An Honest Talk about Capitalism as Intended

I have been recently been called a Communist.

 

It happened because I stood up for non-toxic worker environments and a system where people could easily leave employers who are damaging the mental and physical health of employees. It seems that any defense of the working class puts you at risk of being compared to Vladimir Lenin and Karl Marx. This comes often from a misunderstanding they picked up from Animal Farm in 7th grade. (FYI: Animal Farm was neither Pro-Communist or Anti-Communist, it was anti-corruption and anti-authoritarian.)

Let me start by saying I am not a Communist. I have a wide array of philosophies that do not really fit into any single boxes. This is what happens when you read a lot and spend a lot of time second guessing yourself. I have Capitalist, Socialist, Anarchist and Libertarian ideas all in varying measures. The reason for my scattered ideology is this quote which I have come to love.

Every man alone is sincere. At the entrance of a second person, hypocrisy begins.

-Ralph Waldo Emerson

 

When you use a quote like this as a “north star”, you spend a lot of time imagining a second person tearing apart your ideas like a rabid and malnourished coyote. You seek the flaws in your own understanding and re-enforce them accordingly. You actively seek your own hypocrisy before someone else can un-earth it. You straw-man your own ideas to see how they will be framed by others before speaking them out loud.

So simply put there is no singular ideal philosophy that I ascribe to. All ideas and ideals are subject to re-evaluation over a long car ride or a night of insomnia. To use a single book or idea and devote my entire philosophy to it would be like going to a buffet and eating nothing but mashed potatoes. As much as I may like mashed potatoes, there are plenty of other things that may be more nutritious or satisfying.

 

My biggest disappointment in Capitalism has lost its meaning over the years, and a perverted sketch of the original masquerades in its place. It has lost all the meaning and nuance in order for a simplified version that predominantly serves the upper classes. It is not that Capitalism doesn’t work. It does. But the form in which we have it today doesn’t because we ignored a crucial part of Adam Smith’s writings.

 

I am not ANTI-Capitalist. I know it sounds that way. I am PRO-Capitalist as Adam Smith intended. Too few people look into Smith’s work as a whole. They find the “invisible hand of the market” explanation in Wealth of Nations and use that as a an excuse to behave how they want. They see the Hand as a near deity, that will smack them down if they misbehave.

 

You can almost picture the guy, sitting on his yacht with a polo shirt on, saying “well if it is that wrong, the invisible hand of the market will push consumers away.” But that is not how the world works when we have companies that control the level of market share that they do. However when the rich and political classes are so incestuous with one another, penalties are likely never to happen. While there are rumblings about possible anti-trust cases against big tech, there has really not been a major anti-trust case since AT&T in the 1970s. It has been nearly 50 years since the government has stood up in a significant way to monopolies and oligopolies.

 

You see Adam Smith did not see himself as only an economist. His economic model was also his philosophy. The Scot who created the “invisible hand of the market” theory saw Capitalism as a benevolent force that should only be used ethically. Sadly, we have seen the ethics of Capitalism diminish more and more over the decades. You need only look at the wealth gap, Bernie Madoff, Well Fargo, Enron, Golden Parachutes, the American for-profit medical system, Theranos, uneven tax policy, companies using prison labor, and countless other examples.

 

You see like many great writers, Adam Smith did not write only one book. He was pretty prolific as a whole. One of his earlier works was The Theory of Moral Sentiments, which goes extremely in depth about the virtue of sympathy and caring for others over yourself. While he did not say it was a moral responsibility the way other writers had, he did talk about it being in the best interest of all people within a society. Just read this passage and imagine who he would have seen the Jeff Bezos or Elon Musk.

 

The rich only select from the heap what is most precious and agreeable. They consume little more than

the poor, and in spite of their natural selfishness and rapacity, though they mean only their own conveniency,

though the sole end which they propose from the labours of all the thousands whom they employ, be the

gratification of their own vain and insatiable desires, they divide with the poor the produce of all their

improvements. They are led by an invisible hand to make nearly the same distribution of the necessaries of life,

which would have been made, had the earth been divided into equal portions among all its inhabitants,

and thus without intending it, without knowing it, advance the interest of the society, and afford means to

the multiplication of the species.

 

Reading this, it seems Smith is against people growing to a point where they are no longer helping others and mostly serving their own “selfishness and rapacity”.

 

Within this book, he spends an entire chapter discussing the social passions of “generosity, humanity, kindness, compassion, mutual friendship and esteem”. Another particularly long-winded chapter title was “Of the Corruption of our Moral Sentiments, which is occasioned by this disposition to admire the Rich and the Great, and to despise or neglect Persons of poor and mean Condition.”

 

Does this sound like the kind of man who would advocate the dog-eat-dog Capitalism we see today? Or do we see a man who wants all people to be supported and cared for within a society.

 

Just like Communism and Socialism, Capitalism has an inherent flaw. Corruption. All of these systems are built around a Utopian idea of mutual cooperation. However as a species, humans who are focused on fear and scarcity can ruin it. The wrong person coming into power at the right time can destroy everything through their own selfishness and rapacity, and that is what we have seen in so many of the examples I had mentioned before. A small group of greedy people ruin Capitalism for everyone.

 

So no, I am not a Communist, nor am I a Capitalist. They both have significant flaws that fall apart when people ignore their moral obligation to others. And the loudest modern advocates for each are often grossly misinformed on what the ideology was designed for and how.

 

The beauty of Capitalism as Adam Smith intended, is it is supposed to give anyone and everyone a chance to compete, but that is no longer the case. The goliaths have won, and worse the people meant to represent us are giving goliath steroids in the form of massive tax breaks and sweetheart government contracts. It is no longer capitalism. It is cronyism and blatant corruption. The small guy cannot hope to compete anymore.

 

Do I have the right answer? No. I don’t. But it does not come from continuously rewarding the powerful at the expense of employees and consumers.

Hope this helps.

For more random thoughts and mad ramblings about business, go to brokensalespeople.com/ramblings.

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Responses

  1. I think you make a lot of valid points here. Corruption definitely has come into plat a lot more than it should. We, as a society, need to do more to fight back against the corruption. Thanks for sharing such a thought-provoking article.