A Bit 'o Random Musings on Politics, Religion, and Anything Else That Passes Through My Crazy Head

Thursday, February 19, 2009

Capitalism is the Worst Economic System, Except for...

Winston Churchill once famously said that "Democracy is the worst form of government, except for all the others." I wonder if we can say the same thing about capitalism? In light of our current economic situation, I've been thinking a lot about how much I hate capitalism as an economic philosophy.

The central organizing principle behind capitalism is simple: greed. Capitalism is premised on use of self-interest to (allegedly) serve the common good. The problem I have with this is that capitalism is mean, selfish, and heartless. It unabashedly preaches the accumulation of wealth as the most important attainment in life. No matter who you have to run over in the rat race, it is worth it if you come out on top. Here's a quote from Brigham Young:

"[Capitalists] put me in mind of some men I have seen who, when they had the chance to buy a widow's cow for ten cents on the dollar of her real value in cash, would then make the purchase, and then thank the Lord that he had so blessed them. Such men belong to the class of Christians referred to on one occasion by Charles Gunn; and, if you will excuse me, I will tell you what he said about them. He said that 'hell is full of such Christians' (Working Toward Zion, pg. 133)."

A good example of what really disgusts me is CEO pay. A recent Washington Post article ("The Blow the Working Class Saw Coming," 02/15/09) talked about hardworking Americans who are losing their jobs even as CEOs make millions. One paragraph speaks the words that millions are asking: "Does anyone really need a $20 million salary? If you have that salary, do you need a bonus? If you take that much, won't somebody else be deprived?" Is it right that in 1985 the average CEO made 40 times as much as the average worker, and today makes over 400 times as much? Do we really think this is a "good" system?

Don't get me wrong, forcing equality on people through socialism is wrong too. But it seems we've been presented with a false choice between capitalism and socialism. Shouldn't we be rooting for a kinder and fairer system than capitalism? Can't we make our society more equal without destroying liberty? I believe that a society full of faith can accomplish this, without destroying an appreciation for business talent. "The gospel does not oppose business ability, it seeks to transform the hearts of those who possess it" (WTZ, pg. 308).

One of my favorite books, which I've been quoting in this post, is Working Toward Zion - a college textbook for my social entrepreneurship class. I like it because it bashes on capitalism and socialism, and provides a third way - a way that views fellow workers as brothers and views business as a stewardship. The authors label this living a consecrated life, with our riches dedicated to the poor - they call such a society a "United Order." The book talks about individual and collective ways we can live the law of consecration - in other words, how to be a socialist in a capitalist world. "Consecration consists not only of financial contributions or physical property put in the storehouse, but in explicit choices to sacrifice, do without, and give of oneself to benefit others" (pg. 182, emphasis added). Such selflessness in antithetical to capitalism, but I believe it is the only eternal economic principle.

So, how can we throw off the shackles of capitalist oppression and move towards a better way? What policies can encourage this instead of encouraging greed? Is Capitalism really the best we can come up with? What are your thoughts?

30 comments:

  1. It's sad that in today's world, if you won't pay a CEO bajillions, you can't get very good people to run your company, because they will go where they can get more. I think your penultimate paragraph has to be our answer: we need to change ourselves first and try to influence those around us and in our communities to live more Christlike economic principles. I don't know that it will every fully happen before the millenium, but I think any improvements will be better for everyone, especially those who make the changes. Of course, you probably won't be blessed financially, but you'll be blessed spiritually etc.

    I wouldn't mind seeing a little bit more socialist capitalism in America, such as universal healthcare, but I think capitalism is the least bad economic system that can ever be lived by any group of more than about 2 people. Sucks, doesn't it?

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    1. socialism has so much resounding evidence of success....

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  2. You know, I basically agree with you. As I was reading your post, I just kept thinking of how one of our Founding Fathers talked about how the Constitution was only meant to govern a moral people--that it is wholly inadequate for the governing of any other.

    I think it's true. You're going to have problems when people aren't moral enough to realize that... you know, like you said. $20 million is far in excess of a reasonable paycheck.

    I don't think government is the answer, though--the answer has to come from inside the hearts of the people. That's why it's so important that we go on missions and be good examples and so forth. Government legislating things only makes it worse. Example: check out how much our leadership gives every year to charity. I remember reading that McCain gives routinely about 30-40% of his income to charity. Al Gore in 2007 gave $175. I know he could afford more than that. I read a quotation once--I wish I had the book with me so I could say who said it!--but it was some rich guy like the Netflix owner or something who basically defended his lack of giving as "I'm a socialist, and I don't pretend to be a Christian." In my observation, adherence to socialism leads to selfish people who need to be forced to give to others because they believe the responsibility is the government's to care for others. Personally, I think we all have a responsibility to care for each other--and less government intervention would allow us to all to, and inspire us to, help each other a little more.

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    1. Once i remember my father saying : some morning you shall open the door to find a whole family from China sitting on your Matt (written'welcome-home') with fork & knife in their hands .That was around 1964.There was a 70% démographie increase during the seventies''croissez et multipliez''...How could it happen ?

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  3. Saying that "government isn't the answer" is a bit simple, isn't it? I don't think government is *all* the answer - but shouldn't it be *part* of the answer? Can't government create incentives and policies that will encourage good behavior? I think if government remains neutral, the evil part of capitalism wins by default.

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  4. I thought this was an interesting idea: http://approachingjustice.wordpress.com/2009/02/28/yunus-on-free-market-economy/

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  5. In a perfect world, capitalism and socialism would have the same result -- capitalists would give more freely and socialists would work hard even if harder work wouldn't get them a greater reward. Unfortunately, we don't live in a perfect world. Therefore, capitalism is the best system we can have. It works pretty well even when people are selfish. It also preserves freedom, so good people that make lots of money can give to the poor as much as they want. But we need to preserve our freedom in capitalism! Otherwise we become socialistic, people are still greedy, and the system fails.

    http://www.fundamentalfinance.com/blogs/socialism-vs-capitalism.php

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  6. I don't necessarily agree that capitalism = freedom. It certainly does mean freedom for the rich, but not for those it crushes in the name of the greater good.

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  7. I agree with you. Capitalism is the worst form, except for all the others that have been tried. This is how I found your blog.

    I am currently working on a project in Canada that is trying to create a new economic and social system that competes with the current one by creating a new job market for the homeless.

    I've outlined the model in my blog.
    http://anewplayingfield.blogspot.com/

    Would love to know your thoughts.

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  8. Wow! I'm glad I'm not alone on this one. I've been thinking like this for a few years now. I was enlightened on this subject when I read "Approaching Zion" by Dr. Hugh Nibley.

    I most certainly agree with the statement that "Capitalism is the Worst Economic System, Except for..." every other we've tried. I would never consider Socialism or Communism. They're much much worse. But I as a Latter Day Saint (mormon) I cannot understand when fellow mormons defend capitalism without recognizing that it too is evil as well.

    I also agree that we are being presented with a false choice between Socialism and Capitalism. You hit it right on the head.

    I commend you for this post and I commend most of the comments left here by other people. I'll be keeping tab on your blog. Thanks for posting.

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  9. Capitalism’s beginnings are ancient. When the first among Adam’s children wanted more than their siblings it began. It has been at the core of every self-serving endeavor in history, from the Pax Romana to the Viking invasions and every greed- motivated act, in every culture, before or since. The Industrial Revolution took it to new levels, and the modern corporation has made it a sordid art form. There really is only one solution, and only a handful achieved it: The City of Enoch and The People of Melchizedek (as far as we know). So many of today’s saints worry so much about collecting money they forget about the camel and his needle dilemma. Just a thought…

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    1. I like your comment. Thanks for sharing.

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    2. "The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries."
      - Winston Churchill

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  10. The problems we have today are not capitalism, they are caused by cronyism. Cronyism is the placement of a government official in office to use his or her influence to help private parties.

    There have been few presidents in the last 80 years that were not bought and paid for prior to taking office. The same goes for Senators who are for all intents and purposes today Kings, or Lords with vast influence and ties to wealthy people. Since FDR we have not had true capitalism in this country, we've had some form of socialism to more or less degrees depending on the party in office.

    Capitalism did not fail us, we failed to protect and preserve capitalism.

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  11. So, Ben, how do we protect and preserve capitalism from itself? Capitalism is designed to lead to wealth creation, and sometimes disproportionate wealth creation. What prevents the cronyism? Can government prevent it or is it a natural consequence of capitalism?

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  12. i certainly agree with the statement capitalism is the worst economic system because the owners of the property they are the ones who benefits the most more than the people making the property or product, as a matter of fact capitalism criticizes the workers

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    1. So what policies can combat the evils of capitalism? I think it's easy to see its flaws, but harder to come up with a better (workable) system.

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  13. There are no evils of Capitalism, it like most systems are inanimate. As always, evil itself(and it's various subdivisions) in the heart of mankind are what corrupts anything with the capacity to do good amongst fellow men and in the world. The old saying: "If men were angels, no government would be necessary.", I assert: what runs the Government? Those in power have a penchant for overspending and malfeasance only then wanting to tax more when the well runs dry. Demonizing the wealthy who've earned by honest work and industry is another dead end for any society. The proclamation that someone is "too wealthy" is an absurdity and a trap that could end up leveling everyone into the very same gray and mundane existence with no desire to work hard enough to make gains for themselves or society as a whole. The two quotes of Winston Churchill come to mind: "The inherent vice of capitalism is the unequal sharing of blessings. Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery." If we continue on our current path, the latter will become reality and what you ask for now may be repaid in spades(of misery)....

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    1. You've got my vote.

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    2. Well said. Thank you!

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    3. I don't agree with a couple of things you mentioned. First of all the 'no desire to work hard enough' is not only a matter of getting enough money payed. We should learn our children different, there are a lot of other reasons why people would do something for themselves and others. Not only money. If everybody had an income not based on their work it would be an more equal world. Robots in the future will take over almost every job, lower and higher education jobs. So what is the point in keeping people at te bottom just to let a few be extremely rich. Everybody can be more than wealthy enough in the future. Churchill's statement was correct in the past, but the future is not like the past. Technology will give is more and more possibilities. Maybe we also should make less children, so that the total population comes down in numbers. But one thing is clear, that if we want to reach the next step in the human evolution, we have to reach some kind of pure equal society. With freedom in what you choose to do, buy etc etc. How you can help yourself and society. The future should only consist of enterpreneurs, everybody can be one. It shouldn't be based on money as a measure of success.

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  15. A group that is actively working to shape what our future looks like after the eclipse of Capitalism is The Zeitgeist Movement (http://www.thezeitgeistmovement.com). They pose concrete economic solutions, coupled with a new perspective on social/environmental sustainability and efficiency which, in concert with the tremendous possibility of modern technology and a phenomenon known as ephemeralization, reveals humanity's current capacity to create an abundant, post-scarcity reality.

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  16. For a glimpse of what might be next after Capitalism read Jeremy Rifkin's The Zero Marginal Cost Society (http://www.thezeromarginalcostsociety.com) in which he posits that plummeting of marginal costs is spawning a hybrid economy—part capitalist market and part Collaborative Commons—with far reaching implications for society.

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  17. The problem is not that "capitalism is mean, selfish, and heartless." The problem is that people are mean, selfish, and heartless.

    "Who can understand the human heart? There is nothing else so deceitful; it is too sick to be healed." (Jeremiah 17) "None is righteous, no, not one... there is no distinction: for all have sinned and fall short of the glory of God,..." (Romans 3).

    At least capitalism has some level of automatic accountability: if I don't pay my employees enough, they will leave and go work for my competitor. If I make products that are useless, I'll soon be out of business. If I specialize in a field that no one finds value in, I'll have to specialize in something others value.

    This inherent depravity of human nature is why our Constitution was written with checks and balances among the three branches of government, because it was recognized that power corrupts people (because "Who can understand the human heart? There is nothing else so deceitful.").

    But put all those decisions in the hands of a central committee (made up of people, i.e. mean, selfish and heartless creatures) and misery will ensue. "The inherent vice of capitalism is the unequal sharing of the blessings. The inherent blessing of socialism is the equal sharing of misery." (Winston Churchill)


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  18. The inherent vice of capitalism is the unequal sharing of blessings, the inherent virtue of socialism is the equal sharing of miseries - Winston Churchill

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  19. Capitalism is not "based on greed", it is a system which handles the efficient allocation of scarce resources. It is founded upon private property rights, which are the foundation of freedom.

    Capitalism is not a system which was devised by people, it is a preexisting law or set of laws of life which we have figured out, not unlike other laws of nature. However, there are many who misunderstand this law.

    Greed is but one of many factors involved, and one that often leads to anti-capitalist behavior from those in power - for example, driving people out of business using monopolistic business practices (think Standard Oil). Fair competition *is* another factor that is required for capitalism to work best - and one that is often distorted in our modern eco-political systems.

    One thing I would have many of the posters and readers here consider is that even if we were to say that there was no problem with CEO pay - for every CEO being paid 400 times the average worker's wage, there are far more than even 4000 people that have been pulled up out of poverty by capitalism. At least this is true in America, where the average person living under the poverty line lives in a house with a TV, cable, and a cell phone. The truth is that economics is not a zero-sum game, and capitalism is the best system discovered to date to not only efficiently allocate scarce resources, but in the process of doing so, creates wealth.

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  20. To profer an abjectly inefficient government as the answer is akin to suggesting foxes should guard hen houses based on their powers of discernment.

    "Everybody knows there is no fineness or accuracy of suppression; if you hold down one thing, you hold down the adjoining."
    - Saul Bellow

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  21. You're right that capitalism is not a perfect system and that some CEO salaries are obscene, but what's the alternative? A hyper partisan government redistributing wealth? No thank you.

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  22. Sorry to say you don't really understand what Socialism is. Socialism is democratic worker control over the means of production, an end to wage labour, private control over wealth producing property and planning over a market system of distribution.

    It has nothing to do with "imposing equality" or redistributing wealth. That's Keynesian economic theory, capitalism with a human face if you prefer.

    Look up Richard Wolff, Marxism 101 on YouTube.

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