An Introduction to Capitalism by Eamonn Butler — A Book Review

“Capitalism is the broad meaning of capital. It can be in the form of physical, financial, moral, and human resources. However, government intervention often ruins the pure meaning of capitalism”

Personally thinking, this book is more than an introduction to the real definition of capitalism. Instead, it criticizes the uprising view about socialism and common misunderstanding about capitalism being the root cause of oppression, greed, economic catastrophe, and inequality. This book argues that capitalism is actually the fundamental rationale of a liberal, cooperative, and dynamic society.

In the 3rd Chapter of this book, Eamonn Butler defines the definition of “Capital”. Eamonn defines capital into several major definitions such as:

• Physical Goods

Physical Goods are usually attributed to thins like equipment, industrial machinery, factory, or maybe office, computer, and delivery trucks. However, people usually forget to turn this type of capital to expedite their productivities. For example, maintenance in battery market will yield on electric-powered trucks/cars. Another instance, recycled-based market will propel the usage of machines, shipments, logistics, and buildings based on their true values. These kind of examples are usually neglected by people who do not see it as capital.

• Financial

Another type of capital defined in this book is financial capital. Most often, financial capital is referred as “money” used by sole proprietorship or corporate to expand and boost their efficiency. For instance, a fund manager could take a loan from bank to lend it to businesses who need it for expansion. In return, the businesses would yield profit for people who had invested in the fund manager. Everyone can be an investor. Even in Indonesia, you could learn how to invest in mutual funds or stocks only for Rp 100.000. The common misunderstanding that usually happens is that they invest with hope that they will be rich quickly. It is totally wrong. Being an expert in trading/investing needs time and perseverance in learning. Therefore, people must learn from it if they are willing to progress themselves.

• Infrastructure

Infrastructure comprises of several public facilities such as roads, bridges, and ports, which would help people to expedite their productivities. Infrastructure usually entices many debates, whether it is more appropriate to be controlled publicly by government or privately. However, we need to remember that even if it is owned by government, public facilities usually are made by our own taxes which is technically those are our facilities. Regardless, better infrastructure will also propel for better productivity.

• Human Capital

Last but not least, this is the most important capital of any others. American Economist Gary Becker did not define it as human capital, but he defined it more profoundly. Human capital is talking about ourselves, the quality of people who could be more productive. We go to school, improve ourselves, learn a lot of skills, be a polyglot, learn how to invest, learn how to keep ourselves healthy, learn how to invest in ourselves, etc. The presence of market helps us to maximize our potentials. Market will provide us formal education where we could pursue our study, market provides us stock markets to help us learn about investing, market provides us free courses on internet, market provides us gym, running tracks, and sportscenter to keep us healthy, etc. However, human capital also needs a conducive circumstances in order to robustly improve ourselves.

Nevertheless, this book argues that capitalism also needs a decent system to maximize its potentials. Therefore, the presence of state is needed. Capitalism proponents argue that the capital should not be controlled by state, defining the possibility of corruption and political interests in it. On the other hand, the presence of state will guarantee individual rights, justices and collaborations without coercion, property rights, intellectual rights, etc. Hence, the presence of state should be 50:50 restricted in this case. The supporters of capitalism argue that Democracy will be the answer to it. However, the antithesis of democracy will debate that democracy will ruin prosperity and justice because the majority collectiveness will definitely crush the minority and there is the gap that needs to be filled by state to protect individual rights whatever the forms are. As this book also states that “Moral” is one of the most necessary capital because it will form sense of competitiveness and fair competition that would eventually benefit for the market to be more productive, creative, and heterogeneous.

It will be too pleonastic if I review this book as a whole because it truly has a lot of pure meanings of capitalism inside it. Several key takeaways from this book that I might conclude are:

• Invest in Yourself

Human capital is the most important capital of all. You decide your own productivity. It is okay if you want to take a rest during weekend, but make sure you hustle during your weekdays. You determine how many languages you want to be able to speak until you die. You determine which instruments would you master in investing. You determine whether you want to be greedy or a man/woman with morals. Eventually, the market provides it all, it is YOU who will determine what you want to be, what you decide to master in, and how you want to be labelled in the society.

• Capitalism Sets You Free

Capitalism will never restrict on who you aspire to be. It will support you with many resources available for yourselves to grow your own wings and fly as high as you can as long as it is not illegal.

• Capitalism Propels Growth

As the market has already provided it all, capitalism will provide growth opportunity for everything. The economy, the people, the prosperity, etc. For instance, you can read this article because of capitalism. You are able to scroll your Instagram and Twitter because of capitalism. Even you can graduate because of the help of capitalism (if you use Google and Wikipedia). This defines that capitalism will help you to improve yourself and break your limits.

To conclude, I believe the critics that are coming from Socialists are “capitalism is unfair because it creates inequality, capitalism is the root of evil, capitalism is greedy, the rich will get richer and the poor will get poorer”. These critics are valid, but false. They forget that “Moral” is a capital and it will determine how people would be perceived in the society. My solution is, if you want to be a successful person in capitalism, you have to invest in yourself, work more than people usually work, walk more than people usually walk, sweat more than people usually sweat, because believe me, to survive in this kind of system, you have to rely on yourselves because it is you who can enrich yourself, be tolerant, and never stop learning in a market which provides it all.

Good luck, be perseverant, and always stay humble. Because when you find yourself arrogant for who you are now, the market will teach you on how to stay humble.

Regards,
Geraldine Hizkia Tanuwijaya