Why I like capitalism

capitalism towards a more prosperous society!

Recently I’ve been thinking quite a lot about the economic system called of capitalism, I’ve had some conversations about it on my podcast (with David Friedman, Per Bylund, and more recently Johan Norberg) and I always supported the ideology of capitalism. If I had to define capitalism I would say that capitalism is freedom, one of the unique things about capitalism is that you give people the choice and it’s not a system that really promotes obedience it’s actually the quite opposite (in legal terms of course)! Everyone wins in a capitalist society and there are several studies showing like that the creator of the innovation only keeps around 2% of their total profit made by that same innovation, in this way society wins more than the creator itself specifically because society did nothing to get this innovation (all human progress is related with capitalism and the way a very small entrepreneur group of people “carried” the lazy people and made the society grow otherwise if the society was only the total sum up of innovations dividing with the number of people, the result would be pretty bad ahah). What it seem’s we’re seeing nowadays is that most economies aren’t really ready to embrace a full capitalist system specially in the sense that if the government wants to punish something they tax it, and what we’re looking right now in the majority of governments is that instead of the government wanting to reward innovators for the work they did in evolving society, they only make them pay more and reduce the profit which is totally a sign to smart people around that they should just give up on that great idea going around their heads that could revolutionise society! Profits are a sign that the business is doing something that the people are finding useful so it would even be immoral to businesses to kind of “apologise” to the government by giving them money, you *ideally* should keep the entire profit because you’re cresting something that was not known before and therefore you’re responsible for the entire good (or harm) that that innovation might bring. We can take a deeper look at today societies and verify that the societies that embraced capitalism grew and the others didn’t, countries like the United States that are highly capitalist are currently at the front row of fields like AI and the entire tech industry, on the other side, the European Union seems to be doing exactly the opposite and therefore dispel startups and the future. One of the problems that I see with the European Union is the big regulations that businesses have to follow, these massive regulations will impose a big big burden on the startups and only the big companies will survive and eventually succeed, and this is one reason why the United States is proud of their AI business whereas we in Europe are proud of our AI regulations because we don't have those businesses because we've chased them away.

Even looking at capitalism from a more moral perspective, capitalism seems to be the only moral system (if that even exists ahah). Capitalism rewards human action, human agency and human responsibility contrary to socialism, who on earth doesn’t wants to be responsible for where he is in life? Certainly we can look at extreme cases like people in sub sarian Africa that barely have conditions to eat but we’ve seen billions of cases that high agency people who are unlucky to born in those conditions had the ability to overcome that giant “barrier” and find their economic potential. When I say that capitalism is freedom is in that sense as well, just because you’re a very wealthy person that doesn’t mean you need to give money to people who are poor and kind of trying to rebalance the world (even though if you perhaps should), more and more we’ve seen movements like Effective altruism arising (and billionaires like Bill Gates that will donate a big part of his fortune to charities) and the truth is that most wealthy people will come to the conclusion (even if lately) that more money doesn’t really makes their life’s better and that same money can play a huge role in changing the life’s of millions of people who struggle to survive, the effective altruism movement (that I write about in this blogpost) is fundamentally made for wealthy people that have the opportunity (and in some sense feel the moral obligation) to donate 10% of their income or just for spontaneously donate to charity. I don’t think at all that capitalism is making the world more unequal, it’s actually the very opposite in my opinion the inequality of the world is really based on the inequality in the distribution of capitalism (for example United States VS Africa). This new “revolution” (AI, tech) that we’re living is making the world more equal, in a big part because of globalization where we see a distribution of wealth (or distribution of capitalism) and this is also very deeply connected with memes and how ideas are spreading faster and faster (note to self: write a blogpost on memetics).

It’s important to notice that capitalism isn’t (in my opinion) utopian and in a sense it’s quite anti utopian because there’s no an end point with capitalism, and the people around the emergence of this ideology didn’t really imagined an utopia, only a way to grow human societies (and eventually human flourishing). “It sets its hope to the very idea that no one knows so far” quoting Johan Norberg in our awesome conversation!

There are millions of books on capitalism some people I really think it’s worthy to read about capitalism is Johan Norberg, Milton Friedman, Adam Smith and Ayn Rand!

Here’s my conversations about capitalism and economics: