Capitalism, Freedom, Morality, Entrepreneurship....

So far in this blog, which is my vehicle for putting down my thoughts for future book, I have touched on a few of the topics that will form part of the book; self-help, fitness, philosophy, which will all be elaborated on in future posts and of course, in the book.

Today, I would like to touch on politics and economics, or more specifically, how people should treat each other in society.

I am an avid proponent of capitalism, in fact, what is termed laissez-faire capitalism, which doesn't actually exist today, as countries that are referred to as capitalist systems, are more accurately mixed systems at best, as true capitalism means little if any government intervention in the private marketplace (other than providing rule of law to prevent fraud and violence, a critical component)while socialism, communism, theocracies or other dictatorships represent government run, or outright government owned economies.

Interestingly, capitalism is controversial and seems to have been from the outset, however one thing that everyone agrees on is freedom. As I mentioned in a previous post on exercise, there is a lot of confusion in that field, and there is at least as much confusion when it comes to capitalism.

The thing is, for me, capitalism and freedom are synonyms. Whenever someone criticizes capitalism, they are criticizing freedom per se, although they would loudly deny this. However, they can't have their cake and eat it too. Anything short of FREE enterprise means some government control of private citizen's activities, and that very simply means less freedom, period.

The very concept of individual rights, is so self-evident that I would challenge any opponents of it, to go spend a year living in a dictatorship and tell me how they feel when they get back (if they are allowed back, or lucky enough to escape).

As self-evident as it is, individual freedom, is a very recent development in human history. For the majority of man's history, he has been at the mercy of rulers, whether it has been kings, popes, or some other dictator, and the ruling has been done by force. People were always treated like beasts of burden under these systems, where they were forced to produce for the benefits of their rulers, and left enough of the crumbs to barely survive. (and to hopefully discourage overthrowing the rulers)

This has led to a series of uprisings against tyrannies, but unfortunately without the concept of individual freedom, the uprisings only seek to establish more "benevolent" dictatorships, (at least that is what the masses are told to support the uprising) but as Shakespeare has said, "power corrupts" and even the best intentions (giving huge benefits of doubt here) eventually just wind up being the next tyranny. ("Meet the new boss.... same as the old boss..." Pete Townshend)

Ruling men by force can in fact produce quite a lot, as, when threatened with their lives, people will do quite a lot to survive, however, it has one critical limitation: what you cannot FORCE people to do, is to be CREATIVE!

The introduction of individual freedoms, which started with the philosophical ideas of the Renaissance, led to a form of government, that is servant of the people and not the other way around, and includes a rule of law established not only to protect citizens from violent acts or fraud from other citizens, but as importantly, to protect citizens from abuses from their own government. Individual rights such as freedom of speech and choice of religion are often defended, but to me, the most under rated of these is simply property rights, where a person has the freedom to actually keep the fruits of their labor which are rightfully theirs. (the alternative would be slavery)

With this, the motivation to be CREATIVE began to exist, and the incredible power of the human mind and its creativity was unleashed, and the rate of progress in all fields accelerated exponentially, after several centuries of virtual stagnation during what is referred to as the dark ages.

And yet, despite the unprecedented progress and improvement in human quality of life it produced, capitalism, and freedom by extension, remain controversial. What is the moral foundation for opponents of this?

Well, here is my take on it: Capitalism is based on the premise that people are fundamentally good. Government controls are based on the premise that people are morally flawed and as such, need to be controlled.

This may sound simplistic but if you take time to think about it, no other explanation makes any sense to justify one person or group of people taking away the freedom of another person or group of people.

Now, first of all, let me clarify that when I say that people are fundamentally good, I don't mean that every single person is beyond reproach. There are of course many people who, unfortunately perform immoral acts, (a future post can explain, why in many cases, this is due to a lack of a proper philosophy where people are confused as to what is actually in their best interests) and let's face it, acts such as holocausts and other atrocities make it difficult to argue against the existence of pure unadulterated evil. However, the fundamental nature of an apple is to be sweet, juicy and nutritious, and no matter how many rotten apples may be out there (rotted by an improper philosophy?), it does not change the fundamental nature of an apple!

Secondly, for freedom to work, there must be a proper rule of law. While some will say this is a contradiction, it is not any such thing, in fact. Freedom for one means freedom for all, so our freedom does not allow us to infringe on anyone else's freedom, and (again with a proper philosophy), there can exist no true conflict between rational people. However the rule of law need not be complex or very encompassing. It need simply protect people from the initiation of force or fraud that will limit their freedoms. The proper role of government is to provide this protection, and a proper government has checks and balances to protect its citizens from any of its own potential abuses.

Now, to the idea that people do need to be controlled because they are morally flawed... it is very easy to defeat this argument even if I were to accept that people are morally flawed (which I certainly don't!).

Who is to do the controlling of these morally flawed people? Other morally flawed people?!!! If we accept that people are flawed, then where are we supposed to find the "better" (??) people who are qualified to do the controlling?

I am simply touching the surface on these concepts, and for a fuller explanation, I refer you to "The Capitalist Manifesto" by Andrew Bernstein, or "Capitalism, The Unknown Ideal" by Ayn Rand (in fact, any of the works by either of these authors, which you can find in links to the left)

Finally, I would like to present the concept that entrepreneurs or businesspeople are the heroes of a proper society. I must first give credit of course, to scientists who are the creative minds who make new technologies possible, and I will suggest they are also entrepreneurs but may not think of themselves that way.

Entrepreneurs are the risk takers who stake everything to develop an idea in pursuit of their passion for the rewards available to them under a proper system. (and while money is one of those rewards, as it should be, for many entrepreneurs it is their passion for creativity and a sense of accomplishment that are their greatest rewards) When people point out crooked businesspeople as a criticizim of capitalism, they are making a huge mistake of reasoning.... a crooked businessperson is not practicing capitalism, he is simply practicing immorality.... the concept of business is based on the concept of free trade between willing participants, pure and simple. Anyone choosing to act in a deceitful manner is guilty of fraud or force, both of which need to be outlawed (and those laws enforced) in order for a free society to function.

As a trader, I make you an offer, you either accept or you don't, after negociating, and we move on, either agreeing to a transaction, or agreeing to disagree and go seek another potential prospect....

The market dictates the value of my offering. If no one is willing to exchange the value I am asking in exchange for what I am offering, I must lower what I am asking, because by definition, my offering is only worth as much as someone is willing to pay for it.

However, I would like to add also that while we all recognize self-employed individuals as entrepreneurs, we must realize that employees are not slaves of their employers. They offer a value, their skills, and willingness to work, in exchange for a value, the wage and/or other employee benefits offered by the potential employer.

As such the employee and employer are also traders. An employer who seeks to abuse his employees by underpaying them, will simply end up with the poorest quality employee as his competitor willing to pay more for better quality will take from him his best people, thus producing a superior product and likely putting him out of business. Remember, there truly is no conflict between rational men.

This post is, like my initial posts on other topics, simply meant as an introduction of a topic that will be included and elaborated on further, in future posts and in the book.

My passion for this topic comes from working in financial services managing financial advisors who are self-employed and earn their livelihood by using their work ethic, ingenuity and people skills, to help their clients achieve financial security, (providing a tremendous value) and in exchange for this earning unlimited income potential, personal growth and the satisfaction of helping other people to achive their goals (receiving a tremendous value!)

Working with these folks, over the last 20+ years has continuously reinforced my conviction that entrepreneurs are the heroes, the Atlases, if you will, that hold up society on their shoulders, and it has been a privilege to be associated both with them as colleagues and with many of their clients who are also entrepreneurial.

Even the clients that they have who are not business owners, share a critical quality which is the ability to be long term planners and thinkers. By definition, the more a person uses his intelligence, the more he separates himself from the animal whose perception is extremely short range, and as such accomplishes the long term goals that cumulatively form the progress of the human race.

Look forward to all comments!