By Herb Bowie
No matter which way you lean politically, you probably have strong feelings about capitalism. It seems to me that there are a lot of odd ideas on this topic running around out there in today’s world. Let me offer some thoughts about what seems true to me.
1. Capitalism is not evil.
At its essence, capitalism is an economic system that does the following things:
a. Organizes useful work in order to maximize overall productivity;
b. Allows individuals and organizations to freely buy and sell products and services from and to whomever they like, at whatever prices they can negotiate;
c. Generates a surplus, in the form of products and services not immediately needed to satisfy the basic needs of members of society;
d. Provides a means for storing that surplus so that it can be used at a later date;
e. Provides incentives for individuals and organizations to invest some of their surplus, not in items and services that are directly and inherently pleasing, but to provide land, buildings, machinery and startup expenses so that labor can be employed ever more efficiently to produce better, more desirable goods and services.
Now, no particular implementation of capitalism is perfect at achieving all of these goals, but this doesn’t mean that there is anything fundamentally wrong with capitalism. Sometimes our economic system needs a tune-up, or even a repair. But we don’t say that the internal combustion engine is fundamentally flawed just because our car is running a little rough; instead we take it to a mechanic to make it operate in accordance with its design. I suggest that we think of capitalism in the same way.
2. Capitalists are not evil.
A capitalist is someone whose activities generate a surplus, and who decides to invest some of that surplus in the creation, expansion or improvement of various commercial ventures. Without capitalists, we could not have capitalism. If capitalists were not motivated to achieve some reasonable return on their capital, then we could not have capitalism.