The Weal of Fortune

“Capitalism” is a “social system” in which any person otherwise broadly defined as a “consumer” or “dependant” may also become an “owner” of  the “factors of production” and it would seem that in the broad brush of history, the denial or abrogation of that perceived right to thrive beyond the necessities of mere consumption is the direct and arguably the only cause of revolts, revolutions and wars between sovereign nations, not to mention the many individual acts of litigation, outrage and enforcement of “ownership” with which we are all familiar. We tend to equate “capitalism” with “freedom” and the rule of a common law.

In these Letters we often speak of “investors” and “investing” in the common equities of the stock markets as if anyone could do it, and that is the case for millions of investors but not at all for the billions of people who would be investors if they could be. But that’s inevitable and something that we need to contemplate because we can’t actually live in a world in which there are only two classes of people – “owners” and “not owners” or “capitalists” and “not capitalists” or just “consumers” – despite many a regime to the contrary and complaint about the distinction that capitalism seems to engender between “capitalists” (or “owners”) and “consumers” or “dependants”.

To see this more clearly, objectively so to speak, we can grade or colour the practice of “capitalism” and “consumerism” between two extremes of what never is. In deference to the common weal, a “capitalist” should be coloured dark blue and a “consumer” deep red (deficit), but that doesn’t go far enough to satisfy the mathematics of the matter. A “pure capitalist” should actually be coloured “black” and a “pure consumer” “white” (as a sheet of paper), so that everyone in between is some shade of grey, and the reason for this, of course, is that a pure capitalist absorbs all colours and all energies (like a “black body”) and emits none, and a pure consumer emits (or reflects) all colours and absorbs none and, so, appears to be white. The “eigenstates” are all colours or energies in between.

For example, a person who has no resources at all and is basically always “hustling” for money, food, clothing and shelter is much closer to a “pure capitalist” than what we would normally think of as a “capitalist” – a person with money and resources – but then we must not overlook “entrepreneurs” who, generally, have neither but are heavy into “blue sky” ideas that we should invest in (they say). And, in contradistinction, the extraordinarily rich and idle emit all colours as money and discarded goods and services and tend to keep none. Most of us are in between in what is usually called the visible spectrum and it is well-known that the judicious combination of just three colours, red, green and blue, yields all the colours that are visible to us and each such colour is uniquely determined by that exact combination.

Exhibit 1:                         Consumers                                                        Capitalists

For example, if we are “green” now, adding more red will tend to shift us to the left (yellow or orange) and adding more blue will tend to shift us to the right (purple) but the required inputs and effects are not merely linear – they are visibly more complicated than that – one has to add a lot of “consumerism” in order to move from green to yellow or orange and only a little “capitalism” to move from green to much greener, information that might be of some help to economists and policy analysts.

All of the political “-isms” and social or moral ideologies can be located on the chart as a blend of “consumerism” and “capitalism” and if it’s not a blend then it must be either white or black. For example, “communism” tends to be on the red side, “capitalism” on the blue and “social democracy” on the green or yellow (in some people’s opinions).

Absorbing all the colours will tend to black whereas “dis-function” will tend to white and it is evident that in order that there be “life” as we know it, we need to manage our affairs so that we can live in the “visible spectrum” which is a rather small range in the range of possibilities, isn’t it.

For more information, please follow the Tags or Categories attached to this Letter or simply enter Search for additional references to any term that we have used. Two of our recent Letters, The Price of Risk, August 2012 and A Business is a Customer, September 2012, may also be helpful and data may be obtained from us (for free) in a machine readable format by request to RiskWerk@gmail.com.

Disclaimer

Investing in the bond and stock markets has become a highly regulated and litigious industry but despite that, there remains only one effective rule and that is caveat emptor or “buyer beware”.

Nothing that we say should be construed by any person as advice or a recommendation to buy, sell, hold or avoid the common stock or bonds of any public company at any time for any purpose. That is the law and we fully support and respect that law and regulation in every jurisdiction without exception and without qualification to the best of our knowledge and ability.

We can only tell you what we do and why we do it or have done it and we know nothing at all about the future or the future of stock prices of any company nor why they are what they are, now.

The author retains all copyrights to his works in this blog and on this website. The Perpetual Bond®™ is a registered trademark and patented technology of The RiskWerk Company and RiskWerk Limited (“Company”) . The Canada Pension Bond®™ and The Medina Bond®™ are registered trademarks or trademarks of the Company as are the words and phrases “Alpha-smart”, “100% Capital Safety”, “100% Liquidity”,  ”price of risk”, “risk price”, and the symbols “(B)”, “(N)” and N*.