Capitalism and Greed

My nephew and I had a disagreement about what's wrong. I say capitalism and he says greedy capitalists. He argues that capitalism is not the problem that it has produced many great innovations and that the problem is that we just need to reign in the greed of some capitalists. I agree that much progress was made over the feudal era, but I disagree about greed. Capitalism is a system based on greed, and without greed it cannot function. The basic assumption in capitalist theory is that when people act in their own self-interest, the market will balance it all out for the best outcome for all. I have argued that that assumption is fundamentally false in another blog. The problem, however, is that those who define their self-interest as greed are those rewarded by capitalism. They amass the wealth and thus the power. The ultimate pursuit of greed under capital is finance capital, the making of profit without producing anything. It's natural that the greedy would take over finance capital. Where else can a person earn billions of dollars without having to produce something that contributes to the well-being of society? Thus, capitalism rewards the greedy in direct proportion to their greed. You cannot eliminate greed without moving on past capitalism. You have to change the rules which determine who is rewarded and how. You cannot just reform capitalism with careful regulation. You would have to regulate it to the point that it is not capitalism any more. This thought is not original with me. Lenin wrote something similar long ago. He was asked why we could not reform capitalist society to favor those who work, to provide benefits to the many, etc. He answered that we could do that, but then it would not be capitalism any more. We need to recognize that in order to appreciate what needs to change to make this world a better place to live in.

Occupy Wall Street

This movement is the most hopeful sign any of us have seen in the USA since the Wisconsin revolt. It has the potential to unite very disparate groups because it focuses on the deepest roots of most of our social and economic problems, finance capital. It is spreading rapidly across the USA and internationally. Nobody knows what will come of it, but at least it is pointed in the right direction. I hope it will expose Barack Obama as the servant of finance capital that he is, part of the problem and not part of the solution.