This is the beauty of capitalism. It works by relying on a person’s self interest, rather than relying on their interest in your welfare. It is one of the most powerful motivating forces out there, and it encourages people to provide goods and services that other people want/need. I sometimes marvel at how sellers and buyers manage to come together without anyone needing to direct their activity.
Of course, Econ 101 includes discussion of externalities and other types of market failure, so it is ill-advised to follow the “moral” idea that capitalism is always better than centrally controlled.
That is the beauty of Capitalism, in making their lives better, they are also making my life better. It would be awfully mean of me to begrudge people who are working hard making my life better, the chance to make their lives better too.
Look at China, a civilization which is thousands of years old, they were mired in poverty and backwardness. They tried communism and tens of millions of people starved to death, then they tried capitalism and hundreds of millions have been lifted out of poverty.
The reason Capitalism is not perfect is that man is imperfect as is everything in this vale of tears, but we should not let minor imperfections blind us to how amazing it actually is.
Adam Smith refuted you nearly 250 years ago, when he explained why the baker and the butcher did their jobs. Hint - it was for selfish reasons, not to make your life better.
I write code not for you or for anyone else, but because I enjoy doing it and primarily because they pay me big bucks to do it.
This is a great irony of the last one hundred and fifty years, Capitalism has crafted a society where everyone works together to achieve the uplift of all, while communism crafted a society where those on the top controlled everything and those on the bottom were used and thrown away like old tissues.
“Our merchants and master manufacturers complain much of the bad effects of high wages in raising the price, and thereby lessening the sale of their goods both at home and abroad. They say nothing concerning the bad effects of high profits. They are silent with regard to the pernicious effects of their own gains. They complain only of those of other people.”
“By necessaries I understand not only the commodities which are indispensably necessary for the support of life, but whatever the customs of the country renders it indecent for creditable people, even the lowest order, to be without. A linen shirt, for example, is, strictly speaking, not a necessary of life. The Greeks and Romans lived, I suppose, very comfortably, though they had no linen. But in the present times, through the greater part of Europe, a creditable day-labourer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty which, it is presumed, nobody can well fall into, without extreme bad conduct. Custom, in the same manner, has rendered leather shoes a necessary of life in England.”
“The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess … It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.”
“We rarely hear, it has been said, of the combinations of masters, though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and everywhere in a sort of tacit, but constant and uniform, combination, not to raise the wages of labour above their actual rate … Masters, too, sometimes enter into particular combinations to sink the wages of labour even below this rate.”
“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
“The violence and injustice of the rulers of mankind is an ancient evil, for which, I am afraid, the nature of human affairs can scarce admit of a remedy. But the mean rapacity, the monopolizing spirit of merchants and manufacturers, who neither are, nor ought to be, the rulers of mankind, though it cannot perhaps be corrected may very easily be prevented from disturbing the tranquility of anybody but themselves.”
This is the first time in history that a communist nation has employed capitalism as a production tool. It’s the best of both worlds from a control point of view. China has a virtual pool of slave labor at it’s disposal. part of it is literal, part of it is excess population which keeps wages down.
We are competing against a government that propagates duplication of intellectual and branding wealth.
Yes indeed. Adam Smith wasn’t nearly as dogmatic a capitalist as some people think.
In our class my daughter starts with about a ten slide introduction to classical economics, and leads off with the quote from him I alluded to. It is that basic. I mentioned it because thinking that economic actors act out of altruism is to economics what geocentrism is to astronomy.
The only economic actors people think acts out of altruism are politicians. The greatness of Capitalism is that it gets people to act altruistically without requiring them to be altruistic. Whereas communism requires a group of men to run the government who are totally altruistic. Yet the nature of politics is that power goes to those who are most ruthless in acquiring power. Thus it is no coincidence that monsters such as Lenin, Stalin, Mao, Pot, Kim, and Castro gain power in communist countries. In business, on the other hand the only way to succeed is to please your customers, so it is impossible to succeed in business without improving the lives of your fellow citizens.
I love capitalism, but let’s not get crazy. In an industry with robust competition, you are correct. However, various market conditions can (and do) occur where companies succeed by squeezing their customers dry, rather than making their customers lives better.
Actually the consensus among scholars is that Lenin never said that. It can’t be found in any of his published works or transcripts of any speech he made. Some people claim he said it in a private conversation but even these accounts are third hand.
The consensus is that Lenin never used the term “useful idiots” either.
Thus the high approval rating for Congress. You’re not serious, are you?
Sometimes. The same motive that makes one butcher give his customers high quality meat might cause another butcher to slip squirrel or dog meat into the ground beef. I’ve been around quality directors of large corporations, and sometimes quality is more of a marketing strategy than an end to itself.
Pure Communism leads to much misery. So does pure capitalism. However Capitalism is more flexible, and is more easily modified by government action to keep the best parts and filter out the worst parts.
Maybe in the very long term. In the short term, one can succeed by fleecing your customers - like Enron, your snake oil salesman, or Burnie Madoff.
Sometimes because that good or service is effectively monopolized. Like Ma Bell before she got trustbusted. Everybody complained about “The Phone Company” in those days. (See The President’s Analyst.)
The problem with this arrangement is that neither the customers or the workers have any power in The Phone Company. Some things are in the nature of public utilities and should be monopolized as such, but in a way that there’s some public control and input.
Probably because it’s the only supermarket in the area, so you’re kind of stuck with their overpriced milk. Or because you don’t actually know that it’s really unnecessary to change the oil in a newish car every 3,000 miles. Or because that guy with “extra” blacktop, who just got done doing your “neighbor’s” driveway is not really giving you a deal, it’s just a pitch to get you to pay too much for low quality service.
Maybe you stick with your current overpriced cellphone provider because you don’t want to change your number and deal with all that hassle just to get a better price. Maybe you want tickets to your favorite band, or any band anywhere, and wish to high heaven that you actually had a choice that didn’t include paying $40 in fees to TicketMaster.