Sunday, March 25, 2007

Yes, I Have a Problem with Capitalism (But So Did Adam Smith)

First of all, I have to begin this post by thanking people who comment on my blog. In particular, I really enjoy people who debate and question me. They force me to think and rethink my position. As the Talmud notes, you learn the most from those who question you.

Recently, I commented about a company that was offering coffins and burial urns with major league logos on them. I said this (among other things):

I always thought funerals were about how the deceased made his mark on the world. Now, thanks to Eternal Image, funerals can be about how you spread someone else’s trademark to the world. I’m sorry, but a legacy should be bigger than a baseball cap.

A friend was kind enough to take out the time to comment, and argue with my view.

He wrote:

“…….My point is, the trend of personalizing funeral services has been going on for years and this is something innovative. It's what the people want. If a company can make a buck off of it, why not? They aren't forcing people to buy their product.30 years ago, people would have thought it was bizarre for people to arrange or plan their own funeral. Now, that number of preneed funerals are up to more than 25 percent.It's all about choice. The marketplace will decide whether this company sticks around. But they are coming up with some interesting ideas.”

Now let me rephrase the point: The market is the best way to improve society, living standards and individual happiness. So why make fun of an innovative company as it makes its way to the market?

This challenge is directed at me:

Do you have a problem with capitalism?

Yes, I do have a problem with capitalism. And so did Adam Smith.

Adam Smith, the 18th century Scottish philosopher, is considered to be the founding father of capitalism. In his book The Wealth of Nations, he notes that society is most productive when structured around the self interest of every individual. Smith says that:

"It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest."

So free enterprise is the best way to structure society. Let the market decide what’s good or bad, and whether Yankee logos belong on coffins.

But at the same time, Smith wrote another book, The Theory of Moral Sentiments. In it, he sees society as based on mutual love and sympathy:

It is thus that man, who can subsist only in society, was fitted by nature to that situation for which he was made. All the members of human society stand in need of each others assistance, and are likewise exposed to mutual injuries. Where the necessary assistance is reciprocally afforded from love, from gratitude, from friendship, and esteem, the society flourishes and is happy.

So in one book, Smith says society is best structured around self interest. In another he says it is best structured around love and gratitude. So which is it?

This question, known as the “Adam Smith Problem”, is one that has baffled scholars. Clearly, Smith may have embraced laissez faire capitalism, but he also realized a society structured around pure self interest would lose its soul. Or, to apply it (rather crudely) to my case, capitalism might produce a New York Yankee coffin, but capitalism should not have the final word. Our spiritual values should make the ultimate decisions.

Every person must grapple with balancing the values of productive self interest and spiritual altruism. Rav Soloveitchik notes that every person has two deep existential needs: to conquer the world and to redeem our souls. We conquer the world by building and inventing. We redeem our souls by creating community and pursuing spirituality. Life is lived at the intersection of these two impulses.

Humans have an existential need for both productivity and spirituality. Spirituality without productivity is a humiliating vow of poverty, a way of life beneath the dignity of a being created in the image of God. But capitalism without spirituality is a soulless dignity, endless progress without genuine purpose.

That’s my problem with capitalism.


Rabbi Chaim Steinmetz said...

Please note that a professor on another blog has taken a great deal of exception to my portrayal of Adam Smith.


Clayton said...

I cannot claim to be well read on this whole topic or even dogmatic as to which side is "better" but one thing I have observed is that a so called socialistic society struggles with motivation to produce. It seems not to be consistant in our nature to work for "peanuts (food) unless we are down and out ourselves. The other observation I would make is that in my short life, countries that appear to work have to be lead by a very strong (read dictator type) leader. What seems to lead us astray is the things we accumulate beyond food, shelter and clothing. Seems like this is where the "deadly sins" cut in!
Appreciate your observations. Clayton

Gandalin said...

That's not your problem with capitalism, it's your problem with capitalism without spirituality. But that's really your problem with any sort of economic or political system without spirituality. Humankind can not live properly without spirituality. Period. Spirituality is necessary. But once you have spirituality, so-called capitalism, i.e. the free market, is the best way to structure economic activity, and this has been proven in practice countless times and new proofs are offered daily by the few remaining socialist/statist despots in the world.