Capitalism, Greed & Human Nature

09 Jan
Liberation Theology is back as Pope Francis holds capitalism to account. Amid accusations of Marxism, Pope Francis has turned the Vatican into the spearhead of radical economic thinking.

Sometimes I despair – actually MOST of the time. The problem in society is not any “ism” per se, but INDIVIDUAL FLAWS in “Human Nature”. Surely a Pope could grasp this, given the theory of “Original Sin”?

ALL of us are “selfish” to different degrees. You HAVE to have SOME selfishness in order to survive. The problem is when the DEGREE of selfishness is excessive. This principal holds for EVERYTHING. Take “greed” for example. You need a bit of greed to be ambitious, and you need ambition of some kind to achieve anything at all.

  • Einstein was “greedy” to understand puzzles about the natural world. Had he not been “greedy” to work out what was going on he would not have solved the problem.

  • An artist has to be ambitious to want to produce something people like and which may make him some money. Without SOME ambition we would not achieve ANYTHING, but be like Syd the sloth in “Ice-Age”. But even he in the end was ambitious to become a good member of “the herd”.

  • An ambitious businessman who wants to make a million dollars is of course “greedy”, but TOO greedy? However, an already-rich Enron executive who wants even MORE millions he can’t possibly need to live very well, and to achieve this behaves in an anti-social fashion to the point of breaking the law? We all I guess would call him greedy.

In other words, it is all a question of BALANCE. When things get out of balance, you get problems, and this applies in EVERY field of human activity. There is of course no scientific way of defining what is excessive; it has to be based on commonsensical consensus.

To put it another way, SOME people can be extraordinarily nasty and greedy in capitalism, socialism, communism, Buddhism (rarer I grant you) or any other kind of “ism” or “acy”you can imagine, It is not the “ism” that is the problem, but the INDIVIDUALS, and they are like this because it is our nature. Some of us are programmed to do excess.

Having grasped this – to me – rather bleedin’ obvious point, the next step is to develop ways to limit excess. We already do this in some areas, the law for a start, but NOT enough in – as it happens – “capitalism”, where greed is allowed an almost total free rein. For example, it was reported a couple of days ago that top CEO’s had by the end of the second day of the year earned as much as the average annual salary for the country as a whole. This is an example of greed gone mad. And it is easily fixable: the govt only has to decree that NOBODY shall earn more than x times average annual salaries. Some would try to fiddle this with other ways of remunerating CEOs, but that could be stopped. Anyone cheating would have their entire wealth confiscated for a start.

One has to ask why cretinous governments allow excess. Take storecards, for example. These are credit cards issued by, for example, M&S, on which an insanely-high rate of interest is charged. Unfortunately, some people are idiotic enough to use these cards and end up paying 30% interest or more, WAY above base-rate. But sometimes we have to be protected against our own natures. YES, we want to be “free”; we hate “regulation”, but if this principle were universally applied, then we would have hardly ANY regulations at all, which would be self-evidently insane.

Regulation and bureaucracy of course, are yet further examples of the need for BALANCE. You have to have some regulation, but too much is BAD. In the case of storecards, the stores are simply being excessively greedy. They could still earn a decent profit if the cards were – for example – only 100% higher than base rate. SEVERAL hundred % higher is just excessively greedy. What could the govt do? Simply make a law that nobody lending money may legally do so at an interest rate more than x% (to be defined by parliament) above base rate.

Housing? How can it not be excessively greedy for some people to own multiple homes while others own NO home and others neither own nor even HAVE a home? This is excessive greed and could be controlled. Most governments, however, lack the courage to control greed, and in the case of housing they are of course all involved in it up to their eyeballs in property wealth. Some MPs have even been imprisoned for fiddling expenses on accommodation ad other things.

But we are far too soggy with people AND organisations who do excess (including of course corruption, which can destroy societies completely). Petty thieves are often punished more severely than bankers, for example. And of course the latter have even less excuse, as those involved in the sub-prime scandal knew exactly what they were doing and were abusing trust. AND of course – and rightly – they thought they could get away with it.

However, as for “capitalism” in general, NO OTHER SYSTEM is as good at creating wealth, it then being up to the government to decide how that wealth is spread around. The problem with being so pathetic and soggy about excess is that capitalism is unfairly being given a bad name. Unfortunately, a forced return to any other kind of “ism” is just going to mean less wealth and of course more poverty – and NO reduction in excess, even if it is comes in different forms. ”Socialists” may feel more moral at eliminating evil capitalists and reducing everyone to the same level of poverty (as in Cuba and all other “socialist” societies of whatever shade of despairing bleakness) but it will not do their average citizens much good.

No, we absolutely need “capitalism” (which is just commonsensical recognition of our nature, that ambition and a certain amount of “greed” lead us to create wealth) but we HAVE to deal with excess.

Remember, it is not the “ism” per se at fault, but the INDIVIDUALS operating within ANY “ism” who are driven to excess. That is how we are, and it is pointless to pretend otherwise. Capitalism is flawed, but let’s put it right – not abandon it for something inevitably much worse.

APPENDIX: Some statistics regarding excess:

  • The richest 1 percent of Americans now take home almost 24 percent of income, up from almost 9 percent in 1976. As Timothy Noah of Slate noted in an excellent series on inequality, the United States now arguably has a more unequal distribution of wealth than traditional banana republics like Nicaragua, Venezuela and Guyana.
  • C.E.O.’s of the largest American companies earned an average of 42 times as much as the average worker in 1980, but 531 times as much in 2001. Perhaps the most astounding statistic is this: From 1980 to 2005, more than four-fifths of the total increase in American incomes went to the richest 1 percent.
  • The difference between what CEOs get paid as compared to the lowest employees in their company has increased by 1,000 per cent since 1950. Bloomberg did an extensive study of the annual pay of top executives as compared to their entry-level staff and found that CEOs make on average 204 times the regular salary but the differential is much more striking in certain retail companies. The biggest offender comes in the form of JC Penney, where their latest CEO Ron Johnson, who was recently fired, left with a $53.3million compensation deal. That is nearly 1,800 times the $29,688-per-year earned by the department store chain’s cashiers.
  • What recession? Public company CEOs paid on average $9.6 million, and it takes the average US worker a month to earn the $3K that they make in an HOUR.
  • CEOs running health-care companies made the most: $10.8 million – no wonder healthcare in the US is so expensive.
  • Viacom’s CEO Philippe Dauman earned $84.5million last year, the highest among the executives, according to the report. Dauman, 54, more than doubled his compensation from $34million in 2009.
  • Occidental Petroleum Corp CEO Ray Irani, 76, received compensation valued at $76million in 2010.
  • He was followed by Oracle Corp CEO Lawrence Ellison, 66, who received $70million.
  • Abercrombie and Fitch CEO Michael Jeffries earned more than $36 million.
  • In 2010, 299 CEOs earned more than 100,000 of their own workers put together as executive pay skyrocketed 23% (Ed. and this in the middle of a recession!)
  • They work for nonprofits but earn more than $1 million a year. An elite list of 10 charity chiefs are commanding astonishing seven-figure salaries, according to a new study by Charity Navigator.
1 Comment

Posted by on January 9, 2014 in Core Thought, Morality, Politics


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One response to “Capitalism, Greed & Human Nature

  1. Paul Handover

    January 9, 2014 at 2:17 pm

    It’s a terrible analysis of present times. Present times that in so many ways are unsustainable. Interesting period in which to be alive!


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