Why Capitalism is Compassionate and Focused on Others
by Phil Love, Pactola President/CEO
CAP Senior Partner
6/5/2019

Now, there is a title that some readers may disagree with. Some will suggest how unfair it is that some have more than others. We see that with polls that show how 40+ percent of young American adults prefer a socialist economic system. They have been taught to believe that a system of redistributed wealth is more compassionate than the evils of capitalism. 

One popular description of capitalism is that it is rife with selfishness and greed. No one shares anything. They will say the trickle-down economy does not trickle. Nobody gives away anything and capitalism is mean-spirited and uncaring. It is easy to take the common voices at face value, but we must ask ourselves, is capitalism inherently selfish?

Andy Puzder, the CEO for Carl’s Jr and Hardees Restaurants for more than 16 years and a brilliant lawyer wrote a book in 2011 titled Job Creation:  How it Really Works and How the Government Doesn’t Understand It. His latest book in April 2018 is titled The Capitalist Comeback.  He had a piece on Fox News a couple of weeks ago where he stated, “Our booming economy can still overcome progressive misinformation, propaganda, and myth.”

Puzder has a thought-provoking summary of the true focus of capitalism when he says, “In a capitalistic economy, the only way you can improve your life is by satisfying the needs of others. That is by providing products and services that other people want at a price they can afford.” When you think about it, this is true. The only way you can succeed is if you change the focus from yourself to an outward focus on others. You are forced to discover what the needs and wants are of others and then try to meet those with skills, talents, and items you have at an affordable price.

I think this analysis is right on the money. Capitalism also empowers the “little man,” the consumers, as businesses vie for their attention. This competition allows for many variations in quality and price, resulting in the best service or product at a price that people will pay. “In a form of economic democracy, consumers vote with each dollar they spend, determining which businesses succeed and which will fail. Henry Ford built cars for commoners, not for the nobility. Steve Jobs created the iPhones for all of us, not government elites. This is because the success of each business is determined by how well that business meets the needs of the masses—consumers.” 

Consider the production side. Capitalism allows people to use their own time, talents, and treasure to develop skills and products as they see fit for the market. There is no one centralized bureaucracy telling people what career they must pursue, what product they must produce, and where this must be completed. People are free to develop these skills and products based upon their own free will and creativity. They are not pigeon-holed into a certain career at a specified location as a worker in a total command-and-control economy may be. 

Puzder paints an accurate picture of socialism that is different from what some in popular culture think today. Socialism is the exact opposite of capitalism in its focus. Instead of focusing on others and the market, in socialism you focus on yourself and your own needs. 

You succeed in socialism by getting more for yourself than others get from the limited amount of goods and services provided by the government. People standing in a breadline in a socialist country are focused on getting enough to meet their need. If you are lucky, you may be able to rise above the worker class and become part of the bureaucratic elite in a socialist society. This drive is focused solely on self. There is a same drive to succeed in capitalism, but there must be consideration given to the market and to others. 

This focus on others has provided the highest standard of living that has ever been known to man. The capitalist model stands in strong contrast when one considers things we take for granted here compared to those which are not available in purely socialist countries. North Korea does not have electricity available throughout the country. In Cuba, most of the vehicles and appliances are like ones available in the U.S. sixty years ago. In Venezuela, one of the richest countries in resources, food is very scarce.

Even though capitalism is outward focused, it is not equal in outcome, which nothing in life is. But it offers the best focus on being better outside of ourselves. I am reminded of a quote from Winston Churchill. “The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.” When all you have around you is misery, it becomes very easy to focus inwardly.

 

Pactola is a CUAD CAP Senior Partner and a subsidiary of Midwest Business Solutions. We are a Credit Union Service Organization that is dedicated to commercial and agricultural lending and serving multiple credit unions and banks throughout the United States with our services. We help our partners increase their earning assets and profitability. By doing so, we help them become a relevant financial force in their community increasing social good through helping businesses and farmers. Visit our website to learn more. You can contact Phil Love, Pactola CEO at phil.love@pactola.com or 605.223.5154.

 

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