The Capitalist Creed (Group 3)

 Money has been essential both for building empires and for promoting science.
 To understand modern economic history, you really need to understand growth.
 The modern economy has been growing massively.
 Money is an astounding thing because it can represent myriad different objects and
convert anything into almost anything else.
 Before the modern era, the astounding ability of money was limited. In most cases,
money could represent and convert only things that actually existed in the present. This
imposed a severe limitation on growth, since it made it very hard to finance new
enterprises.
 Humankind was trapped in this predicament for thousands of years. As a result,
economies remained frozen.
 Discovered only in the modern era, “credit” was introduced or known by many which is
the appearance of a new system based on trust in the future.
 The key is the trust in the future, which we refer to “credit” today.
 Credit enables us to build the present at the expense of the future. The problem in
previous eras was not that no one had the idea or knew how to use it. It was that people
seldom wanted to extend much credit because they didn’t trust that the future would be
better than the present.
 Many cultures concluded that making bundles of money was sinful.
 Adam Smith’s allegation that greed is good. “People become rich not by despoiling their
neighbours, but by making the overall size of the pie”
 The author said in the text that “Nobody wants to pay taxes, but everyone is happy to
invest” which is true especially during this time.
 The problem with capitalism is that it can’t ensure that profits are gained ethically
without regulatory intervention.

The Entrepreneur’s Dilemma

 If the global pie stayed the same size, there was no margin for credit.
 It was hard to get a loan in the pre-modern world, and when you got one it was usually
small, short-term, and subject to high interest rates.

The Magic Circle of the Modern Economy

 Credit was limited, that’s why people had trouble financing new businesses, and because
there were few new businesses, the economy did not grow. Because it did not grow,
people assumed it never would, and those who had capital were wary of extending credit.
The expectation of stagnation fulfilled itself.

Group 3 (BSMT109):
Kim Justine D. Cablay Meiji Irish S. Mauricio
Jeuelle Denise B. Frias Ann Jafhiel O. Sambrana
Ma. Joanna Rose G. Lagbas Sonny C. Tesnado Jr.
Chanel Aira Q. Mananquil