Hello Katie. Capitalism has always been a topic that I am not so familiar with, but I had some understanding that capitalists were greedy. In Gilder’s article, he highlighted the better side of capitalism as a system of giving and receiving for the benefit of the economy. I agree with you that his definition makes sense when we think about capitalism because it relates to all the other topics that we have discussed so far in reference to entrepreneurship and the economy. However, even though I feel like most of the article was easy to understand, it was still difficult to discern some of his analogies. You mentioned the “mumi” as an important aspect that helped you to understand his message, but I felt like this was confusing with the language that he used. I like though how you mentioned the similarities in this week’s topic over previously discussed topics because I noticed that too. In the process of giving and receiving, we see the value in the items or services we exchange or else we would not initiate it. Giving a gift means that we see value in the person and want to repay them with something that we think they would like, and then we reciprocate those actions with items of similar value to the gift that was received. Normal exchanges occur because we see value in the item that the other person has and vice versa, making it a mutual trade.
The quote that you used explains this interaction of exchanging based on value.
“The circle of giving (the profits of the economy) will grow as long as the gifts are consistently more valued by the receivers than by the givers” (Gilder, 2012, p. 32).
I liked the way that Gilder worded this because it is true that the more a gift relates to us and brings us value, the more likely we are to reciprocate this action with something of greater value. This also follows your explanation of trades and purchases very well because we do not buy or trade something if the object in question does not bring you more value than the product you are willing to give up. The economy runs based on these continuous transactions of buying, selling, and exchanging, and is fluctuated by Adam Smith’s “invisible hand” that changes the prices based on supply and demand. I have to agree with you that capitalism is not always about personal gain like Smith was portraying in his definition, but is more of a mutual gain because of the exchange economy in which we live in.
Your conclusion paragraph really made me consider this new definition of capitalism that I was not aware of before. As I initially stated, capitalists seemed greedy rather than more giving. Saying that capitalism depends on faith is a different concept to think about. We have to trust in the people who run our economy the same way that they have to trust in us to support them for mutual benefits. It is so difficult to put our faith in other people because we live in a world that is so full of deceit for those to act in self-interest. While this whole article was about people not acting in self-interest, I believe that we still have people out there that do. We just have to hope that the majority of people are there to rightfully help each other rather than hurt each other. Capitalism is still of tough subject to evaluate, but I feel like Gilder did a great job in explaining the good side of capitalism rather than bad because it corresponds with everything else we have read about entrepreneurship and the economy.