Biz Features

The Reason Capitalism Works? Altruism. No, Really. [VIDEO]

by . April 1st, 2014

Pop culture rarely portrays capitalism and entrepreneurs in a positive light. Sure, you sometimes have Bruce Wayne or Tony Stark. But you’re more likely to see “entrepreneurs” like Gordon Gekko or Lucy when she gives unsolicited psychiatric advice to Charlie Brown.

One problem is that we often misunderstand what it means to be an entrepreneur. Greed is often the first thing that comes to mind.  Investor, writer, economist, techno-utopian advocate, Republican Party activist George Gilder gives a pretty compelling argument explaining why capitalism is anything but selfish:

I’m not a George Gilder fanboy by any means. For instance, he has written at length against the theory of evolution in favor of intelligent design. However, it’s readily apparent that businesses can only achieve lasting success if they are able to give what their customers need- which is a very compelling argument indeed.

Some Caveats

One thing the Gilder did not directly address in the video however, is that  businesses regularly influence what choices are available to customers – as well as what customers think  they need. This is exactly why he was careful to emphasize that “a business prospers only if customers voluntarily trade for its output.

Capitalism

The problem is, even the word “voluntary” opens up a whole can of worms. – especially when social engineering and marketing  are involved.

Why do we make impulse purchases?

When was the last time a business invited controversy over things it intentionally kept secret from its customers?

How much should a business disclose for a customer’s decision to be inarguably involuntary?

What if the customer does not know any better?

What if the flow of information is controlled so large swaths of the buying public don’t know what’s good for them?

Then you get into arguments about how crony capitalism is different from whatever the other person’s definition of real capitalism is.

The questions just keep coming from there.

What do we know for sure?

One thing that is clear though, is that the pop archetype of capitalists and entrepreneurs is flawed, especially when you consider that entrepreneurship is not just a necessity for creating a business, but for running any sustainable venture. Just take a look at any successful non-profit and you will see that their founders are likely entrepreneurs in every sense of the word.

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Peanuts by Charles M. Schulz

If someone for some unlikely reason is giving you a bad time for being an entrepreneur, don’t feel too bad. You’re in good company — nearly every material thing we’re enjoying today was the direct result of someone like you.

As for the Jordan Belforts, Bernie Madoffs, and Pablo Escobars who give entrepreneurs a bad name, they are hardly representative of all entrepreneurs. That would be like saying Jack Kevorkian is representative of all medical professionals, or that the Westboro Baptist Church is representative of all Christianity.

In any case, here’s to all builders – and to those who will do anything to share what they’ve built.

Happy April Fool’s Day!

ABOUT THE AUTHOR:

Arthur Piccio manages YouTheEntrepreneur and has managed content for major players in the online printing industry. He was previously BizSugar's contributor of the week. His work has appeared multiple times on The New York Times' You're the Boss Small Business Blog. He enjoys guitar maintenance and reading up on history and psychology in his spare time.

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