Economics — Spectrum of Capitalism

Published: 31/October/2016

Capitalism is thought upon as being a dirty word. The marketed word pig often comes to mind, but another word is more prevalent especially in rent years, that word being greed. Sure, that is what Capitalism is, the inherent human vice that is greed. Another word looked upon as being dirty, but it’s an inherent trait that all humans possess. Without thinking too much about it, you will naturally assume that this one word describes a person in a suit and tie, sat at a conference table, talking to fellow suits about the best way to increase profit to keep faceless stockholders happy by growing returns on their investments. This pursuit of profit comes even at the cost of cutting labour forces and destroying communities.

This assessment of greed can be looked upon as being correct by most people even if you are unknowingly driven by greed. This image of greed however is distorted beyond belief, especially in recent times when the totality of economic history is overlooked. Greed fuels capitalism in the ways of both evil and good. The human condition tries to create black and white in situations, so to categorise a stance on greed is normal. You are either on this side of the fence or that side of the fence. There is no in between. Those seen to be sitting on the fence are disregarded, but what if there is no fence? What if there is only a spectrum of greed within capitalism? Is there a good greed? Is there even such a thing as good greed?

The more staunch and hardened left leaning comrades will throw out a Marxist quote that will seem to help reinforce your argument while the right leaning industrialists will rub their hands together so fast at the thought of a more unregulated marketplace a fire will ignite and they will think of ways to sell it.

Both ideologies are held in the hearts of very different groups of people and both are valid philosophies of greed (expressing greed in different ways, one is a fiscal way and the other is social) which have more than likely sprouted, taken root, and blossomed from the environment you have grown up in, but what about balance in the spectrum of greed where the good in these two polar greed belief systems are brought together to achieve a balance to make a third and encompassing way of thinking? This bridging belief system of greed can be, and has been shown to be good.

Economic Left Leaning Belief System — Greed for Collective Betterment

A left leaning thinker has this different greed to achieve fiscal equality that to a point is commendable but in itself leads to problems. Economic welfare should be for everyone on all rungs of the socio-economic ladder, but if you truly believe everyone (no matter the profession) should be making the same income no matter their output, you get highly specialised people like a doctor, teacher, or crop farmer making the same living as people who are happy to be part of a sponge society.

By having no incentive to work, thus an opportunity to increase living standards and expecting this economic practice to add to the overall welfare of the world, this is just impractical and simply does not work. This is well documented in in the post-World War 2 world of Russia up until its collapse in the very late 80s. There are of course people who need the social welfare system and we have a duty as decent human beings to look after these people and to help make their lives better along with our own. However it’s those who are healthy enough to be employed or start their own businesses, who simply due to a left leaning system that doesn’t reward work, value of self, and promotes dependence and laziness, has made them lacklustre (much like in the USSR).

Economic Right Leaning Belief System — Greed for Individual Betterment

A right leaning thinker will use greed to, for want of a better word, capitalise on the marketplace and make as much money in the way of profit as possible without any due diligence for the methods used, people affected, or future economic and environmental outcomes. This is the mercantile nature of these pure industrialists.

Yes, the system they use favours a select few who obtain more wealth than they need, to generate even more wealth, but even in that system there is more room for skilled people to generate more income and improve their lifestyle. In saying that, it is fantastically skewed towards the elite of society. The deregulation of the marketplace is good in certain aspects, all you need to do is look at the four freedoms of the European Union, but in doing so it creates possibly too much competition for jobs and therefore will lower the cost wage pricing that an individual will put on their time spent working, meaning lower salaries in fields that should be higher, and to achieve a higher standard of living they will spend more time in work than living a life. This is thankfully where trade unions shine and should be implemented to prevent dilution of the price of working. The problem is that when unions get too powerful, they can demand higher wages thus artificially inflating wages in industries where they shouldn’t be inflated, and a rise in wages can bring a rise in prices of goods and services making said goods and services more expensive than they need to be.

Job creation will therefore thrive as cost of labour will be low enough for competitive companies to set up, but will the standard of living for the individual? One needs to only look to high density areas and the cost of living with such measurements as rent to see the fall back with this. Spending most of the monthly salary to rent a one bedroom apartment that you share with three other people in order to travel an half an hour commute (or longer) to and from work to get paid a salary that barely allows you to just survive. This is like paying for the pleasure to be able to work. This is a product of an unregulated financial system that has led to the recession back in 2007/2008.

Spectrum of Capitalism — The Good Greed that has come from Capitalism

Some examples of what capitalism has brought to the world are very easily and clearly answered. Look around you and you’ll see the products of capitalism from the electricity that flows into your house to light up the darkness, the oil or gas that is used to heat your home when it’s cold, the medicine that is created to prevent you from getting sick or dying, the televisions that you watch for information and entertainment, and the laptop, tablet, or phone you are reading this on. Capitalism made the world smaller and more accessible for those it may not have been open to before. It has also answered questions through avenues of innovation that would otherwise be left unanswered, like would it be possible to communicate with a person on the other side of the world immediately if the incentives to innovate were not available as through an economic system like communism? Capitalism has allowed us to dream big and make those dreams reality.

Good greed brings innovation and invention to the world. It helps improve the environment of the planet and environment of living areas by reducing poverty with an equitable income distribution, judicial equality, and social equality. This is the greed that strikes the balance on what I will call the “Capitalistic Spectrum”. It’s a system that like every other is easily corruptible (it will never be argued that it’s perfect), but that is human nature to want more than is deemed necessary. However, it is a system that gives back the most and does indeed raise the overall welfare for the people, but the checks and balances of good social policy (don’t get social policy mixed up with socialism in this regard) stemming from good governance and fair policy interference help in this.

The financial side of economics is well studied and documented due to its practical nature when compared with the more theoretical nature of economics, but it’s the social and more important moral economics of the human condition that will need re-evaluation and training to resist crossing that thin line from were profit is used for good progress to were profit supersedes the needs of the many and their welfare. Moral opportunity cost in economics must be thought about and what is being foregone socially to be gained fiscally and vice-versa.

About Author

Jonathan McEvoy is an Irish based border control post inspector for the Irish Government and Europe Union who took up his role in 2019 in response to British withdrawal of trade agreements, which was a position taken up after time spent working within the financial services sector in Dubai. He is an economics and finance postgraduate from Waterford Institute of Technology and a community stalwart in his home city of Waterford having been elected to serve on many boards of directors around the city in a voluntary capacity. His love of writing has a deep theme of economics in every published article which talk about history, philosophy, finance, politics, and society. His writings are grounded in practical observations away from the theoretical hypothesis of hypothetical potentials. If you are looking for a modern digestible viewpoint on modern economic ideas with a focus practicality and no holding back, he is a writer for you.

Find Jonathan on the social platforms @jonathanmcev0y

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Jonathan McEvoy

Jonathan McEvoy

It is good to be back on Medium. This is going to be the second home of all articles that have been written about and published. Get in touch @jonathanmcev0y

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