Opinion Page: A Wrench Thrown Into Capitalism

Capitalism is America’s State Run Religion

From the Wall Street Journal, April 16, 2023

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Hey look, the wealthy can do what they like with their money—often paradoxically amassed by delivering productivity-enhancing products. I’ve noted before that there are only four things you can do with your money: spend it, pay taxes, invest it or give it away. The flaw in capitalism is that only one of these helps the world in the long term.

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Anyway, of the four, philanthropy is the most misunderstood. Yes, many philanthropies do great stuff, especially on a local level. And it sure feels good for the giver. We all get that warm fuzzy feeling—a psychic reward—when we donate to causes. Help your fellow human. Fund schools. Gild the opera. But does that giving do any lasting good? Sadly, only sometimes.

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At its best, lots of philanthropy is very useful, but may not be sustainable over time—a sugar high that rarely enables that “teach a man how to fish” thing. Effective altruism may be an oxymoron. And it’s hard to miss that much of philanthropy is to fix government failures in education, welfare or medicine. I think that was Bono’s point.

But at its shadiest, philanthropy drives the misallocation of capital, overvaluing professors, the U.N. and climate poets and undervaluing those who can productively increase societal wealth to fund solutions to the future’s harder problems.

If only there were a way to use capital to provide opportunity, train workers, pay middle-class wages, help people build wealth . . . wait, it just came to me. How about starting new companies and investing in entrepreneurs and world-changing technology? Sure, that’s “a hazardous journey,” but so what? Actually, part of OpenAI is now a for-profit. Yes, it turns out the perfect cure for the flaw in capitalism is, voilà, more capitalism. You may not get that warm fuzzy feeling or media adulation—in fact, you’ll likely be labeled greedy—but you might fund future economic powerhouses. Scolds will throw shade. Ignore them.

darryll jones