Dad Talks. EP. 1 | Ethical Economics AKA Humanity Vs. Capitalism

Dad Talks. EP. 1 | Ethical Economics AKA Humanity vs. Capitalism

The Context - Discussion with friend over text

Friend : We still put money before people. 

Me : But as humanity grows we’re more knowledgeable now, and we’ll catch people and hold them accountable for it. 

Friend : Literally the opposite has happened. 

Me : I refuse to give up on the good of humanity. 

Friend : Oh, Humanity is good. Capitalism is evil. 

The Discussion with Dad - Also over text, and prompted by me presenting the above discussion and my thoughts on it. 

Me : Greed is evil, economy is a neutral entity that is wielded. It is one man’s greed that sours it. 

Well this poses an interesting question.

Can a concept, which due to the nature of human history, is created by man be neutral? If it is created by humans, who are intrinsically biased and lean forwards either positive or negative questions, then can it truly be neutral? 

Can I claim that something man made is neutral when I proclaim man is good but inherently fallible?

Dad : Sounds like you are doing fine. You pose the more interesting question. Capitalism, and even the idea of economics, are man-made creations. But not necessarily in the way a building or an invention is, or.a book or painting.

Economics comes from the idea that humans require, or desire, certain things to survive, and take action to acquire those things. As the types and numbers of things fluctuate, as well as how many humans and there are and how those things are produced, certain patterns of behavior emerge that seem to be driven by the numerous variable. Hence we study economics as a sort of science - it seems to operate under certain principles that can be deduced by observation and testing. It’s sort of like anthropology or sociology, we are trying to understand how humans have developed or how they will respond.

Me : So in considering it’s study being a science, can we presume we should be neutral in judging its patterns and more so directing moral judgements on those who use the properties of economics to act?

Dad : Capitalism is at, its heart, a theory of economics. One might even say it is the most basic and fundamental theory of how economics works. But it makes assumptions about how people respond to their economic stimuli and their motives. The primary assumption is that people will act to maximize their things. (Keep in mind that I am not an economist and that there is a great deal of literature on this topic - it has been studied a lot.)

There are other theories that predict that people and societies react differently. Capitalism tends to be more individualistic. Socialism and communism more focused on the wellness of the group.

Me : So does capitalism assume greed or does capitalism encourage greed?

Dad : I think you can approach any of those theories with a certain neutrality; the theories themselves are neither good nor evil. How people apply those theories can be approached from an ethical standpoint.

Me : Fair.

Dad : Does capitalism assume greed or encourage greed? Interesting question. Probably both, but even greed might not be the right word.

Then the question is what is the word that capitalism works off of.

Well, the question overall is interesting because in economics it is difficult to separate economic theory from an economic system. That is precisely because humans are involved. It is a bit like Heisenberg’s uncertainty principle or Schrodinger’s Cat - you can’t know the outcome or state of the system unless you act to measure it, but your act of measuring it determines the state of the system.

In economics, how one believes the system works depends partly on how one believes humans act or should act, and humans can work in different ways.

Me : Damn.

This leaves me and my friend very much at odds because I believe we think inherently differently on the way humans work. I think we both find humans to be naturally good, but I more easily overlook the times human do bad to embrace the times human do good while they are the reverse.

I will lean towards capitalism because I like the individualistic approach while still having great faith that more times than not humans will do good.

Dad : You will find there are several different version of capitalism as an economic and political ideology.

Me : But my friend leans towards socialism because they have seen too many times that humanity can be bad and the system abused, so an economic plan for the welfare of all appeals more to them because they believe the opportunity for bad is inherently tempting.

It worries me that I may only find capitalism appealing because I think I myself will work well in it, or perhaps that is my privilege that leads me to favor capitalism. 

Dad : Humans are involved in all of these systems. There are no robots or divine forces that will be kind to everyone if only we let them.

Socialism relies on good governance to work. It can be as poorly applied as capitalism.

Me : True.

Dad : Capitalism often maximizes freedom of the individual, which allows individuals to flourish more than other systems, but also allows individuals fail more than other systems. It can also lead to unhealthy balances of power or wealth that can twist the system into actually being intrinsically unfair. This is likely because capitalism is a near perfect theory in an ‘unbounded’ system (resources and people and space are limitless), but when applied more practically to the bounded systems we actually live in it needs some regulation and constraint. (My own personal theory - might be complete B.S.)

Me : Don’t sell yourself too short, it’s the observation of peers that make a theory sound.

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Quote of the Day : From the Classic Doctor Who Series, in the final episode of the Castrovalva. 

The Master, to the people he has created - “You do not have the will to do it.” 

The People he made, responds with - “You may have made us, Man of Evil, but we are free.” 

*Proceeds to swing on a chandelier and break both the Masters machine and plan.* 

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Food and more reading for thought : https://plato.stanford.edu/entries/economics/