The Nastiest of Men Doing Good

While I was at Lowe's Home Improvement yesterday, I saw a bumper sticker that read:
"Capitalism is the extraordinary belief that the nastiest of men for the nastiest of motives will somehow work for the benefit of all."
It's a quote from John Maynard Keynes. [Update: One of my astute readers has reminded me that one should never trust such an unreliable source as a bumper sticker. The claim that Keynes ever said this is VERY dubious. Having said that, my criticism remains of those individuals who believe what the bumper sticker espouses.] Some of you might recognize him for his influential role in the United State economy during the Great Depression. (Full disclosure: I think Keynesian Economic Theory is mostly garbage. Having said that, I should note that my study of economics is very limited.) Keynesian economics, in a very small -- and possible unfair -- nutshell is that capitalism needs control. That sometimes the private sector and the markets will not make the most efficient choices. I think Keynes missed some important stuff in reaching his conclusion.

I want to make two points in this post. First, we need to realize what Capitalism is in theory and what it is in practice. Keynes is criticizing an imperfect form of Capitalism. Second, even in its impure form, Keynes's quote is dead wrong, as evidenced by the "nastiest" of men.

1. Why we need to be careful with the label "Capitalism."

Capitalism, as I'm sure most know, is the brainchild of Adam Smith and his incredibly revolutionary book Wealth of Nations. His thoughts, again in a potentially unfair nutshell, were that the desire for profit would make the private sector run as efficiently as possible, and so the economy is best left alone. Laissez-faire -- literally "let do," or "let it be."

BUT! Adam Smith had laid a very important foundation to Capitalism: ethics and morality. Adam Smith intended his economic system to operate in a moral society. He wrote Wealth of Nations in 1776. But, before that, in 1759, he wrote The Theory of Moral Sentiments. In that book, in short, Adam Smith said that morals were necessary for Capitalism's success. Instead of having welfare and social security, Adam Smith intended for the private sector to create the necessary protections for the unfortunate. He argued that we would decide to create those protections because we would feel a moral obligation. Obviously, "moral" is not the first word that comes to mind when I describe our society. We live in a society where a desire for instant gratification reigns supreme. Our culture is so focused on "me" and "I" that Capitalism, as envisioned by Adam Smith, will not operate as intended in our immoral society. (It's for that reason that I believe in minimal government intervention - a topic for a different post). But let's focus on why we need to make sure that we don't demonize things merely because the implementing society screwed it up.

Socialism has gotten the same negative reputation from the likes of Lenin/Stalin's Communism. Socialism sounds pretty good to me, as envisioned by Karl Marx. Everyone works hard every day. We share what we create. Everyone is equal, because we all try our best, and that's all you can ask from someone. PROBLEM: instant gratification, sex, drugs, and TV. Working hard doesn't sound as fun as sitting on a couch doing drugs and watching TV all day. Accordingly, Socialism isn't going to work because not everyone is prepared to work hard everyday when they could watch TV, do drugs, and have sex in their drug-induced stupors instead. Until every single person signs on to Communism/Socialism, it will not work.
Spoiler alert: I don't think any society will ever be able to execute Socialism as envisioned by Marx.

Just as it is unfair to label the Soviet Union as a Socialist nation, it's similarly unfair to label an imperfect implementation of Capitalism as actual Capitalism. I resolve from this point forward to refer to the US's economy as an "imperfect Capitalism" model. Keynes should have been a little more careful to separate reality from theory when he made this little sound bite. When Keynes rants about the evil of Capitalism, he's doing a disservice to Adam Smith and the idea of pure Capitalism. Let's not cheapen Capitalism, which, in theory, is, I believe, as good as it gets.

2. How the "nastiest" are making Keynes look like a fool -- a case study.
Even though we have an impure form of Capitalism, I think Keynes is wrong. Based on Keynes's logic, the wealthiest men from Capitalism must necessarily be the nastiest. After all, they have exploited Capitalism the most, so as to become the richest. So who are the "nastiest" in the United States? Bill Gates and Warren Buffet. According to Keynes, it is "extraordinary" to believe that these men would "work for the benefit of all." Well Mr. Keynes, this is going to be a bit awkward, but...

Warren Buffet has given 30 of his 50 billion dollars to the Bill and Melinda Gates Foundation.
That's the same Bill Gates who owns the title of "nastiest" American (63 billion dollars in the bank). Gates, an even  "nastier" man than Buffet has recently decided to donate almost his entire fortune, 58 billion dollars, to the foundation. Click the link if you want to learn more about the Foundation, but its work is anything but "nasty."

Is this to say that all entrepreneurs have followed Gates and Buffet's admirable footsteps? Certainly, the answer is no. But Keynes's description of Capitalism is clearly flawed. There is nothing extraordinary to think that man has an innate moral desire to help everyone. People still count their Blessings and realize that their Blessings come with a string attached to help others. These are not "nasty" men, they are successful, wealthy men. Ultimately, I believe Adam Smith was right; there is an innate level of morality, and it's playing out every single day in our imperfect society. The morality of just these two men is saving thousands, if not millions, of lives in Africa. In the 30 minutes it took me to write this post, Bill Gates made something like 50,000 dollars. And he gave 46,000 of it to charity. Sure, his wallet isn't empty, but he could make it a whole lot fuller.

So, to the man with the bumper sticker that offended me enough to write this post, maybe it's about time to cut Capitalism, in either its pure form or its imperfect form, a little slack...

Off to chill on my black rock...