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The Markets and Capitalism

There's a lot of press about evil Wall Street and many people equate Wall Street with investing in stocks.  However, there are some big differences. From dictionary.com: "Capitalism: an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, especially as contrasted to cooperatively or state-owned means of wealth."  The term "capitalism" was coined in the mid 19th century to differentiate it from the other prevalent economic models of socialism and communism. In Elizabethan times, the only real way to have wealth was to be born into it.  As the United States was established and continued to grow and thrive, the ability for persons to accumulate wealth through hard work, intelligence, and/or business acumen became the basis for our capitalistic society.  Those that worked for others could still make a wage and earn a living, but those that took risks and built business empires were often rewarded financially.  Whether they decided to be robber barons or magnanimous was a personality trait. In the modern era, there are certainly examples of concentrated wealth, but the opportunity for commoners to grow their own wealth is still within reach.  

The purchase of the stock of a company allows anyone to grow their capital just as any other company owner.  And by buying shares of many, many different stocks, we're diversifying our risk and participating in capitalism. It will be interesting to see if the current OWS movement becomes a small footnote in our national discussion or if it will make headway to changing the way we think about capitalism and the markets.  But it would be a mistake to not remember that capitalism is what propelled our young nation into the world's superpower.  Although there may be some modern-day robber barons on Wall Street, don't draw the conclusion that corporations and the markets are the problem.  In the end, they are still the best way for the masses to create wealth.