Lately I've been pointing out that what we have in America today is not capitalism but, rather, neo-feudalism, with corporate owners in the place of the lords of the manor of old and the majority of Americans as serfs dependent upon their overlords for their every need. There are trappings of capitalism, sure. There are still markets, there are still a few small businesses bravely struggling along as chain stores and big box stores take over everything thanks to regulatory capture and monopolization of capital markets, there are still a few people who manage to create new and innovative businesses that make it. But by and large, this is feudalism, not capitalism.
Capitalism, fundamentally, is not markets. Markets can exist in the absence of capitalism, indeed, even in the absence of money, though money tends to be invented relatively rapidly because barter is such an inefficient way of handling trade. Rather, capitalism is, fundamentally, a method of time travel.
Wait wait, I hear you say. Time travel? Yes. Time travel. In pre-capitalist economies, businesses adapt to consumer needs very slowly. If Acme Widgets is selling Wurtzingers and the tastes of the general public changes towards demanding Furblacknitzes, Acme Widgets in a pre-capitalist economy must slowly accumulate the income to buy the equipment and hire the people necessary to produce Furblacknitzes. So pre-capitalist economies respond very slowly to changes in consumer tastes or desires. But in a capitalist economy, the money supply of the entire nation resides in banks as deposits (i.e., as loans to banks that banks then pool and loan out to businesses and individuals), and Acme Widgets gets a loan from the bank then pays that loan back at some future time using the money earned from selling Furblacknitzes. In short, Acme Widgets has TIME TRAVELED -- they slowly accumulated the money needed to tool up for Furblacknitzes *today* to satisfy the demand for Furblacknitzes *today*, but they did this in the future and the money traveled back in time to when they needed it!
Note that this requires a functioning financial system -- banks that provide loans to deserving businesses that need money for expansion, financial markets that sell bonds and partial ownership in businesses to similarly provide money for expansion, and so forth. And that's what we're lacking today. Banks aren't performing their job of risk aggregation -- that is, pooling the excess income of the nation and splitting it between millions of borrowers so that any one borrower failing does not cause a loss of any one depositor's entire funds. They lent out money to borrowers who they *knew* could not afford to repay the loans, and now aren't loaning out money at all. And capital markets have turned into just a giant ponzi scheme where stockholders and bondholders compete to scam each other into buying each other's overpriced stocks and bonds. If you are a small business wanting to respond to changing consumer needs today, you literally can't get money. Which is impossible in a capitalist economy, but we don't have a capitalist economy, because a capitalist economy requires there to be access to capital -- and unless you're one of the Fortune 500, that just isn't true in America today, at least not at any interest rate short of usury.
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GLOBALIZATION. The New World Order. Run by the criminal cartels, banks, big-pharma, military industrial complex, etc...
of time travel, when you get a loan, your future earmings travel back in time to fund your needs now. If it weren't for the pesky interest, this could be a great thing. Maybe it's a necessity though (the interest) because due to inflation your future money may not be worth too much. Or hey, maybe interest and inflation are just the same thing...
In our "modern" system, capital is almost always loaned in the form of money.
The retooling factory needed money. It already had a building, machines, and employees. So it really didn't need much capital. But it did need money to continue operating while it switched over to making a new product. And if it needed new machines or more employees, it would have used money to buy these things.
What allows ANY economy to work is the willingness of producers to collectively make a portion of their "capital" available to other producers for new and promising projects.
In many rural villages, the harvest (or other heavy agricultural work) is done by community work parties that rotate through the various farms. A "modern" farmer would hire workers to do this, and he would probably have to borrow money to pay them.
In both cases, there had to be an agreement in the community that sufficient capital would be available to each farmer to get the job done. The "old" system was based on a traditional agreement that each farmer would participate in the work party at the other farms and host the work party when it came to his farm. In the "new" system, the agreement is that each farmer will pay back the bank, with interest, for the money he borrowed to pay his farm workers.
So I don't see TIME as the key component. I see AGREEMENT as the key component. You don't even need money for the basic concepts of "capitalism" to work in an economy.
Time and money, I argue, are merely arbitraries added into the system in order to handle some fancied problems. The basic working principle is agreement. By convention, "capitalism" means that capital is owned privately. But "capital" exists in any working economy, even ones that don't use money.