This is one of my longest posts, though if you read at 900 words a minute, it’s only a two minute read. I’ve discussed my views on capitalism briefly in another post, and I’ll be expounding those views here. My greatest enjoyment has always been exposing my ideas to different ones, and seeing whether my views can withstand the rationale behind others’ arguments. I read a bit about socialism and communism, but after about half an hour worth of effort, gave up on attempting to understand the jargon.
As one of simple logic, I’ll talk about what I consider wrong with any ideology that attempts to force human equality. And I’d like to begin with the following controversial statement: All humans are not equal.
No two humans are equal. I might be better than you in some aspects and inferior in others. To claim that we’re both equal is false. What I do believe is that despite not being equal, both of us should be treated equally. I do not believe equality to reside in absence of all discrimination. I believe that it is warranted to discriminate the distribution of resources in society on the basis of the value you offer to the society. The value of the product or service you provide determines the proportion of resources you receive. But how do you decide the value of something?
If you are bald, a comb does not hold much value for you. For someone extremely conscious about their hair, it would be a necessity. A starving farmer would not care much about a Gucci suit, whereas a board member would require it during a meeting. With such varying wants among people, it seems difficult to decide what they would consider to be of value. And there comes in the old and trusty system of determining value: demand and supply.
“The most basic question is not what is best, but who shall decide what is best.” Thomas Sowell
And the free market system lets the consumers decide. The value of something is determined by demand supply relation. If the society demands what you are producing, then there will be value for it. And here’s where most people claim to spot the immorality of the capitalist system. That although the free market system values certain commodities the distribution of profits is unjust.
The hard working laborer is poor. The person who works nine hours a day at factories is poor. The claim is that his work is valuable, yet the people at the top steal all the profits. They steal a disproportionate share from those who work.
What must be considered is that in pragmatic terms, those employed are also a resource. And their value too is determined by demand supply. When workers are plentiful the wages tend to drop.
To maximize profits is the obligation of any business to its shareholders. If you’re offering a service better than what is otherwise available in the market, then you will be paid for it. But the more replaceable you are, the lesser you are likely to be paid. And I do believe that in this sense capitalism urges one to deviate from the trodden path, to be different, to be unique. Capitalism creates an environment which encourages distinctiveness, and it is only through its uneven distribution of profits that people are inclined to undertake risks required for establishing enterprises.
I confess I have not looked into the actual evidence, but I will boldly claim that the most innovative changes have taken place in capitalistic economies. In these economies you may not seize the means of production, only earn them.
The problem people often raise is that there are poor people living extremely difficult lives. The poor will always live a difficult life. Perhaps they should. The goal isn’t to make a poor life comfortable. The goal is to ensure that there is always a road, one leading out of the poor life and into the rich. And maybe the road isn’t the easiest to tread upon, but it’s a road. If you put your resources into making life comfortable for poor, you’re reducing incentives for them to cross the obstacle ridden road and uplift themselves. I believe that’s where my opinions differ with those of socialists and communists. I don’t think the destination should come to you, but that you must tread upon the road. Those born in better off families may have fewer miles to travel, but in a free market, all can access the road. All you need is a vision, a dream, a goal to achieve.
Why should the poor travel longer? Surely, the fact that poor have to put in more effort to reach the same destination is in its very core, unfair. Perhaps it is.
I don’t study seriously the entire semester, but I scored more than quite a few of the people who did actually study. This is because I’m a fast learner. I used acronyms and semantic understanding to improve my grasp over the concepts. I used method of loci rather than rote memorization. Now assume that instead of simply scoring better, I scored the most marks in the entire school. Barely any work, and I scored the most. What would you do?
Certainly, it cannot be fair that I got more marks than the ones who worked hard. Isn’t that one of the socialist arguments? That rich people didn’t work hard and are better off than the hard workers.
Would you demand that in examinations the marks should be distributed equally? The moment you do that, you’ll diminish incentives for students to study in the exams.
This problem rose from your presumption that all people are equal, and this is why I had made a note to highlight my views that they are not. Yes, my learning techniques did help me, but even without them, I might score better than others simply because I born a faster learner. And the other people would have to work harder to score as much as me.
Is that fair? Perhaps not. Is it an unfairness which can be righted in a fair manner? I do not think so. There are certain inequalities we are born with. Our genetic makeup is one of them. Our social-economic circumstance is also one of them. I believe that we should attempt to provide a minimum starting line for everyone, but that we don’t have a right to force the better off to adhere to that line.
There should be knowledge and guidance provided free of cost in order to allow everyone to exploit their own potential to the fullest. In a capitalist economy there should be optimum utilization of resources, and I feel that human resource is being wasted in profusion. This is admittedly the only fault I can spot.
If means are provided to utilize one’s own self then we have inched as close to equality as I believe we can. On that road to richness, natural intelligence will help some, and some will be helped by rich parents. Adults must learn to be responsible for their own extent of success. Give them the opportunity, and let it be up to them to use as they will.
“Underlying most arguments against the free market is a lack of belief in freedom itself.” Milton Friedman
Most socialists and communists love to hate on rich people. “Oh, the rich guy. He is so greedy and terrible and evil. Completely apathetic. He doesn’t deserve that much money, so he shouldn’t have it. He can’t spend that much money, so he shouldn’t have it.”
And in my defense of the morality of capitalism, the strongest point would be that it does not demand other people’s money; it provides commodities in exchange of it. It preserves an individual’s economic liberty, and the first people who come to mind when I think of those denied it are slaves.
Unless the capitalist robbed people at gunpoint or scammed though through illegal means, he is entitled to the money he earns. No, it is not immoral for him to be rich while others are poor. You know why? Because the society deemed it fit. The society considered the product or service he offered to be valuable and paid him for it. Maybe you don’t consider it valuable. Don’t buy it then. Tell others why that product is not worth their money. Don’t just steal it from the rich guy.
And what if he can’t spend it. Maybe he’ll pass it on to his children. And that’s the thing, isn’t it? People say that rich children are given unfair advantage. I disagree. I don’t see the advantage as that of children, but of the parent. The parent has the advantage of seeing his child have a better start in life, having better odds to succeed. It’s one of the incentives that drove him to work. And he worked hard or he worked smart and perhaps he did both, and he managed to get into a position where can provide his children a better chance at life.
There are also multiple accusations of self interest at capitalists, which is ridiculous because there is no one exempted from that particular ‘crime’.
The predominant factor, perhaps the only one, behind our actions is self interest. Many might take offense at such a suggestion, yet I believe few could reasonably challenge it. For is it not true, that every action we take is meant to benefit us in some form or the other? And though our actions may be guided by self interests, self isn’t necessarily the only beneficiary.
Suppose you were to donate your money to a charity. You may feel morally satisfied, you may feel that you have done a good deed, and thus, it would be you that feels good. If helping others did not provide you moral satisfaction you would not have donated. The only selfless acts are those of indifference.
Speaking of charities, have you seen the any? The ones which ask for donations so that they can help poor people in some forlorn country, or provide some transplant or something? I don’t really think it’s the working class that goes and donates millions of dollars. I think it’s the rich guys who do that. It’s them who act as angel investors and help start ups flourish and become enterprises. The thing is some people try to paint all rich as devils, complete with the horn and the tail. I’m not going to say the rich are angels though. I think the rich lie in the zone between demons and angels, that zone called humans. Just the same as everyone else. At the risk of repeating Sowell again:
“The reason so many people misunderstand so many issues is not that these issues are so complex, but that the people do not want a factual or analytical explanation that leaves them emotionally unsatisfied. They want villains to hate and heroes to cheer- and they don’t want explanations that don’t give them that.”