Article

The devil's economics

Why motivations matter
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This is a topic that I know is going to cause a few backs to bristle. Maybe that's one reason I've put off writing this article, even though the idea's been swimming in my head for months. I'm about to tell you that everything you know is wrong. Don't worry, you'll get over it soon enough :)

I'm going to talk about capitalism. Let's start by defining it and breaking it down into a few fundamental principles.

  1. Free markets
  2. Private ownership of the means of production
  3. Capital.

For the purposes of this article, I’m going to define capitalism thusly: a type of privatist free market economy where the primary motivator for everyone involved is the accumulation of capital.

You might have already noticed how I’m focusing on one particular aspect of capitalism, and you can probably guess where I’m going. I know that a great many people consider capitalism to be synonymous with free markets and privatism, and there's a tendency to ignore the capital in capitalism. Even the Wikipedia article gets a fair amount of frequent revision on that point. (As of tonight it reads: "Capitalism is an economic system in which trade, industry, and the means of production are privately owned and operated based on the profit motive, with the price system providing price signals." So, for now, Wikipedia supports me.)

OK, but why is this difference so important? I'm so glad you asked! What does it mean to accumulate capital? Well, accumulate means to gather or collect, and capital means wealth. A free market means you can start your own business without having some government agency waiving piles of red tape in your face. Privatism means you own your business instead of the government or the people owning it. Capitalism means you start that business with the single-minded objective to get rich.

We have another word for that: greed. Yes, I just said that capitalism is institutionalized greed. Greed is the love of money. And we all know that "The love of money is the root of all evil." Therefore capitalism is evil. I told you I was gonna ruffle some feathers. But that's why I needed to define it, first. Because when most people talk about capitalism, what they really mean is free market economics or privatism. I don't have a problem with free markets or privatism per se. And most people are reasonable and can agree that selfishness and greed are bad things. But people have a tendency to ignore the greed when they talk about capitalism, especially when it's an election year.

But capitalism (greed) isn't our only option. There's a better way. We don't have to change our economic model, increase regulation or raise taxes or seize private business. All we have to change is our mindset. We just have to decide that there are more important goals than money, and businesses and people should be judged by those goals rather than their bank accounts.

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