Earlier in the week Charles had yet another brilliant Triage post.

One of the things that he mentioned is something that I’ve been trying to tell people lately when I hear things like – “see where Capitalism got us.”

I don’t see the implosion of the financial system as my kind of capitalism – which is not, simply, accumulation of capital. So here’s the quote, which distinguishes the two more clearly, as well as notes the problems of defending capitalism from the opposite side.

Michael Hudson has drawn a key distinction between the classic “capitalism” of putting capital at risk in entrepreneurial enterprises to create wealth and “rentier capitalism” which risks no capital, launches no new enterprises and which skims off rents (interest is the “rent” from capital) and non-productive gains from “financial innovations.” It has more in common with feudalism than with capitalism.

That key distinction is precisely what the propaganda machine of TPTB [the powers that be] strives to blur. Any attack on the rentier class is fended off with wrapped-in-Old-Glory appeals to the beauty and wonder and rightness of free market capitalism, as if Madoff and Steve Jobs are equivalent players. Protect one “capitalist,” and you protect them all–even the ones who aren’t truly capitalists.

Point is this: just because the rentier capitalism is being exposed for what it is, it doesn’t mean it’s a wise idea to abandon the classic sense – the one at the core of building value, products, and innovations – altogether.