I continue to be saddened by the way most people seem unable to distinguish between the concept of market economies and capitalism. Capitalism is merely the application of capital to increase total factor productivity. Thus capitalism can occur in a communist state - the USSR applied a lot of capital during its rush to industrialize, and did so for precisely the same reason similar things occurred in the West. And despite the atrocious inefficiencies and horrors of the Soviet Union, total factor productivity did in fact increase. Meanwhile markets are merely a mechanism whereby people can trade rather than barter. Neither capitalism nor markets should be ideologies, any more than a description of how a water pump works should be an ideology. People use words very carelessly, but this merely leads to hopelessly confused thinking and the perpetuation of a great deal of simple-minded nonsense.

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