In the text Capitalism, A Very Short Introduction by James Fulcher, he defines capitalism as “the investment of money in the expectation of making profits”. He starts off the text by describing one of the early examples of a capitalistic venture, sending people out to sea to gather resources which were uncommon back at the mainland. When I first learned of capitalism I pictured people adjusting prices or using new technologies in order to get customers and stimulate competition. However after reading this text I understand that capitalism can be as simple as buying low and selling high. Fulcher explains how people from Europe who didn’t have access to certain spices and goods found in foreign countries would have to pay a lot to utilize them. With this being the case, people realized they can make a lot of profit if they go abroad and find these goods. They purchase the goods at a very low price or steal them and then go back to their hometown and sell them. In the East India Company’s first expedition to the East Indies, the shareholders of the voyage racked up an impressive 95% profit using this strategy. However, this was only the beginning as everything started to expand to the point where companies are now publicly traded allowing anyone to get a piece of the pie.
When anyone thinks of America, they think of how it’s capitalism creates economic freedom and allows the country to prosper. Some may even think that the idea was first practiced there. However, it is clear that many other nations were doing this and brought the economic system over to the United States. Additionally, when you look at the current stock market you must ask yourself, how did something so big become so widespread throughout the world? Reading this piece made me understand that the stock market can be dumbed down to something as simple as buying something that you think will increase in price and then selling it. You’re paying for the risk of losing your money to potentially make a profit. Capitalism is a very complex system, however it is so present in the world today that it is seen in our lives everyday.
A strong post—clear and concise. I appreciate your insights into how the reading changed your thinking about capitalism, but now that we’ve come up with the simple, but useful, definition of “buying low and selling high,” it may be necessary to get complicated again! There’s a big jump in your post from the East India Co to “everything started to expand to the point where companies are now publicly traded,” but how does Fulcher begin to fill in the blanks about what happened in between (he mentions stock markets in particular)? Similarly, if capitalism was “invented” elsewhere, why has it become so synonymous with the United States, as you point out?
These are really just different ways of asking the question you pose in the middle of paragraph 2, in other words, “how did we get here”? As the semester goes on I hope we will be able to add insights that help to answer this question.