The workers are correct: capitalists are greedy, self-serving humans who only think about themselves. There is no difference between a capitalist, a despot, and a warlord. All three types care only about lining their pockets with treasure.
However, capitalists choose to acquire their treasure through voluntary trade, a method inherently more moral than taxing or plundering the masses. And through trade, millions of others can benefit in the process, not just the capitalist. Because participating in trade is both voluntary and beneficial to all parties involved, I would choose to live in a world filled with capitalists rather than tyrannical despots and bloodthirsty warlords.
When I talk about the capitalist, I am talking about the individual who truly finds a need unfulfilled and attempts to fulfill it; I am not talking about the individual who uses political connections to gain market share. For the ultimate treatment on how politics can be leveraged for economic gain, read Overthrow by Stephen Kinzer.
Because capitalists choose to fulfill their own needs by fulfilling the needs of others, they are compelled to care about their customers. As seen on the signs of many businesses throughout America, “If we don’t take care of our customers, someone else will.” Caring about the customer is how capitalists have increased the standard of living worldwide.
Competition makes the capitalist care about the customer even more. Without competition, the customer’s needs might be served, but not optimally. It’s true that some capitalists might continually improve their level of quality and price without competition, but competition sends a more correct signal to the capitalist on how to improve the end product or service.
One of the more integral aspects of the final product or service is labor. Goods and services cannot be made without it. So shouldn’t laborers be paid as much as possible? No. For the capitalist, he shouldn’t pay anymore for labor than he has to. Remember, capitalists are greedy; they want to make as much money as possible for themselves. Only the capitalist may determine what he should do with the money he earns. Maybe he’ll use some of those savings to buy larger quantities of raw materials in order to reduce the overall price for the consumer. Maybe he’ll rent out a storefront to compete in a new market. In a world of scarce resources, every dollar a capitalist spends on one thing means a dollar that can’t be spent somewhere else. If his employees will work for eight dollars and hour, why should he pay them nine?
This last sentence was not a rhetorical question. In a world of scarce resources, labor too is in demand so the reason an employer would pay his employees nine dollars an hour as opposed to eight is because his competition is doing so. If a capitalist taps into a new market where the supply of labor is very high, he doesn’t have to appropriate as much capital to labor as he does to other aspects of running the business. However, if a capitalist chooses to compete in a market where labor is short supply, he must offer high wages, good benefits and adequate working conditions to attract and keep skilled employees.
So not only is competition a customer’s best friend, it’s also the laborer’s best friend. Not only will competition improve a product or service and lower its price, but it will also raise the wages of skilled laborers and improve their working conditions. Capitalists do this without any aid from the government; it’s a natural byproduct of doing business.
Even though capitalists are quite adept at raising wages and the standard of living, it hasn’t stopped governments from trying to outdo the greedy capitalist. Instead of putting the customer first, governments tend to put a few chosen capitalists first (corporatism) or the worker first (socialism).
Governments are greedy and self-serving just like the capitalist. The government official, after piecing together a spending program from your taxes might very honestly say, “Look what I’m doing for you! Please vote for me and I’ll continue to do the same. That is, I’ll take a significant portion of your money and spend it in a way that will get me a majority of votes. I’ll also pass laws that keep the market from optimizing, but that’s okay because you believe these laws benefit you and that the alternative spells disaster.”
As you can tell, yes, the government official cares about us, but only to the extent that he gets our vote. In a society where free markets are cherished, the way government officials would convince you he’s the best person for the job might be to say something like, “Vote for me and I’ll get out of the way so competition can move in. I won’t enact expensive spending programs because I won’t take your money from you. I’m basically leaving it up to you guys to create a better society – self-determination and what not. Good luck with that and remember, vote for me and I won’t do a thing.”
As it is today, the masses still believe only a select group of individuals can solve society’s problems. This is reflected in each election cycle, where if only Politician X is elected, good things will follow. If only more people from Party A were voted in, they believe, the country would be set on a path towards progress.
I agree with the sentiment that society’s problems can only be solved by a select group of individuals. However, I don’t believe this select group of people is composed of well-meaning politicians, but rather greedy capitalists. Both are self-serving, but while the politician cares only about your vote, the capitalist cares about your actual needs and wants. Furthermore, a politician only has to care towards the end of the election cycle, whereas a capitalist has to care at every moment a business transaction takes place. Ask yourself this question: in a world of greedy self-serving individuals, is society better off with more politicians or are we better off with more competing capitalists?
A free market’s fruits in a particular sector of the economy produce the optimal situation where product innovation increases dramatically, wages increase proportionally, and prices lower substantially. After time, the price, product and wages in a particular sector will plateau and entrepreneurs will look elsewhere for unexploited vistas where the cycle of better products, lower prices, and higher wages begin anew.
So yes, a capitalist only cares about himself, but by extension he must care for the customer – lots of them, or someone else will. Part of that customer care is hiring the right people, and to attract them, he must care about their needs too or some other employer will.
If you want the capitalist to care about the people, if you want the capitalist to pay his employees higher wages, I have one piece of advice – compete with him.
This article was first posted on http://www.lewrockwell.com/ and more from this author can be found at http://www.lewrockwell.com/steinberg/steinberg-arch.html