Rebutal to Kathrine Mangu-Ward TED Talk - "What capitalism gets right - and governments get wrong"9/4/2022 TED2022 - Katherine Mangu-Ward - Editor in Chief of “Reason” magazine.
"What capitalism gets right — and governments get wrong" Dear Katherine, I recently listened with interest to your TED Talk on What capitalism gets right — and governments get wrong. https://www.ted.com/speakers/katherine_mangu_ward Like you, I like Capitalism. There is no greater engine of creativity and industriousness. However, I would like Capitalism a LOT more if it had a moral compass and was much less predatory and extractive. I invite you to join me in a thought experiment where we imagine a world driven by “Capitalism with a moral compass”. Such a world would be much more self-regulating and as a result there would be a dramatic decrease in the amount of Government regulation required, and thus a related dramatic decrease in the size and cost of Government. If the cost of Government is significantly less, then perhaps taxes could be reduced for everyone including businesses. Yes, both poverty and literacy have improved dramatically. And many other indicators of wellbeing have similarly improved. However, you attribute this entirely to Capitalism. You have shown that there is a “correlation” between the rise of modern Capitalism and these improvements, but you have not demonstrated a sole “causal” relationship. You ignore the fact that many of these improvements came through hard fought government programs and laws. Indeed, Capitalism often fought against many of these programs and laws. Through the creativity and innovations of Capitalism, we have a world today which is capable of feeding everyone. And yet we have a world in which we have great hunger and starvation. If we imagine a world driven by Capitalism with a moral compass, there would be very little hunger or starvation today. We would have a world where corporations pay a fair living wage and try to minimize the long term environmental impact of everything they do. Instead, we have a world of economic slaves. America is the richest country in the world, and yet 50% of the population live from paycheck to paycheck and have virtually no retirement savings. In many parts of the world, it is even worse than America. We should be ashamed of a system that has produced these outcomes. Modern Capitalism played a leading role in creating a world in which climate change is a threat to humanity’s very existence. Governments have tried to regulate industry to benefit the environment, but Modern Capitalism has fought it every step of the way - successfully more often than not. Now we have a world that is going to face trillions of dollars of climate change driven damage to property, infrastructure, and to the very lives of people. And who has to step in to rescue people facing unimaginable tragedies due to climate change? Government - the very beast that modern Capitalism hates the most. In a world driven by Capitalism with a moral compass, corporate profits might be down a bit and the wealthy a little less wealthy, although I suspect the opposite would be true in the long run. We should be striving for a world in which everyone can be wealthier and healthier and happier. And this includes a healthy environment. The world CAN be a much better place than it is currently. Let’s focus on making that happen. Let’s focus on creating a Capitalism that can do that. More of the same is NOT the answer. Thanks for listening. Julian Sale [email protected]
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Societies are defined by the complex interrelationships between various systems.
Today, all social systems are in various states of turmoil and disruption around the world. Recent western world examples include Brexit, the US Presidential election, EU’s struggle to survive, etc. If we focus on economic systems or capitalism, we see a huge tug of war concerning the amount of government regulation and taxation. That is what is happening in the US in the polarized battle between Republicans and Democrats. Indeed, it is even happening within the Republican party itself at the moment. Capitalism is an economic system based on private ownership of the means of production and their operation for profit. Economic systems
The overwhelming philosophy and moral basis of capitalism has been and remains “anything goes as long as it is legal” and armies of lawyers and financial advisors are constantly pushing the boundaries or grey areas of what is legal. Of course, there are always a few who operate illegally, unknowingly, and worse, knowingly. So we are caught in this ever escalating “regulatory warfare” with no end in sight. Capitalist businesses and institutions pushing the boundaries and governments/regulators trying to protect people and the environment with laws / regulations. With the advent of the Internet, the pace of this regulatory warfare has quickened. Finding a loophole in the laws/regulations spreads across the world at the blink of an eye. The sheer number of regulations and the resources required, first to generate them, and then to police them, is grinding our entire economic system into lower levels of efficiency. No wonder some people are up in arms. In democracies, with the periodic swings between governments which favour reduced regulation and those which favour more regulation, the idea was that we would achieve some sort of reasonable equilibrium. With increasing polarization and acrimonious stances within our political system, this aspect of democracy is breaking down. The Internet has played a huge role in this. Special interest groups big and small can influence political and public opinion more than ever before in our history. As with any “war”, it devolves into a death spiral until something dramatic happens. Like the “cold war”, and the “arms race”, and “cyber warfare”, and “terrorism”, we have to come together on a global basis and change how things are done. This will take extraordinary leadership. To some extent, this was achieved with the cold war and the nuclear arms race, although recently there are signs of regression in both these areas. Sadly there are no world leaders on the horizon who are providing leadership in terms of breaking the mould of regulatory warfare. So, what can be done? Well, perhaps the Internet which has been part of the problem so far, can actually be part of the solution. Perhaps ordinary people can create the leadership required for change. If we go back to the fundamental philosophy and moral basis of capitalism as “anything goes as long as it is legal” and use the Internet to create a movement that challenges this, then it might just be possible to break our current destructive path. Perhaps the fundamental philosophy and moral basis of capitalism can be changed from “anything goes as long it is legal” to “anything goes as long as it is legal and is consistent with publically agreed upon moral and ethical values”. It might be called naive to think that something like this could happen, however, in a small way, it is already happening. There are some companies who are consciously positioning themselves as adhering to publicly stated values and are freely being much more transparent about being measured and judged by their performance against these moral and ethical values. These include treating their employees fairly and taking into account things like the long term impact on the environment, and not accepting an “anything goes” position. A movement needs leadership but that leadership does not have to come from governments. It is within power of ordinary people to make a difference. We need to make this happen by changing our own behaviours - speaking up for such a movement, purchasing goods and services from those corporations who publicly support this expanded notion of the philosophical and moral basis of capitalism, letting corporations know that is what you expect of them in the future, and voting for those who support such a movement. It is already starting to happen with initiatives such as ethical investing and BCorp Certification https://www.bcorporation.net/ leading the way. It would be an evolutionary process rather than revolutionary, although even evolution can happen so rapidly these days, it might seem like a revolution. Additional Thought: Based upon verbal feedback from my friend Bruce Whitestone, this article/thought needs to end with a bit more punch. So here it is. "The world can go in one of two directions. One, continue the trend of regulatory warfare and polarization of politics, and just about everything else in society, until the whole system breaks down. It could end in catestrophic failure and anarchy. Or two, evolve towards a more ethical and civil society. The exciting thing is that for the first time in our history, individuals can play a vital role in this evolution. Through the increased availability of information about how corporations and governments work, we can make personal decisions in our lives that will change how corporations and governments behave. If the current system collapses into anarchy, then we can no longer simply blame others for its failure. The responsibiity is now on our shoulders because we have the power to change the world for the better. Be vocal. Buy ethically. Be respectful. Think about it and act on it in some small way every day! Then change will happen. |
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