No amount of bashing on account of the current world economic crisis will do away with free market capitalism. There is nothing better to replace it. No other mode of production has been able to balance high levels of productivity and standards of living with a high degree of freedom while remaining substantially responsive to human needs. While far from perfect capitalism still outperforms other economic systems.
That capitalism will last is both a good and a bad omen. It is good because eventually it will continue to improve our way of life; will serve as an engine of growth to dozens of economies; and will influence non-capitalist economies with its positive values, technologies, and innovations.
Long-lasting capitalism also bodes potential disasters. Being the most efficient creators of wealth, capitalist technocrats know too well that we are at their mercy. We have to play their game because we badly desire the benefits that only they—and capitalism –can provide.
Despite ideological quibbles over what constitutes true capitalism, the two essential common denominators that characterize the capitalist mode are the individual desire to make money and freedom.
While we all need the bare minimum to live, the presence of a strong profit motive akin to greed characterizes the capitalist mindset. Although most of us can be a bit greedy at times, this mindset is the dominant behavior in the business world. In our case, what concerns us are the three or four percent of the population who are at the forefront of our major corporations.
The fact that such an infinitesimal minority has been able to bring world growth to a halt attests both to its power and to the risks it can drive us into. But before we pass moral judgment upon our technocrats we need to understand that, were it not for their greed, we would not enjoy the fruits of capitalism.
Moreover, can we blame them for the risks they take, particularly after we force them into behaving the way they do? What many people seem to ignore is that high-level corporate officials at public-held companies have a fiduciary requirement to make as much profit as possible on behalf of its stockholders (many of us). If they fail, they suffer public embarrassment and sometimes get fired. If they succeed, they and we get richer.
Such is the curse of capitalist technocrats: they are not only greedy, but we force them to be greedy and to take risks on our behalf out of self-interest and our interests.
Should we try to tame the beasts? The only reason why we would want to is because of the suffering they can bring about upon millions of people when their “blessed” greed takes them into uncharted difficulties such as the ones we find ourselves in today. Other than that, they might as well continue to create wealth and improve our standards of living.
Many suggest that we regulate their actions, enough to avert economic crises but without choking their profit motive drive. But achieving this balance is akin to having our cake and eating it, too. These are individuals who demand exceedingly high compensations as a motivation to work; not that they can become baseball players or Hollywood actors overnight. The shortcoming of regulations, however, is that they can always be circumvented. This time, regulators were fooled, inattentive, and some possibly in collusion.
Another alternative is for our technocrats to develop—and the universities to instill—a sense of social responsibility. Social responsibility can be an extremely powerful motivator, as powerful as profit motive and greed, but without the downside. It requires a new frame of mind although the objectives would be very similar as those that motivate the capitalist spirit. Unfortunately, such a drive has failed to inspire our capitalist technocrats mainly because those who keep them in their positions—us— prefer that they do the “dirty” work while we reap the benefits. Of course, we will criticize them, too, when they ruin us.
One thing seems certain, because capitalism has been so productive we need to save it from itself and somehow that entails saving it from us.
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