Wednesday, February 27, 2013

The Moral Case for Capitalism

What follows is my Op-Ed in today's Orlando Sentinel

Yesterday, George Via walked Orlando Sentinel readers through the well-worn argument that capitalism is inherently based on greed, avarice, moral debauchery and a wanton disregard for the sanctity of our environment. 

In the more than two decades that I have worked in the profession of economics education, I have observed firsthand that the greatest source of economic illiteracy in our nation centers on the question of what capitalism is, what it stands for, and what it creates.

Unfortunately, popular fallacies abound - fallacies that have become part of a political doctrine and social doctrine that casts a greater threat to human progress and happiness than society can possibly imagine.

First, there is the fallacy that capitalism is based on greed.  Greed, by its very definition, gives us a society where people implicitly work to take maximum advantage of one another.  If businesses operated on this principle, customers would be routinely cheated, workers would have no protection of their natural rights and society would be worse off as a result of a quasi-forced redistribution of wealth and money to the powerful few.

Yes, there are examples of businesses who do all of these things.  Some companies do lie, cheat, treat workers badly and lobby government for favors that robs all of us who pay taxes. 

But look around you and notice how often you interact with some profit-seeking stranger who sells you a good or service that works well for a price you mutually agreed to.  Think about how often those who principally exist in society for the purpose of making money offer up wages and salaries that we agree to – and that help us take care of our needs and those of our families.  How many jobs are offered up at higher pay than we earn now with the implicit offer that if we increase our skills, education and training we can earn more next year and the year after that?

How many ‘evil’ corporations are out there producing the newest energy saving, environmentally-friendly products?  What about the new medicines, healthy foods, car safety features, home-security devices and other products and services that save or prolong our lives?

How many of us know that in our somewhat capitalistic society, Americans give around $300 billion per year to charity – a figure that is more than the entire GDP of most countries in the world?

Contrast this with nations where capitalism is shunned. 

In many countries if you are born poor, you will die poor.  India, for example, has a brutal caste system that forces 400 million people into the worst jobs imaginable – and permanent poverty – as a result of their social standing from birth.

In Africa, leaders of many of this resource-rich continent keep their people impoverished by denying any right to private property.  People know that if they want to start a small business to climb out of poverty they might have to bribe countless corrupt government officials and can be bulldozed for any reason.

All over Europe, South America and parts of Asia, central-planning by government officials is relied upon to provide food, clothing and shelter that people need.  In those nations, people go without adequate food, clothing and shelter while disease and suffering are common.

Capitalism is a miraculous system of what you might call “organized chaos”.  Every day millions of people – most of whom are strangers to us – get up, go to work and pursue their self-interest in innumerable industries and occupations.  This pursuit of our own agenda leads us to work with one another to provide our small part in the production of everything we call a want or a need.

Furthermore, we work, largely secure in the knowledge that our rights to property – our income, homes and other resources – are secure and cannot be taken by force.

With these two pillars – the right to peacefully pursue or self-interest and the right to property – we have the foundation for what capitalism really is.  That is a system that has lifted more people out of horrid suffering than any artificial system any government has ever created.

This does not mean that capitalism is perfect.  It does mean that relatively speaking, Mr. Via – and all of us, should be grateful he lives in a time and place where capitalism has been allowed to exist.

1 comment:

  1. I love capitalism and I think that giving mankind the ability to pursue their interests is the very best thing that a government can do to facilitate a healthy environment for people to prosper and have the ability to be happy. The products, services, innovation, and quality of life increase (for the most part) when people are able to do these very things. It is a wonderful system.

    Some things do make me question and pause with deep(!) concern though (for the unfortunate death of capitalism and the subsequent rise of special interest groups, corruption in politics/etc). For example, the fact that companies like Monsanto are genetically modifying the foods we eat and are not telling/alerting people with labeling so that the consumer can then decipher for themselves if they want to ingest products that have been treated with heavy chemicals, products that have been cloned... products that are not natural "food" (and essentially be a part of some wild human experiment that no one knows the answer to). It is shocking that to buy organic foods that are non-GMO and without the use of heavy pesticides you have to pay through the roof because of the ridiculous tax fees, special assessment fees/etc that our government (and companies like Monsanto) assess and lobby to organic food farms. Organic food would be much cheaper if we truly had a 'capitalistic' system but instead we are subsidizing farmers and thereby, companies like Monsanto, that are modifying and manipulating the food supply as they see fit and that is where our tax money is going -- no questions asked. It's unbelievable. Organic food prices then remain high and are not readily accessible unless you happen to live near a Whole Foods or a natural food store -- which most people don't. It is deeply concerning that this is able to happen in our "free country". Where is the consumer sovereignty? Why are companies (and there are a few that control most of what's on normal grocery store shelves in the US) allowed to do this?

    To be clear, I'm not saying this is flawed capitalism, but more so that if we had something more like capitalism, we wouldn't have a food giant out there essentially dominating the food system. Organic food would be a more coherent and accessible choice to the American consumer. Again, to be clear, I am not a Prius driving, tree-hugging person and I believe in libertarianism and capitalism, but my question goes out to ask what kind of government do we have in place that allows this to happen? Republicans and Democrats both have not really done anything to bring this issue to light. I just cannot back the idea of consuming products that are laden with chemicals and I've taken the time to do extensive research on what I put in my and my family's bodies -- but what about people that aren't even aware?

    And with all this, enter the extremely high healthcare costs in this country (higher than any other country on the planet), the rise of diseases and other major health concerns - it just really makes me pause for this once great country.

    My point after all this is, if people were aware (really, really aware) of how their food was produced, where it came from, capitalism would have a chance to inevitably respond to consumer demand. And, I know that it has (somewhat) - organic foods continue to be purchased in higher percentages - more people are making a conscious effort to carve this in to their lifestyle, but, it's still more expensive than "conventional" food. And, it's still not as accessible - save for a small, tiny, section at a Publix supermarket - with very limited offerings. If we had a more truer form of capitalism in the US I think we'd be in a better place.