Horticulture Capitalism: a path out of despair

I recently finished reading “How to Be an Anticapitalist in the Twenty-First Century” by the late Olin Wright. His premise is that capitalism is an inherently “rapacious system”, which must be dismantled, smashed, or otherwise eroded.

Afterwards, I thought of Churchill’s old quote about democracy.

No one pretends that democracy is perfect or all-wise. Indeed it has been said that democracy is the worst form of Government except for all those other forms that have been tried from time to time.…’

American democracy has some flaws. Yet in the face of these flaws, a vast majority of Americans propose pragmatic reforms: tweaks to the rules of the game, to address the current game’s shortcomings.

87% of Americans fundamentally embrace democracy, leaving, leaving only 13% who believe in illiberal alternatives. [1] By and large, we are committed to maintaining the American Republic.

American capitalism also has flaws. But by contrast to the situation with flawed democracy, there’s a groundswell of Americans who fundamentally view capitalism negatively. Fully 1/3 of Americans have a negative view of Capitalism. [2]

To me this is an inconsistency. I’d like to see more Americans approach capitalism’s flaws with the same pragmatism that they do democracy’s.

More on the inconsistency

Both systems work well in theory. In practice, they both become corrupted. They’re like gardens that need to be tended to: the rules amended periodically when the systems begin to exhibit pathologies. 

This is the perennial cycle of any complex system. Unintended consequences will appear. The rule-makers will need to vigilantly assess the emergent behavior: identifying pathologies as they develop and tweaking the rules of the game accordingly, to stem those pathologies before they run amok. Like a gardener, pruning the plants, pulling the weeds, shooing away the pests, and planting new seeds.

Studies show: heavy-handed analogies stick with readers! [3]

Admittedly, we’ve done a shit job of “tending the garden” of American capitalism.

And perhaps that’s the issue: these ills have made Americans have lose sight of capitalism’s benefits — markets efficiently allocating resources — giving people the things that they want in the most economical way.

Even though I strongly disagree — I can empathize.

Capitalism today is fucked. Information incompleteness abounds. Natural monopolies operate unregulated. And negative externalities spew unchecked — from C02 into our atmosphere, to social media posts and push notifications.

These pathologies are abundantly clear. And once you see them, you become increasingly filled with despair that our economic system seems incapable of addressing them. [4]

But this misses two crucial points.

1. The current ills are the fault of the rule-makers — not the fault of the game. Americans seem to understand this point in regards to democracy but not to capitalism.

2. There’s so, so much about our market system that we take for granted.

What the hell is water?

Capitalism can be a miraculous force for moral good. Even in America’s brand of myopic, crony capitalism, many of its vehement critics are like the anti-Obamacare protestors vying, “Keep govt’s hands off my Medicaid”.

The value — the moral goodness — that the market provides is staggering. So pervasive that it’s hard to conceive of all of the conveniences, freedoms, and affordances that the market provides — even to the worst off among us. [7] And it’s so easy for we humans to take what we have for granted.

It reminds me of the fish asking, “what the hell is water?” [8]

There are these two young fish swimming along and they happen to meet an older fish swimming the other way, who nods at them and says “Morning, boys. How’s the water?” And the two young fish swim on for a bit, and then eventually one of them looks over at the other and goes “What the hell is water?”

Capitalism’s benefits are so pervasive it’s basically impossible to conceive of a world without it — much less, to make an informed comparison with respect to another hypothetical system.

Crony capitalism is not the only capitalism

Why do I care enough to say all this? Because I am deeply concerned with the growing perception among my peers that markets are fundamentally rapacious at worst and a necessary evil at best.

I believe that properly regulated market economies provide the surest path out of despair — from scarcity and human suffering, towards abundance and human flourishing.

What I want for these peers is to take the same pragmatic approach to the market that they do to democracy — pruning, planting, and weeding — like the gardener. If properly tended, a beautiful thing will grow.

Appendix

[1] 87% of Americans embrace democracy. https://www.voterstudygroup.org/publication/democracy-maybe

[2] Fully 1/3 of Americans have a negative view of Capitalism.

[3] citation needed, plz help

[4] more on capitalism’s current problems (to convince you that we’re living on the same planet):

  • Humans are quite clearly not the rational agents with well-behaved Cobb-Douglas preferences that we model them to be — and which models serve as the foundation for a theory of economics as a moral force in the world. We’re subject to pernicious heuristic biases. As such, basic concepts from revealed preference to expected utility theory need to be re-examined — perhaps even re-built from scratch with our modern understanding of human fallibility. [5]
  • The market is failing to price carbon, and cruising full steam towards runaway greenhouse effects and potentially civilization-threatening climate change.
  • The market is failing to price our attention => FB/Twitter/etc
  • Tech monopolies are being allowed to continue operating unchecked.
  • Health care costs are insanely high — and are projected to increase yet another 50% over the next 8 years. [6]
  • Prison system monetizes poor minority youth.
  • California’s natural monopoly, PG&E, is in bankruptcy.
  • The wealth distribution has created such an excess demand for investment assets, that we’re seeing asset bubbles that are at once absurd and structurally sound (robust excess demand bidding up prices).

[5] See “The Righteous Mind” and “Thinking Fast and Slow” for the fleshed out pop-psych treatment of these arguments.

[6] https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2020.00094

[7] https://www.census.gov/data/tables/time-series/demo/income-poverty/historical-poverty-people.html

[8] https://fs.blog/2012/04/david-foster-wallace-this-is-water/

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