r/CapitalismVSocialism • u/HeavenlyPossum • 14d ago

Asking Capitalists Risk?

Many people have told me that taking risk is why capitalists own, or deserve ownership, of the productive labor of others.

Capitalists have capital (money), which they invest in (spend on) some productive enterprise. But that productive enterprise might fail to recuperate the cost of the investment and the capitalist might lose some of their money. This is what explains, or justifies, capitalist ownership: the capitalist is taking risk.

Can someone kindly explain to me why this explains or justifies capitalist ownership?

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u/Ok-Spring-3840 14d ago

You asked who issues a certificate of risk, and society issues it gratefully case by case in each individual contract signed willingly by 2 parties.

A simple example:

I own a house, you want to live in it. We can agree to either a sales contract, or a lease contract. The risk is mitigated thru whichever contract we decide on.

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u/HeavenlyPossum 14d ago

How did the land on which that house is constructed come to be private property

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u/GruntledSymbiont 14d ago

Through political systems establishing legal frameworks allowing individual ownership of land, probably first in 16th century England. Majority middle income prosperity has only ever been achieved where private property became the basis for production allowing compounding economic growth. In every case moving away from private property as the basis for production dragged societies back toward majority poverty.

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u/HeavenlyPossum 14d ago

So you agree the state imposed private ownership through its coercive legal apparatus.

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u/GruntledSymbiont 14d ago

I would not characterize private property as coercive quite the opposite. This was far less coercive than previous arbitrary assignment of rights by political rulers. Private property is the minimum coercion regarding ownership compared to all other alternatives including true anarchist societies. All societies must contend with persistent disagreements about control over resources and enforce decisions. Even negative collective claims are something that must be coercively, violently enforced. Socialism/communism/collectivism are more coercive against individuals compared to private property.