For any system to remain in place, it must be challenged from time to time from within and outside of its realm. That goes for great nations, sports teams, and economic concepts. So, this is that moment in time when capitalism once again is being attacked in part to a greater attack on the preeminence of America. Part of this is natural, seeking new and better ways that open doors to failed ideas of the past, having another chance to prevail.
It’s capitalism versus socialism and it’s the real underlining focus of the 2016 run for the White House.
With the recent spate of global recessions, massive bailouts, and government stimulus, people are wondering if it’s time to take control of the economy from the private sector to mitigate reckless risk-taking and the unfair distribution of wealth. Of course, anyone that thinks any government is so disciplined that it would watch or care about the bottom line has not been paying attention. In fact, the use of funds and freebies to purchase votes and to retain power is the most destructive financial time- bomb strapped to the planet, especially America.
Governments around the world have run up public debt to $60.9 trillion and counting. In America, our public debt exceeds the annual gross domestic product (GDP), which amounts to $154,590 per taxpayer. The next largest economies are not in any better shape (Japan is actually worse off).
Pope Francis & Capitalism
Still, the attack on capitalism and its uneven distribution of wealth isn’t going away. It will not be diminished because governments are poor stewards of wealth and poor managers of risk. Some of the strongest voices of influence around the planet have made it clear that they have little faith in the role of capitalism. On Thursday, Pope Francis brings his message to New York City – the financial capital of the world.
The Pontiff hasn’t made it a secret that he thinks capitalism has a lot of flaws. His views are not new as he authored “Dialogues between John Paul II and Fidel Castro” ten years ago with these scathing observations about capitalism:
“…spirit that capitalism has encouraged utilizing capital to subject and oppress the man.”
“…develops with characteristics of individuality in a life where man look for their own good and not the common good.”
However, it is disappointing when capitalism is sold short after all the great things that have happened to mankind since the dawn of the industrial age and modern capitalism. Even today, capitalism continues to lift people out of poverty; most recently, women in Bangladesh are making tens of dollars a month in the burgeoning textile industry that once had existed where they never earned a penny or the respect that comes with spending power.
In America, we celebrate individualism because it’s the building block of the collective. Consider your basic math equation for why we should celebrate and encourage individual greatness and the rewards that come with it.
When a group average is 50, adding in a single 100 lifts it higher. Add in more single 100s over and over, you not only numerically lift the average, but also in real-life, you lift the people at and below the average.
I think the Pope conflates egoism and egotism. The former is all about the individual, but not at the expense of everyone else. The egoist will work to make his or her life better through a kind of determination that could never be matched when the yield from such effort could be shared among the masses. Why go through the pain, sacrifice, and hurdles?
I understand that we should all have a degree of humility, but it doesn’t mean that we should achieve less than our potential or be ashamed when we exceed expectations.
As for what we do with our prosperity or what each person should consider excess of their own needs has to remain with the individual, not religious organizations, and certainly not with governments. This is a different issue as there are wealthy people in socialism, communism, and monarchies nations, although it’s a much smaller pool and it does not generate from the trade of services and goods and risk-takers (unless you consider coups and birthrights).
This is a recent tweet from Pope Francis:
@Pontifex “inequality is the root of all evil”
There is a lot of truth in his tweet when we talk about the inequality of opportunity. Capitalism is the only system in the world where the have-nots can find ways to create or acquire the opportunities of the haves. Everything else promises equality of outcomes; those outcomes could be anything but great, so we are talking shared misery at best.
Pontifex means ‘greatest bridge-builder’ and to be sure, this Pope is a ‘rock star,’ but I wish he would see that the greatest wealth-builder should be embraced and sold around the world…not scorned.
Big Corporations, Capitalism Worst Actors
Of course, Pope Francis timing on capitalism could not have come at a better time. The drug price-gouging, peanuts with salmonella, and the Volkswagen scandal make for great fodder in calls for a major tweak or perhaps a different system entirely.
Then, there’s Total (TOT), the French oil giant that followed in the footsteps of major oil companies around the world to announce project cuts in order to preserve its quarterly dividend payout. Capital expenditures, which peaked at $28 billion in 2013, will be cut back this year, and going forward.
- 2015 $24 billion
- 2016 $21 billion
- 2017 $19 billion
This will generate $60 billion in cash flow to pay the dividend through that time frame. It’s obvious that cap ex reductions means worker reductions. Should shareholders come before workers; is that fair? There’s a major movement with major players saying the answer is “no.”
Moreover, I think shareholders should be rewarded for the risks they take. However, understand that this will not sell on Main Street, unless there’s a great and very successful pillar of business explaining how and why it works this way.
Join the conversation as a VIP Member