The Value We Place
The Value We Place
While I was in college, the Berlin wall fell and the Soviet Union dissolved. As a child of the Cold War, these were heady times. It was incredibly satisfying to experience the triumph of democratic capitalism over communism.
Lately it seems that some are reconsidering this conclusion. Watching the rise of China, they are thinking that its mashup of capitalism and authoritarianism may be a winning strategy.
They would be wrong.
It is true that elements of the stinging critique of capitalism by Karl Marx are still applicable today. It contributes to wealth inequality, prioritizes short-term gains, and leads to the exploitation of workers. In that context, Marx’s slogan of “from each according to his ability, to each according to his needs” sounds like a vision for a more just economy.
But as many critics discover, identifying problems is easier than solving them. Communism will never work as envisioned. Its fundamental tenets are inherently flawed.
Consider the slogan. It requires a judgment. When we think of leading a youth sports team, one could apply it, pushing players to do their best while providing the support that each one individually needed. This approach, however, does not scale well. When a group is small enough that everyone is at least somewhat familiar with each other’s strengths and needs, concerns about fairness are reduced and cooperative efforts are more likely to be sustained. Beyond that, the only way to coordinate actions is through central planning and enforcement. At the level of a nation, it leads to oversized bureaucracies and inefficient planning at best, totalitarian states at worst.
Then there is the loss of individual liberty in the necessary compliance with a state-directed economy. Aristotle would have recognized this weakness. In his Politics, he wrote about the natural human need for family and private property. When individuals have a personal interest in something, they invest greater care in it. Aristotle saw it as a prerequisite for virtue, believing that a system of common property hindered the development of benevolence and generosity.
Adam Smith, in The Wealth of Nations, shared a similar optimism about how individuals pursuing their own needs could result in the greater good for all. Published in the same year that the Declaration of Independence was signed, his work is famous for the metaphor of the “invisible hand” of free market forces arising from the independent judgments of multitudes acting in their own self-interest. Smith described a pin factory where there were eighteen separate tasks. By dividing the labor and allowing the development of individual expertise, workers were able to increase their total output by a factor of 240. That was in the mid-eighteenth century. One can only imagine what that multiplier would be today.
Capitalism is a collective effort driven by individual independence, capturing the wisdom and energy of the masses. In a free economy, people seek out the most efficient way to produce a good or service, cooperating with others when it makes them more competitive in the market. It is this unleashing of incentive that permitted the rise of China, but Communist Party limits on personal freedom will always curb the country’s true potential.
The value that we, the people, place is the primary driver of our economy. It is, however, about more than property, goods, and services. Democracy, capitalism, and the Platonic ideals of truth, courage, and justice are the strands of our shared social fabric. As we celebrate 250 years of the American experiment, let us recommit to the common values that unite us.
Kevin Beardmore, Ed.D., is President of Southeast New Mexico College. He may be reached at kbeardmore@senmc.edu or 575.234.9211