Capitalism

 The Natural Economy Vs. The Forced Economy
  There once were two islands. Each had tribes numbering about 100 people each. Each day, the members of the tribes would go out and collect fish in the ocean, hunt birds and lizards, pick fruit from the trees and roots from the ground.
This was the natural state of things until one day, the chief from the Socialist island notices that some families were very good at hunting and gathering and had collected a lot more food than the other tribal families.  The chief -being a very caring person -wanted all people to have equal food. So the chief said to a few of his subjects “ you will not go and hunt and gather, instead you shall spend your day going around making sure all families have the same food stocks. You will take from those with abundance and give to those who have less food so that all families can be economically equal. Take some of the food for yourself.”
The Socialist island soon grew poor. Not only were there less people who hunted and gathered, there were also unintended changes of behavior. People who used to hunt and gather plenty grew tired of all of their toil being taken so they only brought in half as much food. Some of the people on the Socialist island stopped working altogether because they learned that they could not work and they would still be fed. The socialist island grew poorer and poorer.
Meanwhile, on the capitalistic island, they all worked to gather food and they even had surplus food that could be used to allow some member of the tribe to research new ways to hunt and gather more efficiently. The research paid off and the total food hunted and gathered grew. 
It was only a matter of time before the capitalistic island grew so economically powerful and the socialist island so poor that the socialists had to admit that their system of forced economic equality had failed.
-Losely based on the book
How an Economy Grows and Why It Crashes by Peter D. Schiff and Andrew J. Schiff
 
 
 
 Capitalism is a natural system in which people are free to own and save valuable things (Savings).  Note that valuable things may be as simple as food, water, money or as complecated as stocks, bonds and Real Estate.
 
  When people are free to have savings, investment follows.  It is the investments that make capitalistic countries so rich.  Nations such as Cuba, that do not allow savings but instead confiscate all things valuable, are stuck in the same state of development as when investments stopped. The rich become poorer and after all of the rich's money is taken, everyone gets poorer. Ini Cuba there are not rich people and no development either. Note that in China today, they allow rich American and other to invest and that is the key to their development.
 
  That is why it is of paramount importance to the prosperity of people that people are not inhibbitted from saving and investing.
 
  Great injury has occred when people reason that there should not be rich people or that the rich should be taxed until they are poor. However, people who invent things should be rich so they can invent more things. People who make good investments should be allowed to be rich so they can make more good investments. Of course people who rob banks or commit fraud should have their wealth stripped of them - they are criminals. But this is another subject to be covered later under the chapter entitled Criminal Corporations.  
 
 Here are some good rules for a Free Market system:
 
1. Keep taxes low so that there will be more savings, investments and development.
2. With the exception of when a crime has occured, do not redistributed wealth - it will end with all being poorer.
3. Do not tax or hinder investments - investments will not only make the invester richer - but all people richer.
4. Create laws that reward investors such as patent laws.
5. Create a court system that provides a fair and just market and prevents theft, cooersion.
 
 
  Politicians have learned the hard way that to increase economc development it is better to reduce taxes on the rich then give the poor the taxes from rich. It seems the rich are rich for a reason - they are better at investing than the poor. 
 
  In 1776, the word Capitalism had never been used in the English language. It was not until the invention of forced systems (Socialism and Communism) that the free market system was given a name. Today there are millions of Americans who identify themselves as socialists - a problem that the American Revolutionaries did not have to overcome and a serious problem for those of us who wish to live in prosperity.
 
The Story About Investment By Jesus Christ (LUKE 19 The Message)
 
 12-13"There was once a man descended from a royal house who needed to make a long trip back to headquarters to get authorization for his rule and then return. But first he called ten servants together, gave them each a sum of money, and instructed them, 'Operate with this until I return.'
 
 15"When he came back bringing the authorization of his rule, he called those ten servants to whom he had given the money to find out how they had done.
 
 16"The first said, 'Master, I doubled your money.'
 
 17"He said, 'Good servant! Great work! Because you've been trustworthy in this small job, I'm making you governor of ten towns.'
 
 18"The second said, 'Master, I made a fifty percent profit on your money.'
 
 19"He said, 'I'm putting you in charge of five towns.'
 
 20-21"The next servant said, 'Master, here's your money safe and sound. I kept it hidden in the cellar. To tell you the truth, I was a little afraid. I know you have high standards and hate sloppiness, and don't suffer fools gladly.'
 
 22-23"He said, 'You're right that I don't suffer fools gladly—and you've acted the fool! Why didn't you at least invest the money in securities so I would have gotten a little interest on it?'
 
 24"Then he said to those standing there, 'Take the money from him and give it to the servant who doubled my stake.'
 
 25"They said, 'But Master, he already has double . . .'
 
 26"He said, 'That's what I mean: Risk your life and get more than you ever dreamed of. Play it safe and end up holding the bag.
 

  A capitalistic system must provide a way for a surplus to be transformed into technological innovations that create more production. People have surplus, then they invest that surplus into projects that are likely to provide more production (Return on investment), then all enjoy the increased production. Communist systems fail when they take all the surplus and invest them improperly.  The problem with systems that not free is that quite often people are not allowed to keep any surplus so there are no investments.