America, Capitalism, and the Difference Between Intentions and Results

Intentions Vs. Results

In most things, results matter far more than intentions. I tutor kids, and if I can’t help them understand the material and get better grades, I won’t be kept as their tutor for very long. Even if it’s not my fault and the kid is just unreachable and I won’t be replaced by anyone, there is still no use in keeping me on if nothing results from it. That is true for most any job. The one exception to this rule, of course, is also the most important judgment we have: It is judgment before God. But this isn’t that.

Before God, where are hearts were when we acted are far more important than the actual deeds. As religious and pious as the Pharisees were, Jesus could only lament their hearts, quoting what God said centuries before about His people, the Israelites: “These people honor me with their lips, but their hearts are far from me” (Matthew 15:8; cf. Isaiah 29:23). Jesus condemned those who would be His killers (Matthew 21:33-46; 26:24), and yet by them doing so, we were saved. They were condemned for sin, because they did not intend for good, but for evil, and so it was held against them. God killed Jesus to save us, but they murdered who they knew to be, at the very least, an innocent man, out of malice and wickedness.

Capitalism, Economic Philosophy, and America

With the upcoming presidential election here in the US, economic issues have been central (which makes sense, given the economic collapse and snails-paced recovery since). The last 4 1/2 years have been pretty awful from an economic standpoint. Tens of millions of people out of work or woefully underemployed (like myself). Many have just given up on searching (which keeps the official unemployment rate artificially low). Being a somewhat recent college graduate myself, I’m well in the thick of things. America has had serious economic downturns, but not since the great depression have they lasted this long. The middle class is dying. Beyond that, we have the long-term problem of the national debt, which has increased by more than 50% in the last 4 years (and is more than twice what is was 10 years ago, a time when it was still sustainable). At over $16 Trillion, it is greater than the GDP of any country on earth (including our own), and with enormous projected increases in Social Security and Medicare costs, there is no end in sight.

So economic issues are important.

Because they are so central to this election, and have been pretty central to most Americans the last 5 years or so, a lot of -isms get thrown around. Most notable of these-isms is “capitalism,” because America is a capitalist country (actually, it’s really more of what economists call a “mixed economy,” but that really just means “capitalism with some government involvement, or what i call, capitalism…

Websters defines capitalism as: “an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market” (“Capitalism”). In other words, people own things, buy and sell things and so forth, freely, and ultimately, for their benefit.

Too Often, Intentions and Results Get Confused

For our purposes here, I’ll just let it be assumed that capitalist countries are more prosperous than those where the government has tight controls on the economy. I think history (i.e. the last few centuries) speaks for itself.

Why then is capitalism seen as such a nasty thing? The answer is two-fold. First, without controls and safeguards for not only the poor but pretty much everyone but those at the top, it can turn into what we saw during the industrial revolution (unnecessarily dangerous conditions, pitiful wages, zero job security, regular emotional abuse). Secondly, and more fundamentally, the whole system is based on people acting on their own self-interest.
The second point is often overlooked by those proponents of the system who advocate for fewer and fewer controls on it. I’ve even heard it said that small business owners are heroes because they are the backbone of the economy. After all, most new jobs come from small businesses, and that benefits everyone. But let’s get one thing clear: when someone starts up a business, or when a business hires more people, it’s not because they have morally upright intentions. They do it for their own purposes. That doesn’t make it wrong; we all have self-interest that we serve, including when we work for said businesses in order to make money for ourselves. We don’t do it primarily to help others, but rather, ourselves. But that sure doesn’t make business and business owners and job creators heroes or in anyway good or righteous. To say that would be confusing the intention with the result. The intention is to help themselves (which is amoral, neither sin nor righteousness). The result is positive, but it’s incidental. When it comes down to it, all but a few extremely civil-minded individuals hire new people only when it benefits them, not in order to benefit anyone else. The fact that others are benefited is just a nice side bonus.

On the other side, we have those who advocate increased government control not because of the actual benefit (and there very much is a place for government), but because of “fairness” and “being your brother’s keeper” because it’s wrong to just work to benefit yourself. In essence, they want to force good intentions, to force sacrifice for other people etc. The problem is, when that happens, as history shows over and over, people don’t actually benefit. Why? Because you can’t really change other people’s intentions. You can’t change human nature, or reasonably expect people who do not have the righteousness of God in their hearts to have the same desire to help others. People will do what benefits them. The only thing that changes is what that thing is. That’s why, for example, above a certain point, increasing taxes, reduces government revenue because it’s not worth the effort to make the next dollar. The ones behind the tax increases want that money to spend on welfare and paying down the debt and other noble purposes (and some not so noble purposes too, of course) But the businesses are in it for themselves, so they aren’t going to work just as hard and make just as much money, thinking, “boy, more of my money is going to help others” (to whatever extent those tax dollars are even doing that). Thus, businesses produce less, hire less, do less, so even though a higher percentage of their income is taxed, they are making far less income to tax. Their hiring less also means fewer people have jobs, and therefore, they have less (or no) income to be taxed. That means less money to spend on welfare and protecting those who fall through the cracks of the capitalist system. It also means less money for the would-be workers to give to charity (also helping others), and less money to spend on other things which means other business suffer which means they hire less and then it just goes on and on until something stops it (or until the economy collapses completely). That ultimately benefits no one.

Using People’s Self Interest To Benefit Society

The reason capitalism has worked is because when businesses do things to serve their interests (hiring, investing, doing business), it incidentally benefits others. And capitalism fosters this a lot better because when a person has control over their own business and over their own profits, they have incentive to be successful. Some jobs (doctor, teacher, firefighter) have meaning and give satisfaction beyond a paycheck. However, that’s hardly the norm. Consider the investment banker. Why would anyone want to work 60-80+ ulcer-inducing hours per week as an investment banker when they could work at that same office as a secretary with a lot less stress and time to actually enjoy life? Because of the money! When people can make more by working harder and taking more risks, they have a reason to try to be successful. The more successful they are, the more incidental benefits to society there are. This idea is nothing new; it goes back to Adam Smith probably long before him. Basically, America has been prosperous because we have let people do their own thing, and reaped the benefits from it. That’s capitalism in a nutshell: we all work to benefit ourselves, not society, and society ultimately benefits.

Government Regulation Is Needed To Compensate For Where The Market Fails

Most of the time, people serving their own interests has the side benefits to society. But we know that is not always the case. That is why the government has a role in keeping everything in check. The government is needed for areas where the market and people’s self-interest would in fact harm others. History shows that the market does not always force businesses to sell products that are safe or even functional. So, we pass laws and standards, and set penalties for not following them (jail time, fines, the ability of customers to sue). Thus, whereas before they would be benefited by doing wrong, it is not the case anymore. The market hardly encouraged safe work conditions during the industrial revolution; it costs a lot more in both money and lost productivity to have a system of safe work practices, and people were willing to work either way, so many factories had no reason to make things better. So, we pass laws requiring safety standards and make businesses liable if their workers get hurt on the job. Even John Stossel admits that the EPA (until recently) has been of huge benefit to America because the market doesn’t give businesses reasons to control their pollution. Population has greatly increased in the last 40 years, but ask anyone form the generations before mine, and they’ll tell you that our environment has never been cleaner.

Some might say that the government has a role even beyond that. Giving tax credits for hiring can encourage expansion, meaning more incidental benefits for he rest of us. The cost of funding NASA has been astronomical (pardon the pun), but enormous strides in technological advancement well beyond space travel have resulted (one word: satellites). Along those lines, although I am vehementally opposed to re-electing Barack Obama, in part because of all the regulations he and his administration have put on fossil fuels (leading to record high energy prices), I actually support his desire for the government to aid research in renewable energy. This is because there is no market reason to care. Right now, renewable energy like solar and wind are unreliable and are far more expensive than using fossil fuels. There is no profit to be made in investing in them and in investing in new technology. But it won’t always be this way. Non-renewable energy like oil and natural gas are…non-renewable, so when they are gone, they are gone. As we have less and less, prices will increase drastically. The perpetual powder-keg that is the Middle East is also where much of the world’s oil is, and that certainly doesn’t help. And these price spikes and wars and instability happen a lot quicker than scientific advancement. It will benefit society in the long run if when these things happen, our renewable energy technology is 10 or 20 years further along than it otherwise would have been. Never mind that wind and solar and things like that are far better for the environment anyway (even though like 0.00001% of the bird population gets killed every year in the windmills).

What Can Be Learned

We mustn’t don’t confuse intention with effect. Capitalism has a positive effect, but it is an ammoral system. It’s good for us to use it because of the effect. That does not mean that businesses and wealth are morally good because they hire people and stimulate the economy. They are serving their self-interest, same as any of us in most things we do. Their intention is amoral; the good comes from us working with their self interest in order to better society as a whole. Therefore, we should not call them virtuous. at the same time, we must not condemn them or try to punish their success. Everyone has a right to self-interest, and so long as there are reasonable controls in place, their self-interest is our self interest, so harming them only harms ourselves ultimately.

Remember these things when you hear the talking heads discuss the virtues of capitalism, or the importance of hurting the rich for fairness.

Works Cited

“Capitalism.” Merriam-Webster. N.p., n.d. Web 15 Oct. 2012. .

New American Standard Bible (NASB). N.p.: Lockman Foundation, 1995.    Biblegateway.com.    Web. 6 Jun. 2011.     .

Stossel, John. “‘John Stossel: Thank God we Had an EPA’ [VIDEO].” The Daily Caller. N.p., n.d. Web. 10 Oct. 2012. .

(Originally published 10/16/2012: http://3-ringbinder.blogspot.com/2012/10/america-capitalism-and-difference.html  Immaterial changes have been made).

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