Capitalism and Greed

Pat makes the following interesting point in a comment about Sackcloth and Ashes

Re. wealth - I, like any Christian, oppose greed and exploitation but I strongly believe in the power of the free market to deliver the greatest amount of public welfare. I have found that many Christians, and especially RCs, conflate capitalism with greed - self-interest with selfishness and in doing so resign their faith in Christ for a faith in Socialism.

Here Pat is quite correct that Capitalism is not about greed. The fundamental dynamic of Capitalism is an individual accumulating capital in order to generate more capital in a manner that they choose. The person that provides what people are prepared to buy prospers over those do not. A capitalist has to accumulate capital faster than their competitors lest they be wiped out. So the motivation for capital accumulation is not greed but survival.

Compared to primitive communism (tribal societies), barbarism (communes), slavery, feudalism, Capitalism has advanced humanity both materially, legally, intellectually, and spiritually. This is most manifest in the premier Capitalist nation today: the USA. Nowhere else has yet produced such material wealth (5% of the world's population producing about 30% of the world's GDP); the Bill of Rights and the ongoing debates about its meaning and intent; the number of Nobel Prize winners, scientists, engineers who are or want to become Americans is amazing because that is where the action is; the most intense and diverse debates about religion happens in the USA (just read the blogosphere).

What then are the reasons for this powerhouse? Freedom of the individual is probably a good starting point: no longer can a human being be owned by another human being as in slavery, or be tied to the land and lord as in feudalism. The rule of law is another: the law applies equally to everyone. Compared to earlier societies, these ideas and others were mind blowing. The only political system that accomodate these ideas is democracy.

This brings us to Pat's other point about self-interest not being selfishness. In a society of equals, it is in my self-interest to be fair to everyone else lest they gang up on me. If I cheat my customers, word gets around and I will keep losing more customers until my business is ruined. So it is in my self-interest not to selfish.

Notice that I mentioned equals. Capitalism works best when everybody is roughly equal in power and resources. There has to be choice for Capitalism to work to the betterment of everybody. That is why monopolies have to be suppressed even though monopolies are the natural accumulation of capital. Hence the interference of the State in the running of the economy.

However I think Pat blinds himself to the exploitation in a Capitalist society. One of the exploited groups of people is small business owners. These are the people who work the longest hours and work the hardest. They are also the worst paid for their work. They know this and know that they can make a better living working for someone else. But there is really no subsitute for being your old boss. There is that certain buzz to life as you make your own future. On the other hand, failure can be a terrible thing: loss of home; loss of family; and even loss of life through suicide. If Pat wants to see exploitation, he should see the small business owner as they try to deal with innumerable government rules and regulations, uncaring bank managers, defaulting companies, etc.

Yet the engine of past revolution have been these very people be it the French Revolution of the Capitalists against their feudal overlords, the Russian Revolutions of 1905 and 1917 (February and November), and the American Revolutions of 1770 and 1860. The petite bourgeois will defend their rights and beat the living daylights of anyone who tramples on them.

Here endeth the rant for tonight.