Perhaps it was a mistake to trust ChatGPT, but (my short summary of) its opinion is that Ayn Rand always gained her money by writing, i.e. selling her products directly to the market, while Adam Smith was employed at a university, in addition to gaining money from his books (especially the Wealth of Nations), and only gained a passive income from investing later in life.
(It’s not important; I am just sharing my data.)
EDIT:
I guess we need to distinguish between even more meanings of “capitalist”. Consider the following examples:
Person X buys a lottery ticket on their 18th birthday, wins a few millions, puts all the money in passively managed index funds, and spends the rest of life collecting generous passive income, watching anime, and debating online.
Person Y builds a small company and hires a few employees… the business is so-so, it pays the bills but is often at the verge of bankruptcy, fifty years later it finally goes bankrupt.
Which one of these is more of a “capitalist”? The latter spent more effort capitalisting, but the former had more capital and more profit.
A major sense of “capitalism” is the historical economic sense; the sense in which we can say that there was a pre-capitalist period of human history; that most agree that we now live in a capitalist period; and we can speculate about a possible future post-capitalist period. The characteristic of capitalism in this sense is that capital is allocated to ventures via capital markets, rather than (for instance) by the decision of a monarch, workers’ council, or AI singleton.
Selling products in markets is much older than capitalism in this sense. The butcher and baker and candlestick-maker did that in the pre-capitalist period. Eā-naṡir was selling dubious copper a long time before capitalism; he just wasn’t doing it to please the shareholders with a pepped-up quarterly earnings report.
I wondered, what if you don’t use other people’s money. Are you not a capitalist then? Even if you build dozens of factories and employ thousands of people, as long as you started with your personal savings, and then grew without ever taking a loan.
But I guess the answer is that in such case, you are still using your own capital. Capital doesn’t necessarily mean other people’s money—that’s just the popular way to get started.
The fundamental difference compared to a successful pre-capitalist baker is that… he couldn’t expand his business? Like, he probably could build a bigger bakery, hire more people, bake more bread, but he couldn’t… what exactly? Separate ownership from management? Like, he couldn’t retire and hire someone else to manage the bakery, paying them a salary but keeping the rest. Or start a second bakery in another city, without personally overseeing it.
(I suspect, more realistically, if the bakery got too big, the local feudal simply found a way to take his money, so that was the practical limit: don’t stick out. Or maybe I’m too pessimistic about the property rights in the past.)
You mixed pro-capitalists: Adam Smith actually made a lot of capital from investment, while Ayn Rand never had much money.
Perhaps it was a mistake to trust ChatGPT, but (my short summary of) its opinion is that Ayn Rand always gained her money by writing, i.e. selling her products directly to the market, while Adam Smith was employed at a university, in addition to gaining money from his books (especially the Wealth of Nations), and only gained a passive income from investing later in life.
(It’s not important; I am just sharing my data.)
EDIT:
I guess we need to distinguish between even more meanings of “capitalist”. Consider the following examples:
Person X buys a lottery ticket on their 18th birthday, wins a few millions, puts all the money in passively managed index funds, and spends the rest of life collecting generous passive income, watching anime, and debating online.
Person Y builds a small company and hires a few employees… the business is so-so, it pays the bills but is often at the verge of bankruptcy, fifty years later it finally goes bankrupt.
Which one of these is more of a “capitalist”? The latter spent more effort capitalisting, but the former had more capital and more profit.
A major sense of “capitalism” is the historical economic sense; the sense in which we can say that there was a pre-capitalist period of human history; that most agree that we now live in a capitalist period; and we can speculate about a possible future post-capitalist period. The characteristic of capitalism in this sense is that capital is allocated to ventures via capital markets, rather than (for instance) by the decision of a monarch, workers’ council, or AI singleton.
Selling products in markets is much older than capitalism in this sense. The butcher and baker and candlestick-maker did that in the pre-capitalist period. Eā-naṡir was selling dubious copper a long time before capitalism; he just wasn’t doing it to please the shareholders with a pepped-up quarterly earnings report.
Great point!
I wondered, what if you don’t use other people’s money. Are you not a capitalist then? Even if you build dozens of factories and employ thousands of people, as long as you started with your personal savings, and then grew without ever taking a loan.
But I guess the answer is that in such case, you are still using your own capital. Capital doesn’t necessarily mean other people’s money—that’s just the popular way to get started.
The fundamental difference compared to a successful pre-capitalist baker is that… he couldn’t expand his business? Like, he probably could build a bigger bakery, hire more people, bake more bread, but he couldn’t… what exactly? Separate ownership from management? Like, he couldn’t retire and hire someone else to manage the bakery, paying them a salary but keeping the rest. Or start a second bakery in another city, without personally overseeing it.
(I suspect, more realistically, if the bakery got too big, the local feudal simply found a way to take his money, so that was the practical limit: don’t stick out. Or maybe I’m too pessimistic about the property rights in the past.)