Greed, Over-consumption Not Products of Capitalism

shopping bag boutiqueRecently, a respected colleague noted that the “capitalistic goal of accumulation, consumption, and collecting” is responsible for a collective mindset in Americans that “I consume, therefore I am” and “more is better.” He passionately feels the “more is better capitalistic mentality” assures a predictable future of dwindling resources. He is not alone in his views.

Certainly, identifying our self-worth by what we accumulate or spend does not produce emotional, physical, or financial well-being. Those who embrace a money script of “I consume, therefore I am” are likely to eventually encounter financial and emotional pain. Either they will run out of money to spend, lack products to buy, or discover the futility of trying to use money and possessions as a substitute for genuine self-worth.

What I found curious was my colleague’s attribution of the money script “more is better” as the product of capitalism. That money script has been around a lot longer than capitalism, which according to Investopedia originated during the Middle Ages when a variety of factors, including a labor shortage caused by the Black Plague, caused the collapse of the manorial system. More is better” was part of the human condition much earlier. For example, in the Hebrew Scriptures, Ecclesiastes 5:10 says, “Whoever loves money never has money enough; whoever loves wealth is never satisfied with his income.”

Greed, whether for money or food or anything else, is not produced by an economic model. Whether people live under a capitalistic, socialistic, or communist system—or in a Stone Age tribal group—greed is alive and well in all of them. Every human being experiences it in some way and on some level. It has been considered one of the seven deadly sins since the early days of the Christian church.

“Capitalism” is defined by Merriam-Webster 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.” There is nothing in that definition about greed or any goals of “accumulation, consumption, and collecting.”

Core to capitalism is a method of distributing limited resources in the most efficient manner possible, where the dynamics of the free market and competition drive down prices and improve quality. I find no other economic system that delivers this outcome. In fact, systems controlled by central planning have a track record of producing the opposite: economies where shortages prevail and those in charge prosper on the backs of the masses.

Research shows capitalism has lifted more people out of poverty than any other economic system. Since 1945 the number of those living below the poverty line has decreased 57%, from 35% to 15%, while income inequality has risen just 15%. Any American earning over $30,600 is in the top 1% of income earners globally. Even the bottom 1% of Americans are in the top 33% of income earners globally.

Certainly there are business owners and wealthy people who are greedy, selfish, and materialistic, because such people are found in every walk of life. These traits are not tied to any particular economic system. They are signs of people who are trying to satisfy spiritual and emotional needs with material things that can never meet those needs.

Because one of the qualities that helps people create financial security is frugality, I actually agree with my colleague that excess consumption is often destructive and can be a genuine problem. Blaming it on capitalism, however, does nothing to offer any real solutions.

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4 Responses to Greed, Over-consumption Not Products of Capitalism

  1. Richard B Wagner March 21, 2016 at 9:35 am #

    An excellent blog. I look forward to watching you build upon it,

  2. Jane Beule March 21, 2016 at 9:40 am #

    I agree. In his famous book “The Protestant Ethic and the Spirit of Capitalism” Max Weber wrote:

    “The impulse to acquisition, pursuit of gain, of money, of the greatest possible amount of money, has in itself nothing to do with capitalism. This impulse exists and has existed among waiters, physicians, coachmen, artists, prostitutes, dishonest officials, soldiers, nobles, crusaders, gamblers, and beggars. One may say that it has been common to all sorts of conditions of men at all times and in all countries of the earth, wherever the objective possibility of it is or has been given. It should be taught in the kindergarten of cultural history that this naive idea of capitalism must be given up once and or all. Unlimited greed for gain is not in the least identical with capitalism, and is still less its spirit. Capitalism may even be identical with the restraint, or at least a rational tempering, of this irrational impulse.”

    In other words, greed has existed in all places and at all times. It is the human condition. Capitalism, on the other hand, encourages a careful husbanding of resources — capital — away from current consumption and immediate gratification and toward an expectation of future gains. By encouraging current savings be invested for greater potential efficiency and future economic gains, capitalism is the opposite of greed.

  3. Kathy March 21, 2016 at 10:26 am #

    It happens everywhere, a term is collapsed with something in such a way as to be misconstrued as that something itself. Capitalism and greed have been collapsed for a long time. Your article does a good job of un-collapsing them and making important distinctions. Thank you.

  4. Mike Miller March 21, 2016 at 9:05 pm #

    You nailed it, Rick.