to help others do the same, and then sold the finished project to people, including some of my handyman customers. I charged a premium for those items, because the customer would also get a magazine article with the item in it to brag about.
Then, in 1984, one of my editors asked if I'd do a woodworking project book with him for Rodale Press. I said sure I would, but only for a flat fee for the entire book and only if he'd get me an IBM PC Clone and a copy of Microsoft Word for DOS to write it on. My fee for the book was equivalent to a year of income, so once I finished the book projects, which I sold to people, promising them a copy of the book with their project in it, I had some time available. I used that time to teach myself about computers, applications, and learned to do some programming.
Near the end of that year, I stopped writing about woodworking and began writing for computer magazines. Now, I owned the means of production for more articles and for a small shareware software company that I started at the same time. For the next 12 years, I wrote articles designed to help people use their computers, choose the best software for their needs, and even how to build and modify their own PCs. I also wrote software that filled gaps in what was available from the big software companies and marketed that as a separate business. All by myself. No employees. But, I was still a capitalist. I sold goods to companies that were corporations, and software to individuals, as a small software publisher, using the shareware concept, where I gave away the software and asked people to pay for it if they found it useful. Between the two businesses, once again, I was earning enough money to do pretty well, given my limited requirements.
Along the way, I got interested in collecting mineral specimens. As my collection grew, I started going to big mineral shows, like the ones in Tucson and Denver. This was in 1996. I discovered that I could grow my collection by buying specimens in wholesale quanitites for much less per specimen than buying single pieces. So, I started a new business, adding it to my software company and the writing business. The Internet was just really getting going, so I built a website that had photos and descriptions of the excess specimens from my wholesale purchases, offering them at fair prices to whoever visited the website.
At the time, that website was the second one online selling mineral specimens, so I started getting orders from around the world for the items on the website. I quickly sold out my available specimens, so I took the money that brought in, made some phone calls, and bought the excess stock of specimens from other mineral dealers. I specialized in moderately priced specimens, so I could often buy unwanted material from high-end dealers for pennies on the dollar.
In the meantime, i was still selling software and writing articles for computer magazines like PC World. I created a software program for mineral dealers and collectors that helped them manage their collections or specimens for sale and printed display labels for individual specimens. I needed software like that, so I created it. I sold that software, too, to my collector customers and other dealers. More capitalism.
All of these ventures were totally bootstrapped. No loans. No debt. No employees. My wife, also a writer, and I rented an office suite and moved our work out of our home. I built display shelves for my collection and my stock of specimens in one room and called it a Mineral Museum, which doubled as a mineral specimen shop for the few walk-in customers who showed up. The local schools did field trips to the museum, where I gave guided tours and taught an introductory class in mineralogy. Every kid went home with a nice, boxed mineral specimen at no charge. Another room in the suite was used as a shipping center and stockroom. I was very busy. It was great fun, and profitable, too.
In 2007, I sort of retired. I auctioned off my mineral collection and remaining stock of specimens on eBay and sold it all to another mineral dealer on the Internet. I shut down my shareware software business and made all of the programs available as public domain software. I stopped writing about computers and software for those magazines and took a year off.
But, I became bored, so I started writing the content for business websites, working with a web designer and SEO whiz. I'm still doing that at age 73, and will continue until I can't do it any longer or decide not to keep working.
Capitalism does not necessarily mean being a big corporation. I'm a capitalist. I own the means of production. I produce goods and services, which I sell. That's what I've done since 1974. I'm a capitalist with a small "C," but a capitalist nonetheless. Capitalism, is not necessarily a bad thing in itself. I've often had corporations as customers, and still do, but they're small companies, not huge multinational corporations. As far as I'm aware, none of them have done any harm to anyone. Most of them have employees, but I've never been one of their employees. I'm a vendor, not an employee. I've never had any employees, myself, because I haven't needed any. I've hired people as contractors to do things I didn't want to do, certainly, like put a new roof on my house, but they were capitalists, too.
That's my story of becoming and remaining a capitalist with a small "C." If you've gotten this far into reading it, thanks for your time.
stonecutter357
(12,697 posts)Humanist_Activist
(7,670 posts)through the labor of others.
Your method of employment wouldn't have changed under a socialist economy at all, to be frank about it.
MineralMan
(146,338 posts)For a while, One of my companies was an S corporation. That happened because Intel had no way to work with me unless I was a corporation, or at least an LLC. I wrote a great deal of content for that corporation as an external vendor. My companies had names. The only difference is that they had no employees. Or they had a single employee: Me. I could have expanded and hired people, but chose not to do so. I had offers by others to invest in my companies. I said no. I had many choices, but decided to remain a sole proprietorship.
All I did was stop working as a W-2 employee. I made the choice to step out of that role and become my own company. Was I self-employed? Yes, and I had a tyrant for a boss, besides.
What do you do for a living?
Humanist_Activist
(7,670 posts)working in their back room. Both jobs are non-union.
MineralMan
(146,338 posts)Last edited Mon Mar 11, 2019, 05:11 PM - Edit history (1)
In 1974, I had a BA in English and was working as a lube and tire guy in the county garage. I quit and took a different direction.
Humanist_Activist
(7,670 posts)ignorant of the economic realities of the generations that inherited your mess.
Adrahil
(13,340 posts)All capitalism requires is that the business be funded by private capital.
Capital represents the means of ownership. That's why countries like Cuba prevented such private business for a long time (they are permitted now in narrow circumstances).
Humanist_Activist
(7,670 posts)and such?
After all, he was simply self-employed, he didn't use investments from outside sources, nor necessarily labor from said sources to accumulate capital, but rather kept his profits as income for himself. Again, under a market socialist economy, nothing would change much except for precise for and nature of ownership of his clients.
lancelyons
(988 posts)Thanks. I would say that most democrats are in favor of capitalist ideas while also appreciating some socialist ideas.
I believe in starting your own business and being able to capitalize on hard work.
I do believe that capitalizing in a business does not require the hard working employees get shafted and under paid. Capitalization does not have to be driving down the cost of labor.
Hard and smart workers should also get paid more and potentially much more.
However it seems like in our capitalistic approach, its basically wealthy folks capitalizing on workers and paying them just enough to cover the cost these workers need to pay other wealthy people for good (mortagage, automobile, insurances, healthcare).
So in a sense, workers today are slaves that take their 60K job and return it all to the wealth class just so they can have a house, car, food and a little health care.
I dont think there should be anything for free per say. People should work for things but it should not be that we work 50 hours a week for barely surviving.
Some socialistic ideas are good. Common military, common road system, libraries, etc. Also medicare, social security are good socialistic ideas. There are others... an affordable health care system for all. Decent wages for all. Affordable education options, etc,etc.
USA is a hybrid of Capitalism and socialism. We need to keep that going in a way to benefit Americans the most effective way.
Yavin4
(35,450 posts)You found passions in your life, and you were able to earn a living while doing it. But your story does not prove that capitalism is good or bad thing. Capitalism is what it is. It's private ownership of the means of production to maximize profits for its owners.
I would argue that you were a lousy capitalist in that you didn't maximize your profits. You gave your customers a break because you enjoyed doing the work.
MineralMan
(146,338 posts)I got paid twice for a number of the things I did, like the woodworking projects I created for magazines, and then sold the prototype to someone. I got paid for the handyman jobs, and then got paid again for the article on how to do that job I sold to a magazine. Most of the software I created for my software company I created for my own needs and then modified to make it useful (and usable) to a broader group of potential customers. Whenever I could, I got two values out of each project. I gave mineral specimens away to all kids who visited my little museum. But some of them came back later with their parents and bought additional specimens. I suppose I ended up with a profit from that, but I never really calculated that. I'm a sloppy, sloppy bookkeeper.
I also taught entrepreneurship at the local community college for a few semesters. My slogan was, "Don't do things to make money. Make money with the things you do."
I didn't hire employees because I wasn't sure they'd produce enough for me to pay them what the job was worth. I thought about it several times and even tried to hire someone to do some simple coding to save me time. The person I hired not only did not save me time, his mistakes cost me far more time that it would have taken to do the coding myself without errors.
I'd be a terrible boss.
MineralMan
(146,338 posts)Sole proprietors are capitalists, too. Many large companies began with some person who had an idea and worked for himself until the idea proved itself.
The guy with the truck that says, "Al's Plumbing" on it is a capitalist, too. If he gets too much work, he might hire another plumber, and then another plumber, until he has a building somewhere and is no longer acting as a plumber, but as a business owner. But, he was a business owner and a capitalist from the first day he went out on a job in that truck.
There's nothing wrong with capitalism as a business model. What's wrong with capitalism is that some capitalists make profits their only goal. Some of those ventures succeed. Most do not.
The Ford Motor Company began with some guys building a car to sell. It sold, so they built some more. Those sold, too, so they built a factory, hired workers, and figured out the assembly line process to build more cars faster. But, it started out with a couple of guys who knew how to build a car.
There's nothing wrong with capitalism. There's something wrong with some capitalists. Why don't more people start their own businesses and become capitalists themselves? They're afraid to do that, or they don't have the range of skills required, or they get the idea too late, after they have too many financial responsibilities. It's hard to take that risk.
I remember my father, who worked as an auto mechanic for over 30 years for the same car dealer. He was an outstanding mechanic, and an even better diagnostician. He wanted to start his own shop, but had a wife and three kids and just couldn't bring himself to take the risk. When his last kid left home after high school, he decided to take his shot at it. He opened a little one man auto repair shop. In the first three months, he earned more than he had in an entire year at his old job. After two years, he bought a 15-acre citrus farm, his dream, for cash. He kept that shop going for several more years, and his youngest son became a partner in it. When he finally became a capitalist and opened his own business, instead of working for someone else, he found success.
Can that work for anyone? Probably not. As I said, my father was an excellent diagnostician and an excellent mechanic. He was also good with people. When he opened his shop, many people whose cars he had worked on came to him when they needed repairs. They left the dealer he worked for and chose him. He would never have known that would happen if he hadn't taken the chance.
So, if you hate your job, but you're very good at what you do, think about it. If you can get along with customers, can handle working without supervision, and have a dedication to do hard work and excellent work, then consider starting your own business. Many have done so, and have succeeded far beyond their expectations.
However, if you hate your job, hate the work you do, don't know how to do anything else, and aren't willing to serve customers cheerfully and respectfully, I'd say starting your own business probably won't work. Being your own boss either means having the toughest boss you can imagine, or it means failing. Running your own business isn't for everyone. Truly, it's not.
If you go solo, you'll be the CEO, CFO, COO, as well as the janitor, mail clerk and customer service rep. You'll be your own advertising department, production department, and line worker. You'll answer the phone when a customer is pissed off at you, and when someone tells you, "I can't pay you this week, because a check from one of my clients hasn't arrived." You'll be everyone who works for you, and you'll have to be good at all of those jobs, because the boss is a perfectionist asshole.
It's a great way to go, if it fits.
Yavin4
(35,450 posts)MineralMan
(146,338 posts)What's your data point?
pnwmom
(109,009 posts)trof
(54,256 posts)MineralMan
(146,338 posts)I'm not active on either right now though.
trof
(54,256 posts)MineralMan
(146,338 posts)pangaia
(24,324 posts)MineralMan
(146,338 posts)Honeycombe8
(37,648 posts)trof
(54,256 posts)<POP>
Hekate
(90,865 posts)...who will also never retire, as he has so many skills and interests that he also incidentally monetizes.
Wish I could have seen your Mineral Museum! I am a very amateur rockhound.
MineralMan
(146,338 posts)We get just one pass through life. Might as well do our best to enjoy it.
PufPuf23
(8,843 posts)Entrepreneur define: a person who organizes and operates a business or businesses, taking on greater than normal personal financial risks in order to do so.
Capitalist define: a wealthy person who uses money to invest in trade and industry for profit in accordance with the principles of capitalism.
A capitalist is an investor that collects money rents from investments while an entrepreneur is a businessman that creates value for ideas.
Otherwise all the more praise to you for creating your own successful career and means of support that benefits others to boot.
MineralMan
(146,338 posts)Capitalism definition, an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, ...
https://www.dictionary.com/browse/capitalism
I am and have been a capitalist.
Honeycombe8
(37,648 posts)That means that anyone with a mutual fund in his 401k or retirement plan, or buys individual stocks, is a capitalist.
I am one, then. Who knew?
MineralMan
(146,338 posts)pnwmom
(109,009 posts)and decide who to sell it to.
The state doesn't make these decisions for them, and neither does a cooperative or work-group.
Honeycombe8
(37,648 posts)I always worked for people. Not an entrepreneur. But I still believed in capitalism, and still do. I've worked for large and small businesses.
It takes a lot of work and gumption to succeed with a business, particularly a small business, and carries with it huge risks. My ex and I tried to run a sandwich shop once, and failed. So I appreciate how much goes into a small business. The long hours, the worries, the money going out daily, the small amount coming in, the high level of quality that consumers expect. That one experience killed any entrepreneurial spirit I had, which wasn't much.
The Democratic Party supports especially small businesses, I'm happy to say. But also supports large businesses. It's the American dream, isn't it? To be born in poverty but be able to rise above that through hard work and some risk.
There is something out of whack in recent years, however. The massive amounts that some businesses are raking in, but less percentage in taxes, and few feelings of philanthropy by the moguls. With the massive wealth comes massive power, and that's dangerous. Even Great Britain took steps at one point to reign in the aristocracy, when it had gotten too powerful.
But business, per se, is a good thing. It provides jobs, grows the economy, and provides goods and services. It can range from someone selling things on Ebay to Amazon. Care must be taken not to hinder the small business, and to ensure the big business doesn't amass too much wealth without accountability to the society that enabled it to do so.
MineralMan
(146,338 posts)Ask them.
Not all businesses are ethical in their operations, small or large.
KayF
(1,345 posts)this OP appears to be in reference to politicians making statements about capitalism. I don't think they're opposing you in any way. They are talking about a kind of capitalism that is an entirely different animal.
MineralMan
(146,338 posts)People use words without thinking about what they actually mean. They have a particular definition in mind when they use them, so they forget to qualify the words with the appropriate adjectives. I'm trying to make a point with this post, as I usually am when I start a thread.
There are all kinds of capitalists.
ismnotwasm
(42,020 posts)Kurt V.
(5,624 posts)Blue_true
(31,261 posts)You can launch a business that grows into something large with $200. If you have something people need and you have business savvy and a good pricing scheme, you will do ok, even if you are running the business from your dinner table to start.
Act_of_Reparation
(9,116 posts)I don't think anyone's talking about nationalizing fast food or sex toy industries. It's about healthcare, transportation, and other key, public-good sectors that can't really be trusted to for-profit organizations.
MineralMan
(146,338 posts)There is a tendency to do that among some progressives. It shows a lack of actual thinking about capitalism and capitalists. My post was written to make people think a bit longer about those terms. Without any qualification of those terms, we get nowhere in discussions. You qualified them to some degree, which is good.
Apparently my post has worked to some small degree.
LanternWaste
(37,748 posts)Other than the vague, unsupported "some progressives...."?
MineralMan
(146,338 posts)bigtree
(86,008 posts)...the one I've seen is over the contention by someone representing as a progressive that capitalism is terminally flawed.
I don't think that encompasses what you describe. I do think raising this in the midst of that debate diverts from the crux of the anti-capitalism argument which is directed at the finite, remarkably small number of corporations, 100 I believe, who are said to hold some 70% of the nation's wealth.
The flaw that's described is in that visible inequity, and really has nothing to do at all with small business folks and entrepreneurs. I'd also like to know who you think is 'lumping it all together.' This is one of the first conflations (however naive) I've seen here.
MineralMan
(146,338 posts)Perhaps that should be what we examine, as you suggest.
From time to time, a number of naive people have made many broad condemnatory statements regarding capitalism, without any qualifying language. My post is a response to such statements.
For example, there's someone right now on DU claiming that "Socialism Is America's Future." When asked for an example of a successful socialist nation, the answer was Venezuela, of all places, with the caveat that it could have been a success if it weren't for corrupt leadership.
Through reductio ad absurdum, I'm really promoting the use of qualifying adjectives when people talk about capitalism - or socialism for that matter. I'm also pointing out that almost everyone here gets a paycheck from a capitalistic firm, if they don't work for the government. A few people, like myself, do neither. Capitalism also supports sole proprietors, who really were the very first capitalists, historically.
As usual, I laid out my case imperfectly. Oh, well.
bigtree
(86,008 posts)MineralMan
(146,338 posts)In an absurd sort of way, of course.
Adrahil
(13,340 posts)"capitalism is irredeemable,"" it does exclude anything that I can think of.
I think we can identify those things we think ought to be in the public sector without issuing blanket condemnation of "capitalism."
I think most of us support expanding public sector services without destroying "capitalism."
Act_of_Reparation
(9,116 posts)People saying shit like that aren't serious people. Explaining the finer points of economic philosophy is a wasted effort. They just aren't that interested. They're here because they like the sound their sabers make when they shake them at the sky.
aidbo
(2,328 posts)If you decided to employ someone else, would you pay them the full amount of extra value they produce? For example, say you hire an employee and your revenues go up by $700 a week. Do you pay that employee $700 for that week or do you keep some of that money and pay her or him less than the value they produced?
Capitalists own the means of production and use laborers to work those means. Capitalism necessitates that laborers are paid less than the value they produce and the difference that the capitalist keeps is their profit. Capitalism is private ownership of the means of production in order to extract wealth and value from workers and natural resources and transfer it to Capital.
Because you found a way to secure your own means of production, you have been able to live off of the value you create using those means. Your experience is very different from the vast majority of people who live in the US who do not own their own means of production and just want a good job that will pay them well enough to live a happy life.
I started out by hanging out my shingle as a freelance writer. I bought an IBM Selectric typewriter, some stamps, some paper and got to work. Right away, I started selling articles to various magazines for amounts of money that were way too small. Using those articles, after publication, as work samples, I began getting paid more for my work from magazines that were more profitable and paid higher rates. I did that until 2007, when I quit writing for magazines.
In the above scenario, your means of production was the typewriter and paper I suppose? Well, those magazines that bought your articles for amounts of money that were way too small were extracting the value from your labor. You may have been writing articles, but you were not producing magazines. You sold those articles for less than they were worth to the magazine publishers because they wouldnt have bought them if they couldnt make any money off of them. You were still selling your labor at less than the value that it added to their bottom line.
MineralMan
(146,338 posts)I sold products I created to those magazines. The amount paid was acceptable to me, and was arrived at through bargaining. Different publications paid different rates. In each case, though, the price was set and agreed to before I produced the product. In most cases, i had a negotiated contract with the publication. Did I get paid enough? Enough to accept the terms of the contract.
At the beginning of my time writing magazine articles, I accepted less money, because the publications that paid more wanted proven writers. Once I had evidence of my skills, I stopped working for the places that paid less. That's how it works. Within a year, I was working for magazines with per word rates near the top of the industry.
But, all of that is beside the point. I engaged in a capitalistic venture and succeeded with it. I exploited nobody. I harmed nobody. I deceived nobody. I produced a high-quality product that was in demand. In my other ventures, I did the same. I provided excellent value for the customer's dollar. That's why I succeeded with those ventures.
In the case of my software company, nobody paid me until they had tried the product and found it of value. Nobody had to pay me to use the complete product. Even then, I doubt that more than 5% of my users ever paid for the product. The company made money because enough people paid to provide a profit, and distribution and marketing costs were approximately zero. The shareware model was a unique one and lasted only a few years. At one point, I was the Chairman of the Board of the Association of Shareware Professionals for a year, the trade organization for that particular industry. That was near the peak of that model, which faded soon after, due to a number of reasons. Too bad, because it was a fun business model and not exploitative at all.
Could everyone do what I did? No. Would everyone want to? No. Most people want to work at a job for a paycheck and leave the risks of business to someone else. Being a solopreneur is not the easiest way to go, by any means. But, it's very satisfying if it works for a particular individual.
Many people take a similar path and become their own capitalists. Others choose to work for wages. Some have few choices. Many are exploited by their employers. That's why I dropped out of that system and found a different path. I'm not alone in doing so.
aidbo
(2,328 posts)You labored with your own tools to make products and sell them, or in the case of the minerals, you bought low in quantity and sold them individually at a profit.
These actions do not make you a capitalist.
Capitalists own the means of production and employ laborers to use those means to turn raw materials into a product to sell. Laborers take the raw materials and, through their work, add value to them so they can be sold for more than the original materials were worth. If the original raw materials were worth $100 and the final product sells for $200, the value added to the raw materials is $100. The laborer does not get that $100 of value they added to the raw materials, they get something less, say $50. And the capitalist pockets the other $50. The point is that the capitalist extracts wealth from labor and raw materials without doing any work. They are able to do this because they have enough wealth to own the means of production either individually or as a small group of investors (ie shareholders).
You can call yourself a small C capitalist (whatever that means) if you want, but it doesnt make it true.
Blue_true
(31,261 posts)Oh, blue sky, I saw so many things wrong with your example.
First, the raw materials cost $100 (I assume you added in the cost of utilities in that estimate) and the product sold for $200. Bonggggg! The business closes at the end of the day.
Material costs of $100 and revenue of $200 will not allow the owner to sustain the business. In particular because the $100 made would pay the worker ($50) and federal, state and local taxes. So, the owner would maybe end up with $35. But what about the $100 needed for next week's raw materials? That certainly won't come from the $35 in the owner's pocket unless the owner adds another $65 from SONEWHERE. If I was an owner is such a situation, I would simply fire the worker(s) and shut the place down, the alternative would be financial ruin.
Your example, to me, shows that you know nothing about the dynamics of running even a non-profit, even less about running a for profit business.
Effective capitalism is about making products that meet needs, and selling those products at a price that allow sustaining of a business (buying raw materials, machinery and tools, paying workers salaries and benefits, paying federal, state and local taxes) and waking up the next Monday to start the routine over again and hopefully have enough free profit to expand the business (buy more materials, hire more workers, ect).
aidbo
(2,328 posts)Pretend the wages including payroll taxes is $75 if you prefer. The $100 on the first set of raw materials were already paid for presumably with previous revenue, or from your starting capital if you prefer.
$200 (sale price) - $75(employee wages and taxes) - $100 (raw materials cost for the next one) = $25 for the capitalist.
If a capitalist wants to increase that $25 profit, they have a few options.
1)Raise their sale price.
2)spend less on raw materials and overhead.
3)pay their employees less.
Yes, if capitalists were forced to pay their workers fairly for the value they produce it wouldnt work. That is why capitalism as a system needs a low-paid labor class in order to survive.
No apology needed for your rudeness.
Blue_true
(31,261 posts)You create money out of thin air. $100 was already spent either by borrowing or from reserves, that means the profit beyond that expenditure is $100. Then you said that the worker takes $50 of that $100 in profit, that leaves $50 for the owner to pay taxes. The owner simply won't be able to establish sufficient reserves to sustain the business without borrowing every week, that leads to disaster.
I am not being rude and your math does not make business sense. That $100 that was spent either was a loan to the owner that has to be paid back with interest, or it was from reserves that the owner somehow had (though, running through the math of your example, the owner would quickly deplete that reserve cash). There is no way that your example is that for a sustainable business. Sorry, the truth is the truth.
aidbo
(2,328 posts)Lets say you start with $100.
Well keep a running balance to satisfy you.
First you buy the Raw Materials (RM) for $100.
So your balance is $0
Then you hire your laborer. They work the RM into Final Product (FP)
You pay the laborer $50 and $25 in taxes. Your balance is -$75.
Oh no! Youre in the red!
Luckily, your customer comes in and purchases the FP for $200.
Now your balance is +$125.
Now you can buy another RM for $100. Balance $25
Pay for labor & taxes (L&T) again. Balance -$50. In the red again!
Customer buys FP again for $200. Balance is $150.
Buy new RM, balance is $50.
Pay L&T, balance is -$25.
Customer buys FP, balance $175.
Buy new RM, balance $75.
Pay L&T, balance is $0.
Customer buys for $200, balance is $200.
Buy new RM, your balance is $100. Congratulations, youve recouped your initial investment!
Rinse and repeat your balance will go up by $25 each iteration.
Again, that is 100-100-75+200-100-75+200-100-75+200-100-75+200=200
Blue_true
(31,261 posts)I sort of wished business worked that way, but believe me, it does not. I have actual experience running two businesses to boot. The first followed your plan and RIP, the second followed mine and is doing well. I will stay with my plan, thanks for the math lesson, I actually learned some new math that I dare not ever use.
pnwmom
(109,009 posts)production. He owned them as his private property and he didn't require the agreement of anyone else to sell his work product to whomever he chose.
capitalist. ... A capitalist is someone who believes in the economic philosophy of Capitalism, a system of privately-owned, for-profit businesses. A capitalist might believe in free enterprise and the individual's ability to gain wealth through intelligence and hard work.
capitalist - Dictionary Definition : Vocabulary.com
https://www.vocabulary.com/dictionary/capitalist
Adrahil
(13,340 posts)If I hire someone to, for example, do some field work while I spend more time on business operations, and my revenue goes up $700 a week, is the person I hired responsible for all that $700/wk? Not likely. Sure their labor adds value, but so does my managing of business operations. And the operating capital is one me. If my revenues drop next week, in all likelihood, my employee will still expect to get paid. So part of that "value" goes into operating reserves. And also potential expansion, and so on.
If I'm operating, for example, a handyman business, I probably also have invest capital into the equipment I'll need. a truck, tools, a ladder, insurance... so on. Again, in most cases, the employee is unlikely to bring all those things in with them. I guess I could require each employee to buy an equal share of the business, but I'm not sure that's practical.
Blue_true
(31,261 posts)I truly don't like seeing the "worker abuse by capitalism" posts. If you look at the details, the people that make them rather clearly have not run a business where they were responsible for paying bills. To me, a much more credible person is someone like the former Maryland Congressman who is running for President, he has started up and made successful two businesses, yet he is still pro-worker and pro-worker rights and liberally on all social policies.
I truly believe that if some of the blue sky socialists ran a business, dealt with the various employee issues on a daily basis and balanced the book late in the night when they are among the very last people around the business district, they would become the bitter conservatives over at Freeperville or watching Fox News. Responsible capitalism requires a clear head, a liberal that goes into owning a business with that perspective will remain a liberal and even become more liberal.
Blue_true
(31,261 posts)If I hire a worker, the person is hired with the expectation that he or she will allow me to expand output, and hopefully sales. Yes, I will pay that person less than the increased revenue because that revenue came about because of the new worker and me spending more money on materials and resources to support that worker's work, if I paid all the profit to the employee. I just as well should fire everyone and close down, because the end result if I don't will be deep debt for me.
Maybe you should try owning a business, then try what you are suggesting.
David__77
(23,553 posts)No contradiction there. Karl Marx recognized capitalism as progressive relative to what came before. I think an error of some socialist-minded people was diminishing the relative importance of overall economic development. A socialism fundamentally about redistribution of existing resources will fail, I think. It may be another matter if its aimed at using all tools available, including capitalism, to develop the economy.
Blue_true
(31,261 posts)True capitalism is about taking an idea that meets a need, creating a product and selling that product at a price that is fair to you and the customer. There is no profiteering, nor any attemp to.