For everyone who isn't on my facebook friends list and didn't read the back and forth exchange between Mr. Borba and I, this is a video clip he recommended to me for my consideration and a possible inspiration for a blog topic today. I found this clip to be very interesting and I think I can make some relevant points on it, so I'm taking his suggestion and running with it. First, a little set up...
This is a clip of an interview that economist Milton Friedman gave to Phil Donahue in 1980. It is relevant because the points that Mr. Friedman makes are germane to the current views on the market - namely the system of capitalism and the free market and the constant desire by those who are disenfranchised with the flaws in that system to find the "perfect" socio-economic political structure by which to live. There are points made that I agree with and those that I don't, so first, here's the clip in question:
Here was my response to that clip in the context of our discussion:
It was an interesting clip and I actually agreed with the economist. I will say this, however - 31 years ago, our "big business" system was a lot more diverse and its power far more limited by regulations than it is today. There were dozens of competing businesses in the major industries instead of just a hand full. Milton speaks of the free market and I think he makes a very good point about the ability of a free market to do what a totalitarian regime or a communist dictatorship can't, but then again that seems like pretty basic, common-sense stuff too. Of course a free society with a free market economy will prosper and provide opportunity for the common man that is unavailable in an oppressive regime. Ultimately though, the economic and political climate was a lot friendlier towards ambitious upstart companies competing with the "big dogs" back then. When you have dozens of modest corporations to compete with, rather than 6 or so mega-corps with the power to single-handedly create unsurmountable barriers to entry, competition is a lot easier. In today's current corporate and political structure, I wonder how easy it would be for a company like Microsoft or Apple to start in someone's garage and take on a big corporation like IBM. In fact, I wonder how easy it would be for the NEXT Apple or Microsoft to take on those two companies in our current collusion-rich, unrestricted market system?
So, I think it's important to keep that in mind while listening to Mr. Friedman's soliloquy - the business world, economy and market structure today is very different than it was 31 years ago. That doesn't mean the free market is a failed concept or that capitalism is a flawed principle on it's face, it just means that there needs to be a temperance of fairness and regulation in the market to protect the ability of the entrepreneur, the "little guy" to create a superior product or provide a better service and compete on a level playing field with the "big dogs". That existed in abundance in the 80's, but much less so today.
Where I sort of disagree with Mr. Friedman though is where he sort of merges "greed" with "ambition". There's a difference between the desire of some people to always come in first in every race, to always be the best at whatever they attempt to accomplish and the baser emotion of pure greed. Competitiveness and ambition are positive motivating factors that lead people to compete fairly and follow the "may the best man win" philosophy - nothing wrong with that. Greed, however, follows the philosophy of "win at all costs" and that, obviously, creates a great deal of problems for basically everyone else who isn't you. I think extolling the virtues of competitiveness and ambition and the desire to succeed is a great thing, but let's not equate those positive mindsets with the destructive, narcissistic emotion of simple greed, all that does is justify injustice and excuse inexcusable behavior.
To expand on that, let me first say that I've always been a supporter of a fair market system. I stress the term "fair" because I think there is a distinct difference between a "free" market and a "fair" one. A free market is like a frontier border town in the old west - there's an illusion of order but it's generally a pretty lawless place and whatever tenuous hold the local sheriff had on the populace could easily be upset by the influence of the greedy and the powerful. It's like every old western movie plot, the lawless town with the corrupt sheriff and along comes the hero in the white hat to restore order and right the wrongs. That lawless frontier town is an unrestricted free market.
A "fair" market, on the other hand, is that same border town after the hero in the white hat kills the bad guy in the black hat in a showdown at high noon, runs the corrupt old sheriff out of town, pins that tin star on his chest and wins back the trust and respect of the townspeople. A fair market has regulations that protect the people, allows for competition on a level playing field and insures that the "may the best man win" philosophy is adhered to over the "win at all costs" mentality.
Both of those things rely on a capitalist framework to function, however.
I've never been opposed to capitalism, only to the corruption of an unrestricted and unregulated capitalist system gone wild. I agree with Mr. Friedman that a capitalist system is the one most likely to provide opportunity to the common man and the one most likely to create wealth and prosperity in a society. That being said, it is only through the strict enforcement of fair market protections that those wheels can keep turning smoothly. Anyone can be successful in a capitalist society, as long as they're given a fair chance to compete.
This is a crucial point that I think gets overlooked or even intentionally ignored by those who favor across the board deregulation and the removal of any and all restrictions on the "free" market. I think the reasoning for that attitude is reflected by Mr. Friedman's comments regarding greed as the motivating factor in all people.
Yes, I agree that greed is present in all of us. It's a basic, albeit flawed, human emotion that drives all of us more often than any of us would probably care to admit. However, greed is not a virtue. Greed doesn't produce a better society, it destroys it. The equation of competitiveness and ambition with greed makes it easy to dismiss the latter by lumping it in with the former. Greed is the "win at all costs" mentality of the corrupt frontier town, ambition is the "may the best man win" mentality that exists when the hero in the white hat restores peace and order to the people. Ambition drives you to work hard, stay focused, dedicate yourself entirely to achieving your goals and so on. Greed drives you to do whatever it takes to make sure no one else ever achieves more than you. They are not the same category of emotion or ideology and, as I said in my quoted section, putting them in the same basket allows one to excuse inexcusable behavior.
The issue that a lot of people have with the current status quo regarding our economy and, specifically, our markets is that "greed" has become synonymous with "ambition" and "competitiveness" and that is a bad thing for the majority of the country. The push back against movements like the OWS protest and the 99%'ers is from people on the other side who believe that greed and ambition are the same thing and that when you attack one you're attacking the other. It's for this reason that those who protest against the greed on Wall Street and in politics are accused of wanting to stifle competitiveness and punish ambition. This is an inaccurate and unfair indictment because nobody is opposed to being competitive, nobody wants to punish someone for working hard and achieving success fairly by playing by the rules. The issue that people have isn't with those who have wealth, it's with those who can never have enough wealth. It isn't with people who want to succeed, it's with people who want to see everyone else fail for their own personal benefit.
Nobody begrudges the entrepreneur who starts a business at home and turns it into a thriving company. They begrudge the huge mega-corporation that tries to buy out that small businessman before he becomes a threat to their profit margin and, if he refuses their offer, they do everything in their power to destroy his business and run him into the ground, lest he actually provide customers with a better alternative to their product or service. Like the crooked cattle rancher in that old west movie who takes over the neighboring lands from his competitors and uses the corrupt sheriff to help him do it, that is the greed of the big corporations who use unscrupulous and unethical tactics to eliminate fair competition in order to preserve their neo-monopoly on their respective industry. This is where a clear distinction is drawn between greed and ambition, between selfishness and competitiveness.
It still may fall on deaf ears because I know that the majority of people who have grown accustomed to defending greed as a virtue can't see a difference between being greedy and being competitive, they can't see that there is a strong moral distinction between ambition and selfishness. They think that "win at all costs" is a fair set of rules to play by, so the very aspects of that mentality that are so flawed in my mind are positives in theirs. However, I am confident that the majority of people in this country can see the clear difference between being ambitious and being greedy. I think that most people understand that playing by the rules and winning is preferable in a civilized society than winning at all costs and abusing the system to preserve your standing at the top of the food chain. That fact is becoming more and more apparent every day.
So, thank you, Mark, for giving me a great little video clip to talk about today and providing a source for some perspective on fair market vs. free market capitalism. It has given me an opportunity to hopefully clarify my own views on the subject and I appreciate not having to think up something compelling all by myself!