{"id":5405,"date":"2026-08-30T10:11:17","date_gmt":"2026-08-30T10:11:17","guid":{"rendered":"https:\/\/interstatelogisticshubs.com\/?p=5405"},"modified":"2026-08-30T10:11:17","modified_gmt":"2026-08-30T10:11:17","slug":"how-capitalism-reduces-poverty-and-creates-wealth","status":"publish","type":"post","link":"https:\/\/interstatelogisticshubs.com\/?p=5405","title":{"rendered":"How Capitalism Reduces Poverty and Creates Wealth"},"content":{"rendered":"
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The word capitalism<\/em> was coined in the 1700s.\u00a0\u00a0The definition was vague.\u00a0\u00a0It generally meant \u201cprivate property traded freely\u201d or \u201cfree markets.\u201d\u00a0\u00a0However, most non-totalitarian countries had free markets, and these countries in Europe and elsewhere were not particularly wealthy.\u00a0\u00a0Their rural people were paupers living off the land, even in England, France, and the U.S. at our founding.<\/p>

Read more Has the Horror of the Act Itself Become the Defense?<\/a><\/p>\n

We generally regard capitalism as creating wealth, but free markets are not what created the enormous wealth that occurred in the United States.\u00a0\u00a0I knew that and studied our economic history to find out: If it was not free markets, what was it?\u00a0\u00a0What specifically were the mechanics of \u201cour capitalism\u201d that created such wealth?\u00a0\u00a0<\/p>\n

I found the answer.\u00a0\u00a0However, I also learned that capitalism cannot be taught without properly defining wealth.<\/p>\n

Wealth of a nation is its amount of usable goods.\u00a0\u00a0I use the term usable goods<\/em> to exclude paintings and other speculative items.\u00a0\u00a0Poverty is a lack of usable goods, such as clothes or food.\u00a0\u00a0A large supply of usable goods brings prices down and reduces poverty.\u00a0\u00a0We became wealthy because we produced an enormous amount of usable goods.\u00a0\u00a0But how did that happen?<\/p>\n

Usable goods are created by factories.\u00a0\u00a0It is not the amount we pay factory workers that is important; it is the millions of hammers, shoes, and vehicles they produce that create wealth.\u00a0\u00a0Farmers and utility workers can be included with factory workers who produce usable goods for millions of people.\u00a0\u00a0\u00a0<\/p>\n

Cyrus McCormick\u2019s reaper would supply a large amount of food, but sales were difficult and slow.\u00a0\u00a0The reaper would break down on farms far away.\u00a0\u00a0McCormick had difficulty traversing the country making repairs and sales.\u00a0\u00a0He solved these problems by inventing a unique idea of setting up distributors.\u00a0\u00a0He shared significant profit with the distributors.\u00a0\u00a0They stocked the product locally, performed repairs, and made sales.\u00a0\u00a0Sales grew rapidly, and McCormick Reapers were supplied throughout the country.\u00a0\u00a0The United States became an exporter of food.<\/p>\n

Here is the key to capitalism\u2019s success: When farmers tried to buy direct from McCormick, he refused and made them buy from their respective distributor.<\/p>\n

Other manufactures, of home goods, saw McCormick\u2019s success and not only set up distributors, but added another discount to include retailers.\u00a0\u00a0Again, customers were sent back to the retailers.\u00a0\u00a0Retailing became a very profitable business.\u00a0\u00a0In the 1850s, general stores appeared in nearly every town.<\/p>

Read more The Manifester In Chief<\/a><\/p>\n

It was not greed that made capitalism successful; it was nearly the opposite.\u00a0\u00a0It was the sharing of profits with all who sold the product.<\/p>\n

Prior to this, women made their own soap, household goods, and clothes and tended their own crops.\u00a0\u00a0Men planted crops, hand-forged steel tools, and built what they needed.\u00a0\u00a0Rather than make their own goods, people began to buy them at a local store.\u00a0\u00a0Rural couples were unshackled from the centuries-old life of paupers.<\/p>\n

Rural couples had been purchasing limited goods from peddlers who occasionally passed through their valley.\u00a0\u00a0Or they bought goods from catalogues.\u00a0\u00a0Returns of goods was an enormous problem, and single sales limited mass production at the factories, which kept prices high.<\/p>\n

When couples found they could buy any goods they wanted at a general store, demand for home goods exploded.\u00a0\u00a0Prices for household goods and farm equipment fell due to the resulting mass production.\u00a0\u00a0Farm families soon found buyers for their excess farm produce, and those profits were spent on fast-declining prices of home goods.\u00a0\u00a0Men could afford farm equipment, and women bought dresses rather than made them.\u00a0\u00a0Rural people and the merchants became wealthy.\u00a0\u00a0America soon became known as the \u201cland of opportunity.\u201d<\/p>\n

Incomes were rising while prices steadily fell for decades, up to and including the Roaring Twenties.\u00a0\u00a0Introduction of the income tax reversed the trend.\u00a0\u00a0In the 1930s, the lowest income tax bracket was raised to 24 percent and the highest income bracket to 94 percent.<\/p>\n

Capitalism is not simply free markets.\u00a0\u00a0We are not free to bargain for the price of milk in a store.\u00a0\u00a0We are not free to bargain with the factory.\u00a0\u00a0The epitome of free markets are barter societies in the Middle East.\u00a0\u00a0They are free to bargain with the retailer and the factory.\u00a0\u00a0High-volume factories cannot survive in a barter society, and those societies are mired in poverty as a result.\u00a0<\/p>\n

Capitalism is a self-perpetuating economic system designed to increase sales using a structure of profits for all who sell the product, and those profits are protected by the factories.\u00a0\u00a0That is what created millions of usable goods, reduced prices, reduced poverty, and created our great wealth.<\/p>

Read more Canadian Broadcasting Corporation urges staff not to call 9\/11 terrorists \u2018terrorists\u2019<\/a><\/p>\n

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\"<p><em>ImagePixabay. Pixabay License<\/a>.” class=”wp-image-1305″ width=”640″ height=”426″ \/><\/figure>\n<\/p>\n

Image via Pixabay. Pixabay License.<\/em><\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

The word capitalism was coined in the 1700s.\u00a0\u00a0The definition was vague.\u00a0\u00a0It generally meant \u201cprivate property traded freely\u201d or \u201cfree markets.\u201d\u00a0\u00a0However, most non-totalitarian countries had free markets, and these countries in Europe and elsewhere were not particularly wealthy.\u00a0\u00a0Their rural people were paupers living off the land, even in England, France, and the U.S. at our founding. […]<\/p>\n","protected":false},"author":1,"featured_media":1304,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1616,49],"tags":[],"class_list":["post-5405","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-capitalism","category-economy"],"yoast_head":"\nHow Capitalism Reduces Poverty and Creates Wealth - Interstate Logistics Hub<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/interstatelogisticshubs.com\/?p=5405\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How Capitalism Reduces Poverty and Creates Wealth - Interstate Logistics Hub\" \/>\n<meta property=\"og:description\" content=\"The word capitalism was coined in the 1700s.\u00a0\u00a0The definition was vague.\u00a0\u00a0It generally meant \u201cprivate property traded freely\u201d or \u201cfree markets.\u201d\u00a0\u00a0However, most non-totalitarian countries had free markets, and these countries in Europe and elsewhere were not particularly wealthy.\u00a0\u00a0Their rural people were paupers living off the land, even in England, France, and the U.S. at our founding. 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