I once had a neighbor with whom I met once a week for a friendly game of GO, and a couple of hours of rambling conversation. The topics of our conversation were broad, but they often veered to the subject of economics and the importance of capitalism. We were in basic agreement on the values of capitalism, but often disagreed on what level of government control of capitalism is necessary to ensure that it works for the common good.
My neighbor was a proponent of laissez faire capitalism in the belief that corporations will not act against the interests of the community, while I am a bit more skeptical and feel that corporations, which are run by humans who have a tendency to be selfish when left entirely to their own devices, must be regulated to a degree or they will work against the common good in pursuit of profit. There is, in my opinion, a darn good reason for the need to regulate capital markets—the absence of compassion.
Capitalism is a system based on private ownership of the means of production and their operation for profit. In a capitalist system, decision making and investments are decided by the owners of wealth and property, and prices and distribution of goods are primarily determined by the competition in the market. This competition is only affected in small ways by consumers. If you don’t believe me, just try to buy a repair part for a Dell computer manufactured before 1999.
If you can’t produce, according to the tenets of capitalism, you get left behind. It’s up to each household to take care of those members who are unable to take care of themselves, not the corporations who build polluting power plants near poor neighborhoods.
In short, despite court rulings stating that corporations are people, they have no compassion, and the primary motivating factor of a corporation, and the people who make it up, is the quest for profit.
Just in case you’re thinking that I’m against capitalism, let me set the record straight – I am not. Capitalism promotes equality in a sense in that everyone in a capitalist society has the same chance to grab for the brass ring. This works well in theory, but the reality is that those with more money have an advantage and once they have that ring, they tend to guard it jealously. A fair chance is not the same thing as an equal opportunity. Among the best arguments for capitalism is that it promotes innovation (necessary to successfully compete for consumer attention) and it promotes free markets where pricing is based on demand not inefficiently determined by a central authority.
Some people argue that capitalism is not without compassion. There is a small amount of truth in that belief. After all; if what you produce is not what consumers want they won’t buy it. Unfortunately, there are too many examples showing that without government regulations some capitalists will bilk customers and do whatever is necessary to make profits, even if consumers are hurt. The tobacco industry’s decades long campaign to suppress information about the harmful effects of their products is a case in point. So is the fracking industry, which downplays the detrimental environmental impact of fracking while at the same time a CEO of one of the fracking companies refused to allow fracking operations near his house. In the absence of government regulations requiring a health warning to be placed on tobacco products does anyone really think the tobacco companies would have done it? I don’t think so.
Now, this doesn’t mean that all government control is good. The people in government come from the same society as those in corporations and both reflect the culture from which they come. So, maybe what we really need is a more compassionate society. – NWI
