Private greed vs. public good

Ernest Prabhakar (
Wed, 10 Jun 98 11:29:20 -0700

A fascinating Forbes essay. I haven't read far enough to know whether =20
I buy his arguments, but I was impressed that someone has tried to =20
redefine capitalism to be based on something other than greed. What do =20
you think?

-- Ernie P.
P.S. Alumni is still down, so "" is safer. capitalism


The moral core of capitalism is the essential altruism of enterprise. =20
The anthropological evidence shows that the system begins not with the =20
greed that provokes tribal wars but with the gifts that prevent them. =20
Capitalism begins not with taking but with giving. The tribal
capitalists were not warriors or predators; they were the feast givers, =20
the potlatchers, and the mumis=E2=80=94the so-called big men who transcen=
ded =20
the constraints of barter simply by making offerings to their
=EF=BF=BC Such gifts, ubiquitous in the anthropological literature, impos=
ed =20
implicit debts on their recipients, who tried to reciprocate with gifts =20
in return. Thus were extended and accelerated the processes of
exchange that had been stalled in the intricacies of predetermined
trading or in the conflicts of a precapitalist zero-sum mentality. In a =20
zero-sum game, a gain for one player can come only at the expense of a =20
loss for another. In voluntary capitalist exchanges, both participants =20
emerge better off than they were earlier, or else they would not have =20
willingly made the exchange.
=EF=BF=BC The most successful gifts are those that are most
profitable=E2=80=94that is, gifts that are worth much more to the recipie=
nt =20
than to the donor. The most successful givers, therefore, are the most =20
altruistic, the most responsive to the desires of others. In the most =20
rewarding and catalytic gifts, the giver fulfills an unknown,
unexpressed, or even unconscious need in a surprising way. The
recipient, startled and gratified by the inspired and unexpected
sympathy of the giver, is thus eager to repay him. In order to repay
him, however, the receiver must come to understand the giver. Thus, the =20
contest of gifts can lead to an expansion of human sympathies.
=EF=BF=BC The circle of giving (the profits of the economy) will grow as
long as the gifts are consistently valued more by the receivers than by =20
the givers. In deciding what new goods to assemble or create, the
givers must therefore be willing to focus on the needs of others more =20
than on their own. They must be willing to forgo their own immediate
gratification to produce goods of value to others.
...=EF=BF=BC Just as successful gifts are normally valued more by their
recipients than by their donors, investments succeed only if their
resulting products are valued more by the potential purchasers than by =20
the producers.
=EF=BF=BC This difference=E2=80=94the increase in value imparted by the p=
rocess of =20
production and exchange=E2=80=94is the profit engendered by the system.
Profit is an index of the altruism of a product=E2=80=94a measure of the
extent to which an investment reflects an accurate understanding of the =20
needs of others and a suppression of the immediate needs and desires
of the producer.
=EF=BF=BC Even then, profits reflect not a mere calculation of the
demonstrated needs of others but an inspired guess about their future. =20
Profits are residual gains beyond the predictable gains. If gains are =20
surely predictable, they are bid away=E2=80=94and the capitalist will mer=
ely =20
earn interest, which in many countries rarely exceeds inflation and
=EF=BF=BC The altruism of the capitalist goes further. Not only must the
entrepreneur comprehend the wants of others; he must also collaborate =20
with others in his business. And most of all, he must wish that others =20
succeed. The businessman must be full of optimism and hope for his
potential customers. He must want them to prosper.
=EF=BF=BC Above all, he must want the poor to prosper, if only because th=
poor always compose the world's largest untapped market. He must begin =20
by saving=E2=80=94by forgoing personal consumption to serve others. And h=
must hope for and celebrate the successes of others.