Capitalism is Good and It Saved My Life

I have tried, unsuccessfully, to write a post about the greatness of Capitalism. There is waaaay too much ground to cover; Capitalism is great on so many fronts, and that makes it hard to write less than 10 pages on its introduction. It is hard, but not impossible.

I have deleted 1000 paragraphs in my attempt to talk about the greatness of Capitalism, and why we should embrace it as a future economic system rather than scrap it and try something else. Considering what I wrote in Capitalism Is Bad, there are many opportunities to improve Capitalism. However, the fundamental principles of Capitalism are time-tested. They are like the laws of physics; you may not like them, but that does not make them any less true.

Where I am going with this is to set up a series of posts about how I believe that the future of Capitalism, Democracy, and perhaps Western Civilization, lies in the success of Corporate Social Responsibility. It all starts with the assumptions that Freedom should be a fundamental right for all people, and that Capitalism provides that freedom economically to all who choose it.

If Capitalism is so bad, why not embrace Socialism, or some new -ism that we haven't defined yet? Because Capitalism gives us freedom. I started this series off at the beginning of this month by sharing my thoughts on freedom. Capitalism is equal to economic freedom for me. I cannot imagine a system that provides more freedom with my money. Therefore, in a nutshell, that is what makes Capitalism so great: its provision of freedom.

Look back on history and try to imagine where you would be given your current lineage, gender, race, and religion. If you go back to the eighteenth century or earlier (pre-Enlightenment) you would have lived a very dull, oppressed, and limited life unless you come from a family of nobility. 99% of us are not descended from nobility so we can imagine that at any point in history, we would have been restricted from owning property, borrowing, education, voting, moving to another town, whom you could marry, where you could travel, what occupation you worked at, etc... And I am talking about most white men here. If you were a woman or a man of another color back then, I shudder to think of your life.

So many things have contributed to our current freedoms and quality of life. None has contributed more than Capitalism, I would argue. When I take a week off of work and travel away from my home to a destination of my choice, I take it for granted. Had I been born in Ukraine in 1700, I would neither have the option to leave work nor to leave my town. Had I been born anywhere in 1600, I would not have had a choice of who I worked for or what my occupation was.

If I had been born in 1974 in South America or Africa, chances are I would still not have the options and liberties I enjoy today. Had I been born yesterday into an "untouchable" family in India, I would never have the hope of owning property, working a meaningful job, or marrying the hottie that I am currently married to.

The fundamental basis of Capitalism is market theory: Adam Smith's "Invisible Hand" that efficiently rights the wrongs without human intervention. I know, many people think that market theory is not as efficient as we would like to believe. Those are all people who have a stake in managing the economy and would be out of a job if we depended solely on an "Invisible Hand". Look at the Soviet Union if you want to see how managing an economy can bring you nothing but woe. The market contains too many unknown variable for any group of humans to regulate efficiently. When it is left alone, it regulates itself.

Market forces work better when there are more participants and less regulators. As we continue to add people to the world market, we continue to see prosperity grow. That is why it was in the best interests of the wealthy European families to allow more people to participate in the market economy once it began; those wealthy families that participated in the market continued to prosper as the market grew. The families that squandered their wealth and resources and depended on their "birthright" to get by rather than exercising their privileges in the market quickly lost their wealth, land, titles, and places in society.

Capitalism has a tendency to bring out the best in some people and the worst in others. We have laws to deal with the worst people. The best people would not be the best in any other economic system. By giving people the opportunity to own, control, and profit from their creations, we have provided an awesome incentive--one that can not be reproduced in any other system.

Let's say that the year is 1976. I have just graduated from an advanced Scientific University in Soviet Socialist Russia. I am a math wizard, a creative and energetic person, and I have the inkling of an idea for connecting computers and sharing information. It is going to take many hard years of my life to develop this idea, write the software, invent the non-existant hardware I envision, fight the political battles, scrounge up money, convince hordes of people to help...And it will all be owned and controlled by "the People"--the State.

I have the opportunity to invent something that is potentially life-changing and history making. I have the talent, I have the knowledge to get started, and I can probably pull the whole thing off. On the other hand, I could just be satisfied with a secure job for 8 hours and not endure the hard work, frustration, and heartbreak as "the People" take my invention and use it for something I am opposed to. I could just do what I am told for 8 hours a day, play around in my leisure, and live a stable, comfortable life with my family and friends.

Which would you do? Would you altruistically spend your blood, sweat, tears, and years on an invention and give it away for the good of humanity? Or would you just ignore the idea, letting it die quietly in the back of your mind as you enjoy the simple pleasures of life?

Let's look at the costs and benefits: if you develop the idea, you lose years of your life and in the end you get nothing back except (perhaps) a warm fuzzy feeling and a portrait of yourself hung in the hallway of the science institute. On the other hand, you can receive accolades, respect, and comfort from just doing your job well in a Socialist society, and you can spend more time with family and fun if you are not chasing down all the things you need for your machine.

Now assume that it is 1976 and you are Steve Wozniak, Steve Jobs, or Bill Gates. You are a college dropout with a good idea. You may not be the most talented programmer or engineer, but you are good enough to invent something that people want to buy. You could remain in your stable job at HP designing calculators or you could face the frustration, heart-break, and hustle of selling your idea.

Again, you are faced with a choice: do you live a life of obscurity and moderate means or do you put in the effort, make a $100 million overnight, gain widespread fame, have people offer you thousands to come and speak to them, have people name their kids after you, have powerful executives take notes when you share your opinion, and have the opportunity to sell your next idea for more money and less effort?

That is Capitalism. In China, you see people working furiously to copy products that already exist so that they can make a few bucks. No one is allowed to be rich and powerful if they are not a communist official, so no one actually invents anything. This is a people who are unbelievably well-educated, they have a looooong history, and there is money everywhere. However, they know that if they were ever to let out a great idea, it would no longer belong to them. Without an incentive for greatness, we will not see greatness come from China. We may see more lead-painted baby products and poisonous dog food, but not the cure for cancer or a new rocket engine that approaches light speed.

In Capitalist America, you have people throwing out every idea they can to see which one sticks. Everyday, people who were born into inopportune circumstances are finding that they can be rewarded for their hustle and creativity. Even if you are a minority, poor, illiterate, and illegitimate trouble-making slacker, if you can play sports or rhyme in a way that other people are willing to pay money for, you can be rich, famous, and relatively powerful. A self-imposed ignoramus like College Drop-out Kanye West can make money, scoop up the finest honeys, and insult the President of the United States on live TV in front of millions of people...and get talked about for years afterwards.

Therefore, despite the many ways that Capitalism is Bad, it has a fundamental underpinning that we must cling to: the freedom of the individual to profit from their efforts. First of all, it is only right that if "it" is yours, then you should enjoy the benefits and make the decisions regarding "it". Secondly, there is no stronger motivation we know of to inspire greatness in people than the allure of fame, fortune, and power.

Capitalism has allowed, and even encouraged, some bad things in our society. However, almost ever good thing that we enjoy is the result of Capitalism. The benefits of Capitalism inspires scientists, engineers, entertainers, and almost everyone else to new heights.

I know that for myself, I would never have educated myself if I didn't expect it to lead to future wealth, power, and status for me. Mainly, my education provides me with more options and control over future employment. In addition, I am a better employee due to my education. I am a better communicator. I understand more about business dynamics and I understand more about the world around me. Ultimately, I probably make better decisions due to my higher education. I am also in a better position to do something great, if all the other stars fall into place. In that case, my employer is better off because of my education. That means that my coworkers, managers, shareholders, and customers benefit from my education. My education not only improves me, it enables me to improve the society around me. And that is all the result of Capitalism.

Had this been a Socialist or other type of economy, I would not have read one book without naked pictures in it. Without the hope of reward, I would have just done what I had to do to stay out of trouble. Sure, I might have done a little to improve my position, but very little. If I had the brains and talent of Woz or Thomas Edison, I expect I would have been happy to hold a better job than most other people in my Socialist society, and I would have taken up fishing or Chess to wile away my freetime.

As an alcoholic, I can tell you right now what I would have done if I had come of age behind the iron curtain. There is no way I would have chosen industry over booze if that industry resulted in nothing more than callouses on my hand. Without the hope of owning assets, retiring in comfort, and building a better life for my progeny, I am sure that Vodka would have won out.

Therefore, Capitalism saved my life.