December 8, 2009

• Does Capitalism/Business really fill needs?

  The other day I heard an interview with a more or less progressive Businessman who seemed like a reasonable guy and much of what he said made a lot of sense to me. But one thing he said struck me because it sort of reveals the core misunderstanding about capitalism that allows people to continue to believe that capitalism is inherently morally good.

  He was referring to the recent initiative by President Obama to work toward building more jobs. The President has recently held a Job Summit in the White House, has been floating the idea of redirecting saved TARP money toward small business job initiatives, and gave a speech today on the job initiatives the white house plans to engage in.

  What the Businessman said was that the people at the conference were misunderstanding the nature of the jobs problem. He said people were talking about jobs as if they are made out of thin air. But his argument was that jobs don't come out of thin air. Somebody, some entrepreneur, creates a business to fill a need. That's how jobs are made. That's how capitalism works. It fills needs and in so doing creates are amazingly wonderful advanced world. That was his argument

  Do you see the basic problem with this? It should be staring us in the face as blindingly as the Sun. Capitalsim fills needs. Hmm, does capitalism fill needs? hmmm...

  Do you need to drink coke? Do you really need it? How about candy? Fast food? Those are really necessary right?

  Do you need pornography? Do you really need reality television shows? What about big budget movies or movie theater popcorn? Would the world end if there was never another football game? How about if you never saw another advertisement again? Would that be the end of times?

  Do people need subprime loans? Or a big gas guzzling SUV? Do people need ten times the credit lines that they are likely to ever be able to repay in their lifetimes? Do you think people really need that stuff???

  Capitalism doesn't fill needs. It doesn't enable us to fill all these great wonderful needs we've developed over time. That's just a total misunderstanding of human nature as well as the nature of capitalism. Filling needs isn't capitalism's core function at all.

  It's WANTS.

  That's what an entrepreneur does. He finds something that people want and that they want enough that they're willing to pay for and then he sells it to them. It doesn't matter if they need it. It doesn't even matter if it's the exact opposite of what they need. It doesn't even matter if it's inherently damaging in the long run to BOTH customer and provider. If a person wants it, somebody will sell it to them. And if enough people want something, somebody can and will try to get rich off of the selling That's all there is too it.

  Think about an addiction. With enough people addicted to cigarettes, businesses can make billions of dollars selling cigarettes. And they do.  But those people who are addicted are not having their needs fulfilled. Quite the opposite, what they need is to quit smoking. That leads them to the longest term happiness. But they can't help but smoke because they are addicted. And they started smoking in the first place because of wants. The want to look cool or the want to relieve stress or the want to not stand out or the want to get high. Not needs. Wants. And industry was right there to fill those wants and worse tell people that it was perfectly safe and no harm would come to them for doing it.

  So much of our commercial industry exists to try and trick us into thinking our wants are our needs. And we are extremely susceptible to it. It certainly makes us feel better to think that we need that plastic surgery or that expensive car to get the highest paying job we can or to find a mate. It's nice to think that we need fancy vitamin waters to compete in sports and that we need to eat those delicious foods or go on those fancy vacations or to play those expensive video games to feel like we're living a good and happy life. But those aren't needs. They're wants.

  Fundamentalist capitalism as a philosophy promotes the idea that through free industry we can organically match together all our needs with the people who can fill them. In the theory we're all perfectly rational, albeit selfish actors. So what we demand most is what we need most and what we are willing to offer are going to be things that people need. The world thus gets better with every new business. A new need is filled that would not have been otherwise. It sounds GREAT in theory.

  But that's not how the actual world works. We are not that perfectly rational. And most of us are rational enough to KNOW that. In so far as we get our needs fulfilled by capitalism it is almost incidental. But we do get plenty of our wants fulfilled all the time. The richer we are the more wants we get. It just so happens that sometimes we're lucky enough to want a few things we actually need so those wants get fulfilled too. But at the same time there's all kinds of wants being fulfilled that we do not need with higher precedent than our needs. There are even some wants that we are getting filled that cause far more harm to us than good.

  Capitalism is not morally good. Nor is it morally bad. It's a system. It's not a magic system or a miracle system. It's just a system. And that's all it is.  It does some good things and does some other bad things, but to understand what those things are we have to take a calm reasonable sober look at what the system really is. Closing our eyes and pretending that capitalism fills all our needs like magic provided we just have enough faith in it is absolute rubbish and needs to be expunged from our consciousness.

  • 1:36 pm
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