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Friday, July 18, 2014

Reviewing The Cultural Case For Capitalism Part 4 of 12

Today's post is late due to computer problems.

In part 4 of 12 of his A Cultural Case For Capitalism (click here), Witt wants to distinguish Capitalism from 2 unfavorable human traits, consumerism (the negative form as seen in the never ending growth in the accumulation of unnecessary goods and services) and greed by the business owner or producer. In essence, Witt is trying to separate Capitalism from greed regardless of the source of that greed. The question becomes whether he succeeded. 

In distinguishing Capitalism from Consumerism, Witt wants to assert that consumerism doesn't drive the economy, capital does. And, according to Witt, Capital cannot be accumulated by "running up credit card debt" on the retail level. Rather, the combining of capital with "creative labor" creates what people are willing to buy. But in trying prove his case, Witt oversimplifies what consumerism is and thus tries to separate Capitalism from consumerism using deductive reasoning--Conservatives often overuse deductive reasoning to prove their case. 

For a producer/business owner to get a satisfactory return on their use of capital, there must be an adequate market for their goods and services. So a producer/business owner will either be offering goods and services for which there is an adequate market demand or they will produce goods and services for which they believe they can create a market demand. Thus, we could say that an indication of a business' reliance on consumerism can be seen in the resources invested to create, maintain, or expand the perceived need for a business' goods and services. 

Note the perceived need is what is key. That is because there is a difference between an actual need and perceived need. And when there is a significant difference between the two, some kind of deceit is often employed to create the perception. 

In addition, we might want to note that to say that an economic system depends on consumerism, we might want to distinguish two kinds of consumers in whom market need is created: retail customers and government. The more that an economic system's resources are invested into motivating those from either group to buy more than what is necessary, the more that that economic system depends on consumerism. We should note how our government has overspent on military and medicine in order to maintain the financial health of some major businesses.  And personal experience along with marketing budgets from businesses tell us how many resources are invested in the advertising. For it is advertising that is used to shape our perceptions about what to buy. We should note that one parallel to advertising in driving the perceived need for government to consume goods and services is money spent on lobbying.

Finally,we might want to note that Witt's argument, which is designed to separate Capitalism from consumerism, is rather disingenuous. For just as Witt says that the capital necessary to drive the economy cannot coexist with huge credit card debt, we should note that those who use capital to create products are not necessarily from the same set of people who are overextended on their credit cards. For in these two groups, you have business owners who depend on accumulated capital to make new products for economy on the one hand, and retail customers who have overspent on their credit cards on the other hand. In addition, we might point out that credit cards themselves are a service that is provided by those in the financial sector of our economy. And, of course, examining credit card debt is another indicator of whether our economic system relies on consumerism.

In other words, when we look at the facts on the ground, we see that the unnecessary consumption of goods and services is a significant factor on which the current status of our economic system depends. These facts contradict Witt's contention that Capitalism and consumerism are not sleeping together.

Equally disingenuous to Witt's attempt to show that Capitalism and consumerism do not play well together can be seen in how Witt tries to show that Ayn Rand-style greed and Capitalism do not have to be playmates. Witt cites two examples of people who are business successes but who have proven themselves to be not greedy. He claims that lifestyles of Ikea's Ingrav Kamprad and Microsoft's Bill Gates by how they travel and both live and give to charity respectively speaking. 

But how do those parts of their lives show that their companies did not grow as large as they did because of greed? One only needs to look up the business practices of these two companies to see if greed was a necessary ingredient to their growth and success. In examining the business practices of these two companies, one should look at how these companies treated all of their employees and customers and how they competed with peer businesses. In particular, one should examine the available court transcripts of these businesses' dealings in court.

But whether greed is an integral part of the system cannot be proved or disproved by the examples from such a small sample. Rather, one needs to either look at the majority of businesses involved or obtain an overview of the system. From what this blog sees, greed is an essential part of Capitalism, at least our current form of Capitalism is. This can be shown by how self-interest is portrayed as being the driving force not only in one's own success, but in the success of others. Thus, self-interest is seen as a necessary ingredient to the success of our system. However, altruism and collective ownership are portrayed at best as luxuries in that the former is not mandated by law while the other is denied by how workers are treated and compensated. As a teacher, I have run across students who were former employees from a number of large businesses because their jobs were outsourced to those from other countries who would work for less pay.

From what we see in part 4 of his series, it seems that Witt is describing an ideal form, or logical definition, of Capitalism which does not match what we are witnessing in today's economic system. And his description seems to support an economic freedom that would deny interference from government regardless of how democratic that government was and regardless of the claims to the ownership of business that other stakeholders should rightfully have. The end result is that Witt is defending a system where the economic elite are proudly flying the flag that says, "Don't Tread On Me," while using their defended freedoms to tread on the rest of society. Perhaps, this is why we see less and less democracy being exercised in our political-economic system while wealth disparity is climbing. Remember that increased tyranny and wealth disparity are the results of a diminishing democracy and a shrinking collective ownership (click here).


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