Sunday, July 15, 2012

Economic Tolerance and Diversity

At a scientific institute not far from Moscow, Cold War Soviet scientists were tasked to invent better antiaircraft armaments for defense against the capitalist West. The courtyard of the building was quite nice and when the weather was good, some of the scientists liked to stroll around and around, thinking about how to get the job done. The guards complained. "They should spend more time at their desks working!"

This illustrates one of the major weaknesses of the communist system: a narrow and intolerant view of the economic person. There were relatively few legitimate ways of participating productively in the economy. The rest were either discouraged as suspicious, or they were criminalized. The cost of missed opportunities was high, and this inflexible and dogmatic form of communism almost immediately proved itself unable to adapt to changing conditions. It rapidly died out. So much for the imperatives of history.

Meanwhile, capitalism has proved its superiority, survived, and is going from strength to strength ... or not.

Certainly capitalism embraces diversity and tolerates a wide variety of people in economic activity. Capitalism is also fair in the sense that the money one makes is both the reward of one's merit and the measure of one's success. Birth (as in noble or common), gender, and skin color are nothing compared to the size of one's bank account.

At the same time, capitalism stratifies the members of society by wealth (roughly, into the rich and the poor). It is through that mechanism that capitalism becomes deeply intolerant. This comes about in many ways, only of few of which will be mentioned here.

Successful capitalists on the whole may be more tolerant than most people, and there is some reason to believe that is true. What frustrates the rest of us is that there may be relatively few rich bigots, but each of them has enough money to make their bigotry hurt many other people, and they can fiinance the harm they do for a long time.

Below the truly rich in the economic layers are the nearly rich – the fearful climbers. The fearful climbers are those who desperately want to be truly rich; to achieve it, they feel that they just need one more good deal, or a little help from above. They are fearful of moving down, and therefore fear those below them who are moving up. They are likely to find justifications for stepping on the hands and kicking the heads of those who are lower on the economic ladder.

For those on the bottom, the rich and the climbers may have some sympathy for the helpless ones, those who cannot even find the ladder. However, they generally have harsh words for the "lazy and shiftless" ones who know exactly where the ladder is, but refuse to climb. This ill feeling is mutual. Those who drop out are just as deeply intolerant as those who buy in.

Finally, while capitalism is fair on the surface, it becomes more and more unfair as the rich get richer and the markets become unbalanced. Capitalism seems equitable because all the rich do is take advantage of their advantages. Everyone does – it is only human. That seems fair enough until the rich gain so many advantages that others can no longer compete. The competition is too rigged.

It becomes so rigged that the rich can successfully demand that the poor bail them out of their mistakes. This is the deepest intolerance of capitalism, when the poor are made poorer to save the rich from the consequences of their own mistakes, and none of the rich think it is wrong. After all, they have arranged things so that they can blame the poor.

At the same time, the poor become so oppressed that their situation is no different from what they would experience under a dictatorship. The promise of capitalism becomes a lie for the poor, and they blame the rich. Typically they then make the mistake of framing solutions in terms of the currency they share with the rich. They need money, and they can imagine only a few ways to get it – they think mainly in terms of taking it from the rich. The poor are just as stuck on this side of capitalism as the rich.

On the other side of capitalism, we look for a deeper tolerance, accepting the rich for who they are and the poor for who they are. We know that the strong hands will always take from the weak hands, and that the people are made up of both types. We have to work with that fact. We cannot abandon either type of person. At the same time, competitive capitalism works very well when it is working. We do not want to give capitalism up, either. Convincing all this diversity to work in harmony is the problem.

The key to finding the solution is that capitalist exploitation takes place through the common currency. The rich have the money, the poor have to earn it, and governments have please both sides. The rich can create artificial scarcities of money, scarcities that the government is hesitant to make up because it has to weigh the effects on everyone, not just the poor. One currency rules us all. Single currencies and economic bigotry are intertwined.

Therefore solutions will involve multiple currencies, at least one for the rich and at least one for the poor. The rich might be able to create a scarcity of money among themselves, but they would not be allowed to own the other currency. The government would therefore have the flexibility to deal with the problems of the poor almost independently of policies to deal with the problems of the rich.

We had to suffer through the disadvantages of capitalism for so long because we did not have the technology to maintain multiples currencies. We do now, and we should start to use it.

Both capitalism and communism are deeply intolerant, capitalism perhaps moreso in nature than communism. Capitalism survives because it is better than communism at motivating and inspiring the people. By breaking the currency link that allows the rich to exploit the poor, we have a chance to offset the faults of capitalism and bring to it a deep tolerance.

TheOtherSideOfCapitalism (

Copyright © 2012 TheOtherSideOfCapitalism

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