Having set out with this essay to show that capitalism does not work, I found, after delving further into the writings of Adam Smith and Milton Friedman, that indeed it does work. I must admit that there is little doubt that in terms of efficiency in the allocation of resources and in the creation of societal as well as personal wealth, there is no system that can match capitalism. As Adam Smith writes in The Wealth of Nations:
“As every individual, therefore, endeavors as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labors to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.”
Ah yes, “an invisible hand” that works its magic in a manner unrecognized. He further remarks:
“It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.”
However, in the same book, Smith acknowledges that some problems may be found in his system. He states, for example:
“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. It is impossible indeed to prevent such meetings by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.”
He speaks also of the need of the “master” to suppress the wages of his laborers as much as possible, making laborers nothing more than commodities. We are to assume, I suppose, that altruism would carry the day over the generated greed, but is that a realistic assumption?
While Adam Smith may make such admissions of problems with the unfortunate realities that must ensue from his system, I could find nothing in Milton Friedman that would support them. Friedman’s position is clearly stated thus:
“So that the record of history is absolutely crystal clear. That there is no alternative way, so far discovered, of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system.”
AND, he is absolutely correct, IF we are to assume that “improving the lot of the ordinary people” involves nothing more than an accumulation of material wealth. Herein lies the fallacy of the whole system, for it flies in the face of what all the great religions and the sages of history have defined as being necessary for the achievement of an acceptable level of humanity.
I speak of virtue, virtues that are the very hallmark of humanity. Not only does capitalism ignore the virtues, it all but mandates their opposites in sins. Foremost among the universally acknowledged virtues are the following: Patience, Kindness, Humility, Temperance and Charity. Inversely, the sins are all but mandated by the necessities of an economic system in which the overriding value is material gain. In such a system, Patience is replaced with Wrath, Kindness with Envy, Humility, with Pride, Temperance with Gluttony and Charity with Greed. An honest examination of each of these should make the validity of each one obvious.
In the competitive world of capitalism, driven as one is to achieve, there is little time for patience lest you fall behind a quota or a rival. Failure in reaching a quota can lead to a destructive anger with yourself, or in the second instance anger directed at your rival who then becomes elevated to the role of enemy. Kindness, which all too often is viewed as weakness anyway, gives way to envy for which one must find an excuse, either blind luck or an unfair advantage by the others. The envy is not only felt for the success of your rival but for the success of any or all others. In reality you find yourself in competition with the whole of society if not the world. In the event, however, that you should surpass your quota or best your rival, the temptation for excessive pride in your achievement may be temporarily satisfying to yourself, but it will hardly endear you to others. Think of what your reaction to the boasting of your rival would be should he have prevailed. It is highly unlikely that you might think of him as being temperate in his pride of acquisition. You might well accuse him of gluttony. Is there anything more disgusting? Perhaps not, but there is something far more destructive, and that is greed. Greed is considered by many to be the deadliest of the deadly sins, for its inverse is charity. The aims and objectives of a capitalistic system mandates greed, for capitalism must incessantly grow to avoid stagnation resulting in an over consumption that lays waste to the earth’s limited resources. Does this truly represent an improvement in the lot of ordinary people? In the face of these truths, Milton Friedman has the audacity to suggest:
“The problem of social organization is how to set up an arrangement under which greed will do the least harm, capitalism is that kind of a system.”
Is this an admission of guilt? Is this a conclusion that greed is inherent? Has he little or no faith in man’s capacity for goodness? What could he be thinking? I have heard Friedman argue in support of inherited wealth as a means of passing something on to better the lot of succeeding generations, suggesting that we are a family-oriented society, and that perhaps our greatest incentive for accumulating wealth is to provide for our offspring. But is there no thought that it might better their lot to pass on an earth whose resources have been carefully conserved, rather than to pass on the ill-gotten monetary gains derived from the waste and ever-increasing exploitation of those resources that the capitalist system demands?
Then too, this essay would not be complete without some mention of the damage such a system does to the human psyche. This system has boastfully led to the concept of the “rugged individual,” the man who needs no one. “It’s me against the world.” How silly can we get? Once again, religions and sages have preached the necessity for brotherhood. We are our brother’s keeper. The indoctrinated idea that man is at odds with his fellow man and competitive by nature is false. His natural inclination is to work in accord with others for the good of all. Driven by a desire to beat the other guy in the accumulation of more and more, deceit becomes a choice for success, if not mandatory. With the loss of truth, there can be no trust, and with the loss of trust this thing called love is no longer possible, and when love goes, there goes humanity.
So, while I can’t argue with the success of their system in terms of what they perceive as its function of attempting to satisfy an insatiable greed, I can certainly argue that its success turns to failure in terms of the perpetuation of the human race.
Hal O’Leary, now at age 90, has been published in 18 different countries He lives by a quote from his son’s play Wine To Blood, “I don’t know if there is a Utopia, but I am certain that we must act as though there can be.” Hal is a recent recipient of an Honorary Doctor of Humane Letters degree from West Liberty University the same institution from which he became a college dropout some 60 years earlier. He currently resides in Wheeling, WV.