When I was an undergraduate, I was planning on a double-major in political science and economics. I enjoyed both fields, and I came within a few hours of pulling that off when I decided I was getting tired and just needed an easy three to get out and move on to law school. So, I graduated with a major in political science and a minor in economics.
I am an unapologetic capitalist. One of the great frustrations in my life is our inability to convince the woefully ignorant that capitalism works for everyone – rich, poor and everything in between. In fact, it is the only socio-economic system that works, long term. Most of the poorest among us in the United States live better than the majority of people around the world.
The homeless problem in Democrat-run major U.S. cities notwithstanding, much of America’s poor not only have a roof over their heads and food in the cupboard, they also have a cell phone, often more than one television and air conditioning. Financial security, of course, is relative. Even though this country is at the economic pinnacle and being at the bottom in America will put one among the advantaged in many countries, the bottom is still the bottom, and no one wants to be there.
There was a time in America when we believed that cleverness and hard work could propel an individual not just from the bottom to the middle, but all the way to the top. We didn’t waste a lot of time envying the well-off. We got to work and hoped to join him or her. Children were taught from the cradle that, right along with honesty and charity, working hard is a virtue, that none of us is owed a dang thing that we aren’t willing to work for.
And with that ethic, America produced many extraordinary individuals who built the nation. Andrew Carnegie was born in Scotland of very poor parents. Henry Ford was born on a farm in Michigan. One of America’s more recent billionaires, Sheldon Adelson, was the son of a Boston cabdriver. Kirk Kerkorian was the son of Armenian immigrants and dropped out of the eighth grade. That’s capitalism.
I am an Ayn Rand fan. Her “Capitalism: The Unknown Ideal” was my favorite nonfiction book for years – it might still be. I had occasional differences with Ayn Rand’s philosophy, but not in any fundamental way. Her understanding of capitalism versus altruism was an eye-opener.
Merriam-Webster defines altruism, first, as “feelings and behavior that show a desire to help other people and a lack of selfishness” or, second, as “unselfish regard for or devotion to the welfare of others.” And capitalism is defined as “an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.”
While the definition of capitalism is straight-forward and a little cold, the definition of altruism implies that selfishness is bad, and altruism is warm and fuzzy. I suppose it’s true that altruism is a swell sentiment, but my difficulty is that “straight-forward and cold” works and makes “warm and fuzzy” possible.
Ayn Rand viewed “selfishness” – the way she defined it – as a virtue. She didn’t see primary regard for one’s own welfare and regard for another’s welfare as mutually exclusive. And she believed that disregard for one’s own welfare was, at least, unnatural and, if shared by too many, would ultimately destroy any society.
She was absolutely correct. There are, of course, both brutishly selfish individuals and true altruists in the world – respectively, an MS-13 gang member and Mother Theresa come to mind – but most folks fall between those two extremes, and they make the world go round!
Mother Theresa was dependent on all the “selfish” capitalists, with their concern for personal success and profit, to give to her altruistic works. I’m sure that her church supported her efforts, but the church passes a plate every Sunday to which someone must contribute in order for the church to do good in the world. Without the contributors, the dependents would soon disappear, and it wouldn’t be a peaceful passing.
Capitalism works because it is not contrary to human nature; it works with human nature. The best human beings in the world are first concerned with their own well-being. Neither the law nor any moral system expects us to stand and be killed without a fight. The generic capitalist wants to benefit herself, buying goods and services that make her happy. She needs to make money. She has a great idea for a business, so she goes to a bank and “buys” capital to invest.
Using that money, she buys equipment and the services of people who also want to make money to buy things they need and want. Together, the money that the capitalist “bought” from the bank and the labor that the capitalist “bought” from his employees make it possible to make a lot of widgets to sell to people who need or want widgets.
The equipment that the entrepreneur bought to make her widgets was manufactured by another entrepreneur and his employees, demonstrating that capitalism depends on circulating buying and selling goods and services. In the meantime, the capitalist has priced the widgets to pay her a living plus a profit which she can reinvest to buy more equipment and more labor and make more widgets.
Or, if the capitalist thinks her widget factory is big enough and wants to enjoy the “fruits,” she spends that profit on a bigger house or a ski trip to Aspen or a new car or a smart phone or tablet . . . or whatever! You might say that it is greedy and selfish to spend that profit on herself and not expand the business. No. it isn’t. She is still contributing.
By spending the money on herself and her family, the ski lodge was able to “buy” more labor and new snow-making equipment. Her house was built with the labor “bought” by several small businesses who employ people, not to mention the products manufactured by several other small businesses. Apple employs or supports over a million jobs, so keep buying those smart phones and iPads!
That’s the way capitalism works. The money keeps circulating. And what happens if our capitalist just puts all her money in the bank? Remember where all this started . . . at the bank! Our capitalist’s bank savings can be loaned to the next capitalist, and things keep rolling. What is so tough to understand about any of this? Why don’t young people today understand that capitalism isn’t just not a bad thing, it is a powerful engine for good.
Capitalism has fed and clothed more people in this world than all other “isms” combined. And capitalism makes charity, on a large scale, possible. Capitalism saves lives in earthquakes and tsunamis. It invents and innovates and discovers and creates and heals. The next time you hear “greedy American” or “capitalist pig,” feel free to laugh! That is a very ignorant person.
