Capitalism and enlightened self-interest

Economics is the study of human nature.  It seeks to explain how individuals interact in the exchange of a medium of value: money, barter, services, etc.  Psychology, social science, even philosophy also study human nature.  Whereas these studies can affect us at different times, the economy constantly affects us.

An economy is a massive interchange of one product for another.  It is more complex than weather prediction.  Yet one economic system excels at recognizing human nature to its fullest.  And that system relies on the one thing the left tells us is wrong: self-interest.

Human nature requires self-interest in order to perpetuate, survive, and thrive.  If pursued by a saber-toothed tiger, it is in one’s best interest, and that of his species, to survive.  Far from being a sin, self-interest is the mechanism by which humans pass on their genes and perpetuate.

However, if solely absorbed by self-interest, our species would not build economic, social, religious nor philosophical systems.  Our nature calls us to higher awareness, an enlightened ability to balance our own self-interest with something greater than us.  F.A. Hayek and the Austrian School of Economics, among others, find the right blend of self-interest and selflessness in their theory.

It takes an infinite number of forms, but there resides in each heart a desire for a greater calling.  This calling is an expression of the divine spark that energizes our being.  It is self, Atman (Buddhism), Isvara (Upanishads), soul or spirit (Torah) — many names, but one entity, an individual, a self.  Read Joseph Campbell, “The Hero with a Thousand Faces.”

This essay started with economics and morphed to divinity.  These disparate topics are linked by human nature.  Our Creator could certainly dominate us but chooses not to.  What right does a central planner, a bureaucrat, a government, or a dictator have to control us?  It is one thing to embrace a religion or philosophy of our own free will.  It is quite another to be forced.

Economics studies one aspect of this interaction between the mundane and divine.  The one economic system that resonates with divine free will is capitalism.  It personifies enlightened self-interest.  Capitalism depends on the individual to be free to choose.  It is the antithesis of central planning, socialism.

Hayek decimates socialism as an economic system.  Socialism, fascism, and communism rely on the central planner: one person or entity that determines our lives through military or social power via media, propaganda, rules, regulations, and taxation.

Hayek’s argument is that free (private) markets, by establishing prices and values through free exchange, are infinitely more efficient than central planners at assigning value because central planners warp market prices and values through their manipulation — in other words, their social engineering.  (We don’t care if you want an E.V.  We will force you.)

Central planning (socialism) always fails at the economic level.  No government bureaucrat (central planner) can sustain an economy that forces an individual.  The socialist knows this, so he uses guilt (capitalists are greedy) to subvert human nature for a short time.

It is said that money is the source of evil.  No, love of any inanimate object is the source of evil.  If we desire anything in excess — money, power — it controls us.  The only “thing” we can desire in excess is a concept called wisdom, principled knowledge.

Although it appears to be a dilemma, the dichotomy within mankind of self-interest and selflessness can be resolved through awareness, enlightenment.

As we’ve argued above, capitalism is enlightened self-interest, and that is a blessing.  Capitalism is the only economic system that blends the ability to chose with full awareness of our choices.

Jay Davidson is founder and CEO of a commercial bank.  He is a student of the Austrian School of Economics and a dedicated capitalist.  He believes that there is a direct connection between individual right and responsibility, our Constitution, capitalism, and the intent of our Creator.