DGS49
Diamond Member
When I hear people talking about the evils of capitalism, unearned profits, and concerns of that type, I like to bring up a simple and easily understood example of basic capitalism: Flipping houses.
Consider:
You have an entrepreneur who wants to buy a house that "in distress." For one reason or another it has fallen into disrepair and the owner wants to get rid of it - quickly. The owner/seller is glad to get rid of the house, though maybe a little bit disappointed that it didn't get top dollar.
The entrepreneur then hires a number of contractors to repair and improve the house, using her own creativity and the advice of real estate professionals to make the additions and changes that will make it most desirable to prospective buyers. These contractors are happy to get the work and to get paid on time by a reliable client.
The entrepreneur then puts the house on the market, generally at a below market price so that it will sell quickly. The buyer is happy to acquire a house that is in perfect condition, with all or most of the features she was looking for.
Win. Win. Win.
The seller is happy, the contractors are happy, the buyer is happy, and the entrepreneur makes a profit so she is happy.
Nobody was taken advantage of. Nobody lost.
The entrepreneur didn't "do" anything. She didn't clean the house, make any repairs, install the new cabinets, or work on the new landscaping.
This is a paradigm of capitalism. The capitalist starts with an idea that will create value for some target person or group. She marshals the resources and the financing to make it happen. She buys the raw materials, hires the workers, and sells the goods to a customer who has decided that among all the possible suppliers, this one is the most advantageous. Nobody loses and the capitalist hopefully makes money. Maybe a lot of it.
The only reason to be resentful is because YOU were too stupid or lazy to do the same thing.
Consider:
You have an entrepreneur who wants to buy a house that "in distress." For one reason or another it has fallen into disrepair and the owner wants to get rid of it - quickly. The owner/seller is glad to get rid of the house, though maybe a little bit disappointed that it didn't get top dollar.
The entrepreneur then hires a number of contractors to repair and improve the house, using her own creativity and the advice of real estate professionals to make the additions and changes that will make it most desirable to prospective buyers. These contractors are happy to get the work and to get paid on time by a reliable client.
The entrepreneur then puts the house on the market, generally at a below market price so that it will sell quickly. The buyer is happy to acquire a house that is in perfect condition, with all or most of the features she was looking for.
Win. Win. Win.
The seller is happy, the contractors are happy, the buyer is happy, and the entrepreneur makes a profit so she is happy.
Nobody was taken advantage of. Nobody lost.
The entrepreneur didn't "do" anything. She didn't clean the house, make any repairs, install the new cabinets, or work on the new landscaping.
This is a paradigm of capitalism. The capitalist starts with an idea that will create value for some target person or group. She marshals the resources and the financing to make it happen. She buys the raw materials, hires the workers, and sells the goods to a customer who has decided that among all the possible suppliers, this one is the most advantageous. Nobody loses and the capitalist hopefully makes money. Maybe a lot of it.
The only reason to be resentful is because YOU were too stupid or lazy to do the same thing.