Bill Deresiewicz, author of the NYT oped “Capitalists and Other Psychopaths,” emailed me shortly after I wrote a response to his piece here on GMP called “The Disease of More.”
“I agree with everything you say Tom, except for the notion that the two diagnoses are mutually exclusive. The attitude that says that more is better, money is everything, and other people’s problems are not my responsibility is not a corruption of capitalism; it is the essence of capitalism. The system is inherently acquisitive, tends to monetize all values, and believes that social needs are automatically addressed by the market. I’m not calling for socialism, I’m calling for what everyone after the Depression recognized as simple common sense: capitalism needs to be tempered and governed by other values and forces. The recent eruption of greed is simply an effect of the deliberate weakening of those values and forces.”
William Deresiewicz was an associate professor of English at Yale University until 2008 and is a widely published book critic. His reviews and essays have appeared in The New York Times, The New Republic, The Nation, Bookforum, and The American Scholar. He was nominated for National Magazine awards in 2008 and 2009 and the National Book Critics Circle’s Nona Balakian Citation for Excellence in Reviewing in 2010.
About Tom Matlack
I agree so much with him. This? “The attitude that says that more is better, money is everything, and other people’s problems are not my responsibility is not a corruption of capitalism; it is the essence of capitalism. The system is inherently acquisitive, tends to monetize all values, and believes that social needs are automatically addressed by the market.” rings entirely true to me.
I absolutely do not. Capitalism is a tool. It can be for micro finance that helps starving women in Mexico or it can be a ponzi scheme hedge fund. Consumerism/disease of more is how we choose to interact with the world and bring a moral POV to things. I don’t believe that socialism or Marxism or planned economies are better that a system of capitalism. Far worse. But to point the finger at capitalism as the root of all evil is to miss the real point. Which is that we ourselves are to blame.
But capitalism is a system built without much empathy…without any empathy, really. Every system (in this case economic) has it’s potential problems…and with capitalism it’s a lack of concern for anything that can’t be monetized, and the drive to always make more money. More money is always better. So it does need to be tempered with other, more empathetic social systems.
Capitalism is a tool, yeah, but like all tools there are dangers inherent to using them. So we wear safety hats and leather gloves, etc when we use them.
To be honest, the problem is not capitalism inherently, but the existence of limited liability. By allowing corporations to shield the owners and directors from responsibility is the problem. If we could and did prosecute corporate directors for the criminal conduct of their companies, you better believe that capitalism would function infinitely better. When the only penalty that a company can face is monetary, decisions are made based on simple monetary analysis. If recalling a product costs more than paying out wrongful death lawsuits, then a recall won’t happen. Why? Because financially it doesn’t make sense. If, however, we held corporate leaders responsible and the CEO of that company could face life in prison, you better believe that recall would happen ASAP.
If capitalism lacks empathy it’s because humans (sometimes) lack empathy, and there is no system which has proven capable of changing humans.
But we can create systems that provide more space for empathy. Capitalism (in the most basic sense) doesn’t. Temper it with a bit of socialism (not scary Socialism omg Soviet spies, ah!), and we can create more empathetic systems. Humans lack empathy sometimes. Capitalism lacks empathy, full stop.
Tom, will you lay out how you see all of us to blame? I’m truly curious not snark. Because capitalism encourages the consurmerism. And many can choose not to buy into it, but then…we’ve got ads 24/7 media etc encouraging everyone to consume more and more and more and so forth. Some people are smart enough to not give in, or informed enough, most seem to be buying in by buying more. Which increased demand, which increases supply.
Can you lay out where you see the problems?
We live in a democracy…
We live in a representative democracy increasingly influenced by corporate control.
See Collin’s points.
Are you including his rant about how the vast majority of people are “stupid” in his opinion?
Last I checked, you literally need to believe this (and Collin proved me correct) in order to believe that our democracy is subject to corporate control.
If people are generally thoughtful individuals, perfectly capable of electing their own governments (as I believe), then we have nothing to fear from corporate speech: people will be able to see through it for what it really is.
If, on the other hand, you believe that people are generally, to borrow Collin’s word, “chimps” then we should probably fear corporate speech because people are generally too stupid to be trusted to make their own decisions.
So, which camp do you fall in Julie?
Except no one with any intelligence actually believes that people are generally thoughtful individuals perfectly capable of electing their own governments. That’s why political ads work. That’s why half of all republicans think Obama is a Muslim. That’s why 30% of republicans think he wasn’t born in the United States. I could go on about how little the vast majority of people know and how easily manipulated those simpletons are. Do you know how easy it is to manipulate people? It’s not even remotely difficult. It’s very depressing.
Yes, Collin, I read your rant, and I am perfectly clear on your point of view.
I disagree.
Several years ago, I used to be like you. Sure, you may be more intelligent, my IQ is merely 143 (Wechsler scale) compared to your self-proclaimed 170s. Nonetheless, that puts me in the 99th percentile. When I first learned this it seemed to validate my old worldview that everyone else was foolish and I always knew better.
And I was wrong.
Collin, if people were actually that easy to manipulate, and if people like yourself always knew best, then there would literally be no problems.
Just do the logic: people are easy to manipulate, ergo it should be easy for you to convince them that you are correct. You know best, so your solutions should always work out.
Except that it’s not that simple.
It’s not that simple because people are more capable than you give them credit for. It’s not that simple because your time is limited and so you cannot possibly have all the relevant information, especially when it comes to very large problems.
However, instead of acknowledging that those who disagree with you might have information that you don’t have, and might be fully capable of reaching logical conclusions, you would rather dismiss them as “stupid.”
I do not know you personally, but given your claims to, and I’m quoting here, “physically pains” because of the “stupidity” of others, I’ll go out on a limb and claim that this method of dealing with the world is probably not working out for you. It’s likely that you just haven’t realized it yet.
I am telling you, as someone who once thought the way you do, that your problems, your “physical pains” are a product of your own worldview rather than the world you actually live in. I hope, for your sake, that you will realize this soon.
Congratulations. You’re intelligent. You may doubt me, but I am not bothered by that. I took 2 IQ tests at the age of 7 because the first was limited in its ability to accurately measure ultra high IQs.
There could be a world with very few problems IF we allowed the intelligent to rule. This is something we do not do, and most incredibly intelligent people try very hard to avoid being manipulative. One of the big problems with knowing better than others is the fact that people don’t like being told they don’t know what they’re talking about. It is far easier to covertly manipulate someone into doing something you want than it is to overtly change their mind.
People are not more capable than I give them credit for. I know this because I give people too much credit, and they routinely impress me with their ineptness.
I understand perfectly well that I do not have all the answers or know everthing; however, I also understand perfectly well that when I do know something, I am right. If someone disagrees with a factual statement I make, it isn’t because they have more information; they are wrong.
It is a very lonely place at the top. Incredible brilliance is an incredible burden. There is nothing more depressing than watching the world careen toward disaster and being drowned out by the unintelligible howling of the masses.
Look, I don’t know where you keep getting this from, but I’m trying to help you, not “bother” you.
You need to take this statement apart and really look at the kind of worldview you have built for yourself:
“I understand perfectly well that I do not have all the answers or know everthing; however, I also understand perfectly well that when I do know something, I am right. If someone disagrees with a factual statement I make, it isn’t because they have more information; they are wrong.”
If you do not know everything, then inherently you may be wrong about the things you do “know” because your knowledge is based on an incomplete set of facts.
By dismissing everyone who disagrees with you out of hand, you are denying yourself access additional information and the chance to develop a better understanding of the world around you.
I would also politely suggest that these two statements are inherently at odds:
“People are not more capable than I give them credit for. I know this because I give people too much credit, and they routinely impress me with their ineptness.”
The first sentence implies that the second is, at best, disingenuous.
All together you seem to have a very negative and closed worldview. You are unwilling to be critical of yourself, and you are more likely to dismiss contrary views than to hear them out. This will ultimately make you miserable, and frankly, from your statements it sounds like it already has.
Finally, this really looks like a rationalization:
“One of the big problems with knowing better than others is the fact that people don’t like being told they don’t know what they’re talking about. It is far easier to covertly manipulate someone into doing something you want than it is to overtly change their mind.”
You’re painting yourself into a corner: “If they don’t agree with me, it’s because they’re wrong, and I’ll never change their minds because they’re too stupid too listen,” That really sounds like someone making excuses, and not someone who really does “know better.”
Perhaps not stupid, but most people are self-centered and short-sighted (pace Jasper Fforde), which amounts to the same thing.
Is it even possible to know everything about something?
Even if it were, I think that’s a bit of a straw man argument. It’s not necessarily a case of knowing “everything” about something, but rather a case of grasping the fundamentals, the basics.
In other words someone may not know every aspect of something but can still understand it’s essential nature as opposed to someone who is lost in the details and misses the point.
Western academic intellectuals are notorious for this kind of hair-splitting.
True, but that’s not an essential feature of capitalism, and more than murdering your citizens in death camps is a defining feature of command economies.
No, the US is a REPUBLIC, not a democracy.
In a democracy, the people would make the laws.
In a republic, representatives of the people make the laws.
In fact, true democracy doesn’t mean majority rule. It means functioning through consensus.
Democracy means “popular rule.” While different definitions may exist for the purposes of comparing other political systems in general use “democracy” refers to any government which derives it’s mandate from the people.
No, capitalism is just the economic arm of patriarchy; it’s how patriarchy maintains its hegemony via control of resources.
Exploitation is the foundation of capitalism: It cannot exist without exploitation of resources, labour and customers/consumers/markets.
Capitalism MUST continue to grow to be successful. The only thing in nature that continues to grow is cancer.
“No, capitalism is just the economic arm of patriarchy; it’s how patriarchy maintains its hegemony via control of resources.”
Really, so if a feminist commune does a fundraising drive or creates a system of tokens to represent work then they’re really partriarchs?
“Exploitation is the foundation of capitalism: It cannot exist without exploitation of resources, labour and customers/consumers/markets.”
Ok, that’s true, but only if your definition of “exploitating” is “doing work with.”
“Capitalism MUST continue to grow to be successful. The only thing in nature that continues to grow is cancer,” and just about every biological organism on earth.
Capitalism, like cancer, continues to grow until it destroys its host.
Nothing else in nature does this. Everything else in nature has a natural lifespan that includes death and regeneration.
Which I’m pretty sure is self-evident except to those who choose NOT to understand.
Ditto patriarchy, which the commenters who refer to that phrase clearly (and almost certainly wilfully) fail to understand.
Its understandable now that you are fully explaining it. Before you just said it continues to grow now you are adding in “until it destroys the host”.
No, capitalism is just the economic arm of patriarchy; it’s how patriarchy maintains its hegemony via control of resources.
So when feminists perform efforts to raise money for certain causes does that mean they “using the master’s tools”?
Capitalism MUST continue to grow to be successful. The only thing in nature that continues to grow is cancer.
Most biological creatures grow. Now if you want to say that capitalism is like cancer in the sense that in order to grow it does so at the express expense of others (like a cancer grows at the expense of the person who has cancer) then you have a point. But growth in and of itself is not an inherently cancerous process.
“when feminists perform efforts to raise money for certain causes”
Neither capitalism nor patriarchy. A red herring, in fact.
How is that a red herring? I asked a simple question.
It’s a fair point. Like any other force or system, capitalism is okay in moderation. The unregulated, uncontrolled, speculation-happy version we’ve been building up since the Reagan years is emphatically NOT working. That doesn’t mean capitalism is worthless; just that it needs to be implemented sensibly, with oversight and safeguards to rein it in where needed to serve the public interest.
I love that you and I agree on so much, and also on so little.
It makes me laugh a little. I figure we’d have a lot to talk about.
I know, right! I’m always unsure if I’ll end up vehemently disagreeing with you, Copyleft, or nodding along to your comment.
This time I agree.
I’d agree 100% with that.
It should stand to reason:
Human beings need regulations (laws) to prevent them from hurting each other.
Capitalism is run by human beings.
Capitalism needs to be regulated.
Bill Deresiewicz seems to be making a very fundamental error. He is assuming that if option A is bad, then option B must automatically be better. This is far from the truth.
Sure, there are dozens of needs that capitalism doesn’t meet, but the assumption that government intervention will fix that directly contradicts hundreds of years of governments trying to intervene in the marketplace and failing with different levels of spectacularity, from Solyndra to the “Full Employment Act” of 1978 (which, I will give you a hint; did not create full employment).
The relevant question is not “Should this be regulated?” the question is “Will regulation produce a better outcome?” Time and again, the answer to the second question is a definitive no.
Furthermore, I will point out that “other values and forces” is usually code for “I want to make other people pay for the things I want.” Example: don’t want the Canadian Tar Sands to be drilled? You are free to find like minded individuals, pool your money, and buy the land rights.
But that sounds like a lot of work, and you probably don’t want to spend your own money, so what can you do? You can campaign for regulations to prevent the importation of tar sand oil, raising gasoline prices and PRESTO you have made everyone else pay for your desire to see the tar sands remain untouched.
The problem here, Mike, is you are simply incorrect. There are many problems that government intervention can correct or severely curtail. Your kind operates under the assumption that big corporations: Good. Government: Bad. Your worldview is far too simplistic. Government intervention in the marketplace has proven to be quite successful in many many MANY instances. Far more than it has failed.
Let’s start with your right-wing talking point on Solyndra. First, this was a government loan guarantee to a private corporation. The government made an investment and took a risk on a fledgling company. As any investor will tell you, you don’t have a 100% success rate on investments.
Time and again regulation has proven to be greatly beneficial. Corporations care about profits and nothing else. Regulations are designed to temper the relentless pursuit of profit and forcing corporations to take into account the well being of their customers and society as a whole. I think we can agree that corporations should not be allowed to sell tainted meat, or put sawdust in their cornflakes, or sell spoiled milk, or cabbage infected with salmonella, right? These are all regulations. You can argue that “the market” would punish these bad actors, but it has been proven time and time again that this does not work. Child labor laws, minimum wage, glass steagall, and on and on are all regulations that worked.
Corporations should pay for the costs and damages that they do, but they don’t unless they are forced to. Why should I pay for the pollution of a coal fired power plant that is making my water undrinkable? I shouldn’t. THEY caused the problem and THEY are responsible for paying for it. Of course, they won’t pay unless they are forced to by government. Getting off the hook for paying for things increases profit, and the only reason a company exists is to maximize profit. I’ll be fine with the tar sands being mined and burned, as long as the companies are required by law to pay for the damage to the global climate that it causes, damage to the environment, public health damages, etc. Corporations are perpetually avoiding paying the true costs of their activities.
You are also showing your ignorance about markets when you talk about the prevention of oil sands raising gas prices. Gas prices are based on the price per barrel for oil, which is a free and open global market. The negligible increase in global production a decade from now that oil sands would generate would have absolutely zero impact on the price of a barrel of oil. The benefits of mining the tar sands goes to the pockets of big oil, and the limited number of people who would be employed by the industry. The massive negative consequences would be borne by everyone else. I don’t want to pay the price for ExxonMobil to make billions more money. They should not be allowed to force me to pay for their profit.
Agreed Collin. Such a mistake when corporations were given “personhood.”
Collin,
Issue 1, I’m not a Republican, but thanks for playing. You repeated characterizations such as “right wing talking points” are all incorrect.
Issue 2, I never said ALL regulation is ALWAYS inefficient, but thank you for creating a straw man. If you actually read my post you would note that I said:
“The relevant question is not “Should this be regulated?” the question is “Will regulation produce a better outcome?” ”
Obviously, in any case where the answer to the second question is “yes” then there is a case for regulation. Please actually read the things I write before telling me I am “simply incorrect.”
Issue 3, it has actually been proven time and again that the market DOES punish bad actors. To date there is actually no law against “pink slime” yet many stores and restaurants have pulled pink slime products from their shelves. They did this as a result of investigative journalism, which was carried out for for-profit new organizations. This is literally market self-policing and we see it in action all the time. It is incorrect to claim that this never happens.
Issue 4, I would happily agree that everyone should be responsible for paying for the problems they cause. As soon as you join me in blaming the people who took out loans that they could never repay, in order to buy homes they could never afford, for causing the financial crisis, I will happily believe you also think everyone should be responsible for their actions. In the meantime I will reserve my opinion about your consistency on this issue.
Issue 5, the price we pay for gas is not simply based on the price of oil per barrel. Two major concerns are the price of North Sea Crude, which is extremely high, and the lack of pipeline development allowing additional distribution of crude oil in the interior. The East Coast depends upon North Sea oil for a great deal of its gasoline (the West Coast crude prices are lower, and creating a market for re-export of gasoline from refineries), which means that crude prices from that region hold sway over gasoline prices, even when the global prices is very different. In February of this year, a sharp spike in North Sea oil prices led directly to a spike in gasoline prices in the US, even though the global crude price remained unchanged.
One solution to this would be the development of the tar sands and subsequent expansion of oil pipelines: this would create an alternative distribution network for lower-cost crude. However, environmentalists have blocked this repeatedly, mostly because they are unconcerned with forcing other people to pay for their goals.
Issue 6, your Solyndra response is non-sensical. Even if it was a “risk” then there still needs to be accountability. By all measures Solyndra never had a credible plan for producing solar panels at an efficient price. This made it a very bad risk. We need to hold people who take very bad risks accountable for doing that (at least, this seems to be your claim with respect to corporations, which you then suddenly ignore when it’s the government…).
Yes, you are a right winger. Just because you’re a “libertarian” doesn’t mean you’re not a right winger with essentially zero understanding of how the world works. Those people are not the ones who caused the financial crisis. You’re blaming the wrong people. There is such a thing as predatory lending. Additionally, only a small portion of the overall collapse was caused by loans themselves. The vast majority of the problem came from the fact that these loans were bet on over and over and over taking a few hundred billion dollar problem and turning it into a 10 trillion dollar problem. The borrowers had NOTHING to do with that. AT ALL.
The price we pay for gas is, almost entirely, based on the price of a barrel of oil. 95% of the cost of gasoline is the cost of a barrel of crude. The East coast does not depend on any one specific source of oil. Oil is a global market and you can just as easily buy oil from Saudi Arabia as you can from anywhere else. It matters not at all where the oil comes out of the ground.
Your opinion of the solyndra risk is based on what? The drudge report? The government doesn’t just hand out money to alternative energy companies willy nilly (unlike how it does military contracts) and Solyndra made it through numerous rounds of due diligence both by the Bush administration and the Obama administration.
Your ignorance physically pains me.
Collin,
I have never used any insults, yet you continue to use terms like “ignorance” when referring to me. This is not civil.
East Coast gas prices depend on the North Sea, this is my source:
http://articles.cnn.com/2012-02-12/travel/travel_gas-prices_1_lundberg-survey-price-of-regular-gasoline-regular-gas-cost?_s=PM:TRAVEL
Note that during this time period other crude prices were flat: it was just the North Sea oil that led to a gas price spike.
There are additional problems with pipeline infrastructure, and crude prices account for only 80% of gas prices, source:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/04/22/MN261O78QA.DTL&ao=2
Solyndra never had a credible cost-per-watt plan:
http://www.forbes.com/sites/timworstall/2011/09/17/solyndra-yes-it-was-possible-to-see-this-failure-coming/
We’ll have to agree to disagree on “predatory lending.” Personally I believe that individual people are quite remarkable, and able to make great judgments about their own situations. Sometimes they make mistakes, but for the most part, they know what is good for themselves.
“Predatory Lending” suggests that people aren’t capable of making the best choices for themselves, and we need to a paternalistic system to decide for them. I’m never going to agree with paternalism.
Finally, you’d probably be surprised to find out that I spend a great deal of time working for my law school’s criminal justice clinic trying to get the charges and sentences of society’s most vulnerable dropped on a regular basis. I do this because Libertarianism disagrees with the current state of criminal justice, and it’s something I believe in. But according to you I must be a “right winger” who spends all of his time pushing for the death penalty. Please stop putting people in boxes.
I’m sorry if you find the truth insulting, but I simply state the truth. The only thing that would be obligating east coast refineries to purchase more expensive north sea brent would be long term contracts between producers and refiners. I could go into great depth about the oil market, the differences in the different types of oil (oil is made up of thousands of different compounds and is different depending on where it is extracted) and the like, but the fact remains that we’re talking about a commodity that is truly global. I also find it entertaining that the very end of the second article you cite makes the exact point I have been making.
And I’m going to be honest, basing your entire basis for Solyndra on the blog post of an admitted right-wing hack strikes me as pretty weak tea.
People AREN’T able to make the best choice for themselves. Most people are stupid. People are especially bad at making good decisions when the counterparty has a vested interest in making sure that the other party makes a bad decision and they present said decision maker with poor or completely inaccurate information. Free market fundamentalism — something you seem to subscribe to — is the single greatest detriment facing humanity. It is the source of the vast majority of the world’s largest issues. Starvation? Global warming? Militarization? The driving factors for all of these problems are corporations and free markets.
Congratulations, would you like a cookie? Just because you do a tiny bit of good does not make up for the fact that you subscribe to an ideology completely at odds with reality that will, if allowed to exist, bring humanity to the brink of extinction.
Collin,
If you do nothing else today, this week, or ever, please, I am begging you, rethink this statement:
“People AREN’T able to make the best choice for themselves. Most people are stupid.”
I can assure you, your life will improve dramatically, and in every area, once you realize that this is a terrible outlook to have.
This is about more than politics, this is literally about being a Good Man. A Good Man does not believe that “most people are stupid.”
The problem is that I operate based on the world that exists, not on the world that I wish exists. The simple fact is that most people are stupid. Most people shouldn’t be allowed to drive motor vehicles or vote. Most people shouldn’t be allowed to own weapons. Most people can barely function on an intellectual level. I know all too acutely how stupid the vast majority of human beings are. As someone with an IQ in the 170′s, I am forced to suffer the collective ignorance of humanity.
I am perpetually shocked at how stupid most people are. I am often left wondering if these people need to concentrate in order to breathe because I am so shocked at how truly, painfully unintelligent they are.
It physically pains me to see the world being systematically ruined by chimps. The most tragic fact of all is that intelligence is not a requirement for being a prominent decision maker. I wouldn’t trust most politicians to pump my gas, but they are down in Washington making decisions. There should be minimum IQ requirements for voting (130) and holding public office (150).
Do you want to know what’s truly terrible? Watching people destroy the world because they’re too stupid to avoid it.
Insisting someone is a “right winger” as if you know more about the person than they do themselves is ridiculous, it’s an ad-hominem attack and it is a glaring weakness in your argument. I understand how galling human stupidity is, I concede that point, but your comment about “a right winger with essentially zero understanding of how the world works” is ludicrously presumptious.
It comes off as arrogant, condescending and begs the question regarding the existence of left wingers who have zero understanding of how the world works, believe me they exist, it’s not a trait exclusive to conservatives. Hopefully you’ll level the same accusation at me, I’m looking forward to it.
If it quacks like a duck…
As I always say, “it isn’t arrogance; it is the truth.”
” the question is “Will regulation produce a better outcome?” Time and again, the answer to the second question is a definitive no.”
Yes, Because the highly regulated capitalism of Northern Europe and Australia have been such a spectacular failure, only producing the nations with the best standards of living consistently for the last 30 years.
The US doesn’t even rank in the top 10.
Ah yes, the old “but look at…”
Show me another country with a comparable population size and a greater standard of living, and I’ll be happy to listen.
The great parlor trick of the areas you speak of is exporting their poverty elsewhere. Northern Europe’s economies are extremely integrated with Russia and Eastern Europe, but conveniently the borders prevent the low living standards of places like Romania from being included.
A similar case can be made for the relationship between Australia and South East Asia.
If the US had the luxury of claiming that places like Mississippi and Alabama were a different country, we would also see a comparable rise in living standards.
A better comparison is looking at the EU as a whole when compaing to the US, and then suddenly statistics like life expectancy fall into line with each other, not to mention a far more robust and rapid economic recovery in the US…
The US has by FAR a greater GDI than all of the EU, yet yes, if you looked at the entire EU compared to the US, Europe still has a much higher living standard.
But please show me evidence that population and economic equality are correlative. They’re not.
And, uh, as I pointed out, the Northern European nations have had better standards of living since LONG before the Cold War ended. As for economic integration with Russia (which is part of Eastern Europe– and BTW, Romania is CENTRAL Europe), Northern Europe is certainly not getting RICH off those much poorer countries.
As an Australian resident for 10 years, I can assure you that neither does their economic powerhouse come from their relations with SE Asia.
All of the nations/societies that I mention have intervene in capitalism in 3 ways the US does not: They all have a liveable minimum wage, they all tax corporations and the rich at high rates (and use the monies to provide strong infrastructure, good education and a variety of social welfare benefits that aren’t available in the USA), and they all have national health care, which means not-for-profit health care.
That means that almost everyone has access to a decent standard of living– and the lack of those 3 things are the reason that many US citizens do not.
I don’t know where you get the idea that the US has anything LIKE a robust and rapid economic recovery– except for the 1%, who were never in any danger to begin with.
I agree with the “capitalism in moderation” sentiment expressed here so far.
I notice, however, that “greed” is a moving target, always something someone else suffers from, as is the horrible thing called “always wanting more.” When other people pursue economic interests that we don’t have sympathy for, that is generally “greed” showing its ugly face. When they pursue economic interests that we also share, then that is simply “seeking financial security” or “being prepared for the future” or “saving for a rainy day.”
Technically, any time you invest with the hope that it will be worth more in the future, that is greed in the form of speculation. If you go to school to earn a degree in order to get a higher paying job, that is a kind of greed. If you try to make a little money on the side to send your kids to a private school instead of a public school, then you are one of those greedy bastards hurting the public school system. If you have ever sold something online for more than what you paid for it, you are part of the greed hurting this country. (Unless the item is a house, in which case it’s never greedy, and it’s only business if the value goes up, but if it goes down, then we say homes are never really about business anyway.)
I have problems with capitalism, but sometimes I think in some cases we need MORE capitalism, not less, or at least let the chips fall where they may more than we do already. If you drove your business into the ground, tough sh*t, that’s capitalism, baby, and capitalism means you absorb your own risk. Real capitalism means NO ONE is “too big to fail.” If you bought a house you never could have afforded and it’s now in foreclosure, that’s capitalism, too. You invest and it goes up, you earn money, you invest and it goes down you lose money.
Capitalism means that when housing prices go down, that’s GOOD for people who couldn’t afford them before but who now can. Getting the government to bail you out from your foreclosure is a very selfish, greedy act that hurts the many other people.
Greed is the pursuit of money with a complete disregard for other factors. Pursuing money is fine, I am someone who is pursuing great wealth. My greatest goal in life is to be the wealthiest individual to have ever graced the face of the Earth. I don’t view myself as greedy, however, because I am not willing to forsake everything else for the sake of money. Someone who is greedy doesn’t care what they do to others to make the money as long as they’re making it. I know people who would beat someone else over the head until they get detached retinas for $50. That’s greed. Wanting to make money doing something that is a net benefit is not greed.
I see your point. There is some distinction between accumulation for its own sake and accumulation for some sort of higher purpose.
But, I think there are lots of areas in which this distinction breaks down, or at least areas where there is profound disagreement over whether what I’m doing is greedy or not. (Generally “greed” is what people do who are not like me. It’s like how in America it’s always the other person who has an agenda or an accent, but people who talk and act like me don’t have those things.) I find that much of the public debate about the power of greed seems to pretend that greed is something totally obvious and always clearly different from other economic motives, when it really isn’t. There is greed that is generally acceptable to 95% of the population and other forms that scandalize 95% of the population. Ultimately the question is what forms are acceptable and what forms are not. It’s a very subjective question, not a quantitative one.
There are clearly social trade-offs that people make in the pursuit of wealth. However, not every increase in someone’s wealth means that someone else is losing wealth. It is not a zero-sum system. If I get a raise this year, that doesn’t mean I am forcing someone else to take a pay cut. (Maybe so, maybe not.)
As for net benefits, ultimately society would have to make a judgment call about how broad those need to be before we say they are not greed anymore. Very few net benefits, probably no net benefits, would ever benefit everyone, certainly not everyone equally. So, how many people have to benefit before it stops being greed? I think this is a central question of American economic politics today. (For example, if a policy benefits home owners at the expense of renters, then is that greedy? It helps tens of millions of Americans, so there’s clearly net benefit.)
As for having a complete disregard for other factors, I wonder how common that really is. Even people deeply obsessed with making more money have other interests. They still eat and sleep and have sex. They may even dream about retiring early and traveling the world. If the standard definition of greed requires total disregard, then very very few people are really all that greedy.
If it’s greedy to export American jobs overseas, and so we need to keep those jobs here, then isn’t it also greedy to look out for your own country’s workers first? Sometimes greed is actually celebrated as nationalism or patriotism.
Ladies and Gents, to quote from my original response:
“Our problem isn’t capitalism or the supposed psychopaths on Wall Street, it’s our collective disease of more. It’s our unwillingness to see poverty and education and imprisonment as a collective problem. It’s our focus on the next thing we want to buy rather than the person we want to help. Sure tax and regulatory policy are important. But none of it will mean shit unless we all wake up from this belief that more is better.”
I am not a proponent of big government or big corporations as a solution to much. But I am a proponent of trying to see the forest for the trees when it comes to where we are.
“The concentration of wealth in this country and this world is extremely dangerous to all, including the wealthy. The amount of national debt across the developed world is equally destabilizing. In the United States, we are more focused on locking people up than educating them. And our massive national debt at least in part can be traced to an obsession with national security. If none of those things kill us, our continued total dependence on fossil fuel and the accelerating use of our environment will.
I don’t think unbridled capitalism, or a handful of rich guys, should be saddled with that long list of terribles. The reality is that we are all equally responsible. This is our country and our planet.”
Well, the reality is that we are not all equally responsible. I’d say Lee Raymond is infinitely more responsible for global warming and the lack of action on addressing the issue than I am. I’d say that Jamie Dimon is infinitely more responsible for the housing crisis than I am. Etc. I don’t think it is fair to let the bad actors get off with the false statement that everyone is equally responsible. Does everyone bear some responsibility? Probably. Does everyone bear equal responsibility? Not even close.
Who is talking about not punishing bad actors? I wrote my response to a piece in the NYT which equated capitalists, such as myself, to psychopaths. I think capitalism can be a force for good not just evil. I also think the issue isn’t purely economical but about our collective ability, or inability, to show empathy for those in prison, in poverty, and who aren’t getting a decent education. Pointing figures at rich guys doesn’t solve those problems.
To be fair, there are many capitalists that ARE sociopaths. Also, I think the bigger problem is not that most directors are sociopaths, but corporations themselves ARE sociopaths. The problem is that corporations face no punishment. A corporation does not fear the repercussions of its actions. Because of the limited liability nature of corporations and the refusal by government to prosecute directors for criminal conduct taken under their watch, we have a situation where corporations operate, essentially, as complete sociopaths. I think the biggest problem is limited liability and a refusal to prosecute. The entire C-suite at BP should be in prison. Thousands of executives at banks, mortgage companies, hedge funds, and the like should be in prison. Goldman Sachs should not be forced to pay a paltry fine for committing fraud; the people overseeing the deal all the way up the chain should be in federal prison. They aren’t. There are no consequences for corporate misbehavior and that is the biggest problem.
I’m a capitalist too. I am with you 100% that capitalism can be a massive force for good. With that said, we have a system in place that encourages evil and punishes good. Pointing fingers at rich guys does not solve any problems, no, but demanding that they stop using their wealth to buy our government, purchase favorable legislation, and have government grow their fortunes at the expense of everyone else WILL help solve those and many other problems.
To be fair…”I’ve had enough exposure to tenured faculty members, surgeons, high level musicians, psychologists, CIA agents, and librarians to know that each of these groups has a far higher propensity towards acute mental illness–even psychopathology–than successful capitalists. Hell, my college economics professor–a guy named Mr. Kilby–used to climb out the window mid-lecture to go feed his dog Bert. Thank goodness it was a first floor window.”
I am with you that bad actors should go away and for a long time. Some have. More should. I also agree that the way capitalism is being practiced, with notable exceptions, is wrong. There is a way to do good and make money at the same time, not rape and pillage.
My point is that the societal ills of educations, imprisonment and poverty are ones that aren’t just the fault of corporations or those among leadership in those organizations that are rotten. The rules of the game are wrong and our priorities as a national are all screwed up. That’s not a hedge fund manager’s fault, whether he is a good guy or an asshole. That is the country as a whole fighting wars we had no right fighting, ignoring investment in our human resources, and throwing away the key on the 2 million men (half black) in prison.
BP, Goldman and all the rest should get harsher consequences. But that won’t solve the bigger issues that face us. And, again, I see the way to begin that process is to stop seeing those in need as bad but rather deserving of our empathy and help.
We seem to be in general agreement here. I agree completely that there is a way to do good and make money at the same time. In fact, it is the only way that I am willing to make money. It is, unfortunately, the hard way to make money. Practicing ethical capitalism puts you at a massive disadvantage. I would be a very wealthy man already had I taken opportunities when younger to pursue money above all else. The only way I am willing to make money is by doing something that is a net benefit for society as a whole. From medical devices designed with patient comfort and utility in mind to numerous green-tech creations, I am a steadfast believer in altruistic capitalism.
The problem is that as a culture this is not what we encourage people to do. The system doesn’t encourage people to be like you and I. It encourages people to go the opposite direction. I feel like we simply have a different view in how things are best accomplished. You seem to think that bottom-up is the way to make big changes, and I am a believer that the best way to make changes is top-down. Never doubt that a small group of thoughtful, committed people can change the world. Indeed, it is the only thing that ever has.
I thought both your blog response and Bill Deresiewicz’s Op-Ed piece in the Times complemented each other. I went to business school, too, at the University of New Hampshire probably in the TOP 1,000 of U.S. Business Schools/
I thought the most useful class was corporate governance. The professor was able to demonstrate the changes in capitalism in the U.S. by showing three movies viewed in this order. Tucker, a man and his Machine, Executive Suite, and Barbarians at the Gate. You can watch the evolution or perhaps the devolution of American Capitalism over the course of four decades.
I’ve seen dozens of Senior Executives of public companies exhibit the sociopathic behavior described in the TImes piece. I’ve also seen two Chief Executives, Leon Gorman of L.L, Bean, and Aaron Feuerstein of Malden Mills treat their employees with compassion and dignity.
While I have a MBA, I’m not wealthy from the perspective of a bank account. But I have achieved wealth in a different way, through my family, and my professional values of treating others with courtesy, dignity and respect.
I would rather profit from adding value, that is providing a product or service that a customer is willing to pay for than accumulate wealth by charging fees for services that add no value. I think this is where many people feel betrayed by capitalism. Wealth is created with no value add.
I have no beef with Bob Kraft making lots of money as owner of the New England Patriots. He provides me value through the entertainment and enjoyment I get watching his team on Sundays from August to February.
Do I hold J. Harold Chandler in the same high regard? No. I watched him take a company from a share price of $60 per share to a share price of $5.99 and get rewarded with a 20 million dollar severance package. This was at a company where rank and file employees were compensated by “pay for performance.”
Well said Andy and agree.
Collin, you have hit on one of the real issues.
You have argued that the corporation is a sociopath. I agree in terms of the impact that arises from what we call corporations, but my argument is that the corporation is an absolute myth. It does not exist. Some filings and registrations exist, which when in place normally cause the actual people in our world to agree that a corporation exists, but clearly they do not. If a virus killed every living person what would the corporations do? Clearly the answer is nothing because they only exist as an agreement among real people.
As corporations are getting larger and reaching the size of countries people walk through the door as a ‘Good Man’ or ‘Good Woman’ and become an employee who sees themselves as something less than the powerful being that they are. They subscribe to the myth that there is a corporation and at work their needs and those of the other people on the planet are played down relative to the need of the corporation to continue to create profit and growth in value.
Tom is arguing that bottom up people can create the right kind of capitalism. I agree with Tom, in the right circumstances they can. However I don’t believe Tom has appropriately acknowledged the drivers that dominate the system.
The capitalist system is based on capital. The capital demands a return. While some funds play at social responsibility and while there are a very few ethical investment houses, 99.999% of the world’s capital is moved around based on IRR and NPV. When the short term IRR and NPV is not there the funds sack the board or the board sacks the CEO or the shares get sold till these things happen and finally the mythical company employs people who are prepared to be a ‘toe-cutters’ and get the business back ‘on track’ as they define it with short term growth in profits.
I like Tom believe that organisations can do good in the world and make sometimes extraordinary profits with strategies that are in integrity with the world. I’ve worked in and with two corporations that operated at gold standard in terms of profit and were gold standard corporations in operating in integrity with the world.
Sometimes strategies in integrity can provide outstanding returns quickly, but sometimes short term pain is required to move an organisation out of an old unethical business (like fossil fuels) into new sustainable businesses. These latter changes require ethical capital that is willing to be patient.
Bottom up it is the responsibility of every single one of us not to believe the myth of the corporation, there is only the people involved and each of them has a responsibility to every stakeholder. It is our responsibility to be ready to resign, to stand up to the ‘toe-cutters’ when they want to cut the oil rig maintenance budget another step too far. The reality is that the fears that stop us from taking these stands are myths too. Our life is but a chapter in a picture bigger than we can imagine. From that bigger picture perspective nothing is more important than living our life in integrity.
I am a believer in something beyond capitalism and I believe that the Venus Project ( http://www.thevenusproject.com/ ) offers great value. Without money 90% of the world’s activity that is created through dysfunction goes away. We don’t need corporate lawyers because there is no money to argue over, we don’t need most criminal lawyers because most criminal activity is based in scarcity and money, we don’t need accountants, bankers, and the list goes on. Products can be designed to last a lifetime because we don’t need two year product cycles to ensure continuing sales and profit.
Until the ultimate economic collapse comes that is a mathematical certainty with fractional reserve lending and the perpetual growth of the money supply through interest, we are left with capitalism. I believe there is a way of operating within capitalism that can work. It is to make decisions based on value creation (net of harm) and to design strategy based on creating value in the world (as Colin has spoken of) and to design a business model that provides a fair return for the value created. If more people will look the issue of ‘net of harm’ in the eye and walk away from making profit that does harm then capitalism will produce better results than it does today.
That is where the big picture comes in, with education and reporting and governance that looks harm in the eye and that will not act in dysfunctional ways to justify continued profit and unethical returns to capital
The problem lies within -unregulated- capitalism. Perhaps my analysis is wrong, but the way I see it is that unregulated capitalism is like taking out the rules in football, because they were preventing teams from scoring as much as they could. So you take out the rules, and players still score the same, but there isn’t any limit to how many players you have on the field, or how you get the ball to the end zone. So a bigger, more wealthy team can certainly outbuy their opponents and put as many men on the field as they want. Sometimes, they can merge with another team and kill two birds with one stone – take out the competition, and make their team even bigger. Some teams can still play by the old rules – attempt to play fairly – but they certainly won’t “win”, especially against a powerhouse team of the Giant Packer Steel Patriots. But above all, teams can buy off the referees, so there’s no one there making sure people are playing ethically. The game doesn’t correct itself. Fans of the game can choose to not support teams they don’t agree with. And they can certainly point out some players who were clearly in the wrong, and they might leave their team due to public pressure. But there will always be someone who steps in their place. It’s unrealistic to think that teams are going to continue to play ethically when teams will do anything to win even with rules in place. The Saints bounty scandal is a good example of this. But the rules are there to at least keep everybody accountable and the game fair. There can be such thing as too many rules, but take away most or all the rules and you get a game where you get rewarded to playing unethically.