What is money?

Money is a tool of exchange that allows men to indirectly trade goods and services that they have produced in a market economy.

In a laissez-faire society, uncrippled by government bureaucrats, money is a symbol of man’s unspent production, that has yet to be consumed. When money has been earned (as opposed to looted, stolen, and begged) it is a sign of material and spiritual greatness.

What is economic power?

The power wielded by a businessmen is the power to create wealth through production, and trade. In regards to trade in a free market, a businessmen can only entice you to do his bidding, by offering you something that you judge to be of equal or greater value in return as judged of your own free-will. His power is the power of persuasion: the power to appeal to one’s mind. Such power is derived by creating value–such as when Bill Gates (Microsoft) creates better products at lower prices. The businessman’s spiritual tool is the mind–and its material counterpart–is the dollar.

What is the difference between economic power and political power?

What is the difference? The difference between political and economic power is the difference between plunder and production, between punishment and reward, between destruction and trade. Plunder, punishment, and destruction belonging to the political realm; production, reward, and trade belonging to the economic realm.

The symbol of the businessmen is a positive — the dollar — given to you voluntarily by trade. The symbol of a bureaucrat is a negative — a gun — pointed at you. The man who prefers the gun to the dollar, is the man who thinks he will be controlling the gun. The joke is on him — the results are upon all of us.

How do these forms of power operate under capitalism?

Laissez faire recognizes that political power (destruction) should only be used to fight destruction, i.e., force should only be used to retaliate and defend against those who initiate force — whether they be a gang of street thugs, or a whole nation bent at war. 

Observe that a man gains nothing from killing an attacker, he is no better off then before he was attacked — he has only prevented a greater loss (his death) by putting an end to the attacker. Only the mind creates, force destroys. When force is directed towards destroying force, its use is entirely proper, since it protects those who create.

How is a profit made?

Profit is not made by conning others, but by creating something of value that did not exist before.

As wealth is required to support one’s life, the increase in wealth through production and trade — the creation of a profit — adds to one’s life. How can the pursuit of wealth, the support of one’s life, be considered evil? In reason, it cannot.

What is a proper society?

Man can gain immense values (such as knowledge and trade) by living with other men in society, if that society is a proper society. A proper society is one where each and every man holds as an absolute the fact that every man is an end to himself, and that other men are not his pawns, nor is he theirs, or in the famous words of the hero of Atlas Shrugged, John Galt,

“I swear by my life and by my love of it — that I will never live for the sake of another man, nor ask another man to live for mine.”

Such is the credo of the individualist — the independent mind — that recognizes no authority higher than its own judgment of the truth. Since capitalism is based upon the only system that leaves each and every man free to act independently — by his own mind — it is the only moral system.

How does one obtain property from others if one is not allowed to steal it from them?

Capitalism — the social system based on individual rights — says that one may obtain property from others in only one way: by their voluntary consent. By banning the initiation of physical force capitalism leaves only one way for men to deal with each other: through the peaceful means of persuasion, by appealing to another’s self-interest. This form of dealing with others is the highest form of voluntary social cooperation, and is known as trade.

What is trade?

Trade means the voluntary exchange of values between two parties, toward their own mutual benefit. Voluntary means that no force is initiated by either party; that both parties enter the trade of their own free-will, with no guns, no knives, or no fists pointed at their heads, hearts, or backs. Mutual benefit means that both parties enter the trade of their own free-will, since they think they both think they will be better off by trading then if they didn’t.

What does trade mean for the buyer?

For the buyer, trade means that one is free to buy on whatever terms the buyer finds agreeable. If the buyer does not like the seller’s offer, the buyer is free to refuse, and is free to go somewhere else, or is free to produce the good himself, if he is so able. No one is morally allowed to physically force the buyer to change his terms of buying against his will, by threatening to expropriate the holdings of his bank account, or by threatening to imprison the buyer, if the buyer does not voluntarily agree to the terms.

What does trade mean for the seller?

For the seller, trade means that one is free to sell on whatever terms others voluntarily agree to. If the seller does not like the buyer’s offer, the seller is free to refuse, and free to find another buyer. No one is morally allowed to physically force the seller to change his selling terms against his will, by pointing a gun to his head, or by threatening to fine him a million dollars a day, or by threatening to imprison the seller, if the seller does wish to change his terms of sale for his property.

Under what conditions does a trade take place?

A trade — a voluntary exchange of values between two (or more) parties for their own mutual benefit — takes place only when the seller and the buyer agree to the same terms of exchange of their own free-will, i.e., free from the threat of physical violence and fraud.

How does free trade give rise to free competition?

It is this freedom to produce and trade — free from the threat of physical violence by private members, or public officials — that gives rise to capitalist free competition, as sellers compete with other sellers to exchange their goods for the buyer’s money; and buyer’s compete with other buyers to trade their money for the seller’s goods.

What is the meaning of competition under capitalism?

Competition under capitalism, is simply the right to life, liberty and property applied to the sphere of production and trade; free competition means that one is free to take an any action, unmolested by others, which does not violate the rights of others. This is the meaning of competition. In observing what competition is, please observe what it is not. It is this free-competition that gives rise to capitalism’s free-market.

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