A Capitalist is an individual who invests his personal wealth (or another’s wealth, such as Bankers do) into future production with the intention of increasing wealth through the successful increase of products or services. That is all a capitalist is. Simply said, he is using his (or another’s) money to increase production and thus make more money or wealth.
Wealth is necessary for any capitalism to be engaged upon. But not everyone who has wealth is engaged in capitalism.
Here is an example which shows five basic ways in which wealth can be handled.
Roger has accumulated a million dollars of wealth (either through his own production or perhaps an inheritance). This is money which Roger does not necessarily need to maintain his current life style. What are his options?
i) He could spend the money on items and services he needs or wants. These could include a larger or nicely located home, a more expensive means of transportation, traveling, or any luxury item or service which he thinks may boost his self-esteem and perhaps admiration from others.
ii) He could donate the money to a charity within his community which could be used to increase the standard of living for his community, such as a church, hospital, or educational facility.
iii) He could put the money in a home safe or perhaps in a bank Safety Deposit Box.
iv) He could deposit his money in various banks, where it would be better guarded from direct theft. Here the money is used by the banks to make loans to others in the community. Roger would be increaseing his wealth through interest payments received from the bank.
v) Roger could choose to invest the money into his or another’s business with the idea of increasing the production of the business and thereby increase his wealth in the future.
It is also possible and very likely that Roger (more…)