Editorial #2
Where Should We Stand?
I just read a really interesting article by Paul Craig Roberts on "Who Did More
for Mankind, Mother Teresa or Mike Milken?" and I thought to myself why do people
have to be so extreme. Could extreme measure be the deleterious mother of all bad
decisions?
In capitalism, according to Roberts, inequality is not a problem, but a
natural consequence of a free society. Roberts then goes on to argue that people
should not be judging capitalism based on a failed system of communism. His exact
words were, "The process allows them to denigrate capitalism for not doing what a
different system- a failed and defunct one- was supposed to do but didn't'. The
market rewards merit, ability, luck, and success with wages, salaries, profits,
capital gains, and dividends. The rewards differ because the performances differ.
Unequal incomes are proof that the market is doing its job." Furthermore, Roberts
compares Mother Teresa with Mike Milken by calling the former a redistributor of
wealth donated by philanthropists (self-sacrifice) and the latter the creator of
jobs, wealth, incomes and new products for large numbers of people (I assume he
meant junk bonds that had destroyed many people's life savings as well as being
criminally charged by SEC on several felony counts of Milken and his company.)
Later, Roberts used the collapse of many communist countries as indication of
failures and asserts "that there is more morality in freedom than in income
equality, perhaps American intellectuals also will on day give up communism."
The last line is a very powerful statement that appears flashy, but as I
thought about it more and more, I ponder on the definition of "freedom" Roberts
has mentioned in his article. Can morality really show through if a young Black
man shoots another person out of his own willingness just to gain some pocket
changes? Is that Greed or morality? Well, according to Roberts, Greed is good in
capitalism because it creates incentives to efficiently allocate resources until
there are no more gains to trade. I don't deny that greed exists in profit
maximizing firms. But we shouldn't confuse existence with causation. Do we really
need greed, an extreme form of discipline, to achieve market competition that had
brought a variety of goods on to the market? Perhaps greed allows me to make more
money, but if I were always afraid of someone else taking advantage of me because
he is greedy, would my life, my utility that is consisted of money and happiness
be maximized? In my perspective, capitalism is a necessary foundation where a
certain extent of communitarian, egalitarian ideals can be based on to show a
humanistic side of a competitive firm where employees can derive satisfaction from
participation and being treated in a more humane way that was designed in the
communist theory.