The Psychology of Capitalism
I've been mulling this post over for several weeks, so hopefully it doesn't come out half-baked. It's inspired by listening to a couple of Dire Straits/Mark Knopfler albums, which shouldn't come as a huge surprise. I may talk more about them a little later.
It isn't my intention to criticize capitalism as a system, at least not directly. I think that it is the best form of economic organization we humans have yet to come up with in terms of what it delivers in a practical sense. It definitely needs smoothing around the edges, but I'm for it. There are aspects of it, though, that leave me uneasy.
Some of these aspects pertain to the psychology that capitalism promotes, particularly since, as capitalist theorists like to tell us, that which gets rewarded you'll get more of. In short, capitalism rewards greed. That's not a bug; it's a feature, what makes the whole thing work. It not only rewards greed by making those who are greedy, on average, wealthier than those who aren't; it also rewards them by making wealth the system's way of determining who "wins" in life.
That isn't inevitable for all people. There are lots of folks who discard that notion of winning by having the most stuff. Nevertheless, that is what the ca[italist system promotes. I don't think that anyone really needs to be reminded of various examples of this phenomena.
Capitalism came about, or at least the theory of capitalism came about, because of greed. Several people, most notably Adam Smith, noted that, while greed is a sin, it is also a very powerful driver of human action. (Make no mistake about it; Smith definitely considered greed, if not a sin, then at least a very destructive force, and bad for those who engage in it. See his Theory of Moral Sentiments.) So, why not build a system in which greed is channeled into productive output. By opening up markets, eliminating guild monopolies and other reforms, the greed of the entrepreneur was turned loose to make things better for everyone.
For the most part, it's worked. It drove the communist system into the ground. Nevertheless, I think it takes a toll. Aside from distributional questions, it can be psychologically ruinous. Greed is not good. Unless kept on a short leash, it poisons the heart, reducing one's focus to just making more money. Defining the system in that way does, I think, undo a large chunk of the happiness that the increase in material wealth provides. Some of that is due to the fact that human beings are just wired such that happiness would be extremely elusive under any system. Not all of it, though.
The idea that the system is designed to reward greed is the reason I find the rabid adoption of free market capitalism by the religious right as so mind boggling. Logically, one would think that the promotion of sin would turn them away from such a system, as they are usually easy to rile up about anything that they think promotes sin. So, it's strange. My hunch is that it is a marriage of convenience, mostly the convenience of men who have managed to gain power by delivering votes to the Republican party. I don't think that it's going to last forever and, indeed, some of the cracks are beginning to form. There are large chunks of the grassroots of religious conservatism that are forming up behind forms of economic populism that one would think that Republicans would frown upon, or at least do so in the past. If there's one thing you can say about the South, which is the roots of both religious conservatism and the current Republican party, is that it has never been in favor of small government or lack of regulation.
I got into a debate with a religious conservative one time, asking the very question of how he reconciles the New Testament with Friedrich Hayek. I didn't think that the answer I got was very coherent, but it revolved around the idea that people must be free to sin in order to make the choice to be saved. This is probably true, but then why promote a system that makes the sin more tempting and the redemption less likely. I still don't get it.
He also said, with regard to distributional issues in general, and a progressive tax system particularly, that they were just motivated by envy, and he thought that envy is a more destructive force than greed. I don't really see that, either; the only reason that greed might be less destructive than envy is because we have specifically built our economic system around greed, and did not do the same for envy. There's nothing inherent about them that makes greed less problematic.
I have also been convinced that the role of envy in trying to level economic distribution is countered by equivalent elements of spite trying to keep it tilted. There are a lot of things that the wealthy enjoy for the very reason that the non-wealthy can't join them. Think of how ubiquitous the term "exclusive" is in advertising for luxury items; they are selling the fact that other people can't buy what you are.
I don't know that this post had a real point. It's just something I've been mulling over.
It isn't my intention to criticize capitalism as a system, at least not directly. I think that it is the best form of economic organization we humans have yet to come up with in terms of what it delivers in a practical sense. It definitely needs smoothing around the edges, but I'm for it. There are aspects of it, though, that leave me uneasy.
Some of these aspects pertain to the psychology that capitalism promotes, particularly since, as capitalist theorists like to tell us, that which gets rewarded you'll get more of. In short, capitalism rewards greed. That's not a bug; it's a feature, what makes the whole thing work. It not only rewards greed by making those who are greedy, on average, wealthier than those who aren't; it also rewards them by making wealth the system's way of determining who "wins" in life.
That isn't inevitable for all people. There are lots of folks who discard that notion of winning by having the most stuff. Nevertheless, that is what the ca[italist system promotes. I don't think that anyone really needs to be reminded of various examples of this phenomena.
Capitalism came about, or at least the theory of capitalism came about, because of greed. Several people, most notably Adam Smith, noted that, while greed is a sin, it is also a very powerful driver of human action. (Make no mistake about it; Smith definitely considered greed, if not a sin, then at least a very destructive force, and bad for those who engage in it. See his Theory of Moral Sentiments.) So, why not build a system in which greed is channeled into productive output. By opening up markets, eliminating guild monopolies and other reforms, the greed of the entrepreneur was turned loose to make things better for everyone.
For the most part, it's worked. It drove the communist system into the ground. Nevertheless, I think it takes a toll. Aside from distributional questions, it can be psychologically ruinous. Greed is not good. Unless kept on a short leash, it poisons the heart, reducing one's focus to just making more money. Defining the system in that way does, I think, undo a large chunk of the happiness that the increase in material wealth provides. Some of that is due to the fact that human beings are just wired such that happiness would be extremely elusive under any system. Not all of it, though.
The idea that the system is designed to reward greed is the reason I find the rabid adoption of free market capitalism by the religious right as so mind boggling. Logically, one would think that the promotion of sin would turn them away from such a system, as they are usually easy to rile up about anything that they think promotes sin. So, it's strange. My hunch is that it is a marriage of convenience, mostly the convenience of men who have managed to gain power by delivering votes to the Republican party. I don't think that it's going to last forever and, indeed, some of the cracks are beginning to form. There are large chunks of the grassroots of religious conservatism that are forming up behind forms of economic populism that one would think that Republicans would frown upon, or at least do so in the past. If there's one thing you can say about the South, which is the roots of both religious conservatism and the current Republican party, is that it has never been in favor of small government or lack of regulation.
I got into a debate with a religious conservative one time, asking the very question of how he reconciles the New Testament with Friedrich Hayek. I didn't think that the answer I got was very coherent, but it revolved around the idea that people must be free to sin in order to make the choice to be saved. This is probably true, but then why promote a system that makes the sin more tempting and the redemption less likely. I still don't get it.
He also said, with regard to distributional issues in general, and a progressive tax system particularly, that they were just motivated by envy, and he thought that envy is a more destructive force than greed. I don't really see that, either; the only reason that greed might be less destructive than envy is because we have specifically built our economic system around greed, and did not do the same for envy. There's nothing inherent about them that makes greed less problematic.
I have also been convinced that the role of envy in trying to level economic distribution is countered by equivalent elements of spite trying to keep it tilted. There are a lot of things that the wealthy enjoy for the very reason that the non-wealthy can't join them. Think of how ubiquitous the term "exclusive" is in advertising for luxury items; they are selling the fact that other people can't buy what you are.
I don't know that this post had a real point. It's just something I've been mulling over.
posted by Comrade J. Michael Neal at 8:03 PM
3 Comments:
Why envy might be more destructive than greed (and make no mistake, socialism is the channeling of envy in the same way that capitalism is the channeling of greed):
Greed can be satisfied without hurting anyone, and possibly even by helping people. A greedy person wants more, and often doesn't care how they get it. Envy *must* hurt someone to be satisfied--an envious person wants *what someone else has*. The person being envied is not necessarily a bad person who deserves to get their stuff taken away, either.
Oh, and in addition, sometimes the envious don't even want what the other person has--they want the other person to not have it either.
I disagree that greed doesn't necessarily hurt other people. The difference is that it hurts many people diffusely, rather then one person in particular.
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