This is the second blog entry in a series on critical thinking which lays out ten guidelines for critical thought: (1) Reflect Systemically, (2) Expect challenge, (3) Reject neutrality, (4) Suspect ideology, (5) Respect history, (6) Inspect scientifically, (7) Quadra-sect violence, (8) Connect with your deepest self, (9) Detect silences, (10) Collect conclusions. The series was inspired by responses to my April 16th reflections on the Boston Marathon bombing.
The first rule of critical thinking as understood in this series is to think systemically. This is a ground-clearing rule. Its point is to clarify the vocabulary and concepts without which you’ll not be able to think critically about the most important issues facing our world today. You can’t think about poverty, hunger, war, climate change, healthcare, education, or a host of other problems without clear understandings of the basic economic concepts presented here. Without them, you’ll be thrown for a loop; your eyes will glaze over when conversation turns economic. And economics, remember, is the principal language spoken in the world of politics and newscasts.
Think about what’s happened since the 2008 election of Barack Obama. With the implementation of bailout programs, and discussion of “Obamacare,” there has been a lot of talk about “socialism,” hasn’t there? This has come along with accusations about “Marxism,” “communism,” “fascism” – all in a context that supposes the superiority of “capitalism.” The discussions have rarely recognized the universal prevalence of “mixed economies.” Instead, the discourse has illustrated huge divergences of understanding and opinion about the meaning of all the terms just placed in quotation marks.
Most debate participants simply do not have clear ideas about their meaning. They are convinced, of course, that communism is bad, and that capitalism is good. Beyond that however, ideas remain confused. Most are even unaware that all the terms mentioned describe positions adopted towards the free market economic system.
It is the modest, yet ambitious, purpose of the explanation of this first rule of critical thinking to clear up confusion simply by defining terms in an easy- to- understand way. Doing so is absolutely necessary for any critical thinker to join productive discussions about our days’ most important issues. So, oversimplifying for purposes of discussion and clarity, what follows will summarize the crucial categories in three points each, beginning with capitalism, and then moving on to Marxism, socialism, mixed economy, communism, and fascism.
Today’s blog entry will define capitalism in this way.
Liberal capitalism is an economic system based on (1) private ownership of the means of production (2) free and open markets (places where goods are bought and sold), and (3) unlimited earnings. Those are the three points.
Private ownership of the means of production dictates that individuals should be empowered to own fields, forests, farms, factories and other sources of products for sale and exchange. Communal ownership is thus excluded. That’s capitalism’s first point.
Free and open markets means that private ownership should permit those in question to produce what they choose to produce, where and when they choose to do so, employing whom they choose, without any power outside of market forces of supply and demand dictating that production. Here government interference in the market by way, for instance, of outlawing or controlling some productions (such as liquor or cigarettes) and mandating others (such as beans and rice) is rejected. Moreover, anyone at all should be able to enter an open market regardless of personal attributes such as race, age, gender, nationality, or religion. In all this emphasis on “freedom,” we find expressed the “liberal” nature of “liberal capitalism.” That’s capitalism’s second point: free and open markets.
Finally, liberal capitalism calls for unlimited earnings. That is, the producer’s talent and the quality of her or his product alone should limit the income goals attainable. Limits on earnings such as taxes should be kept to the minimum necessary to provide public protection of private property (police, military, the judicial system) and to supply the infrastructure necessary for commerce (roads, bridges, etc.) That’s capitalism’s third point: unlimited earnings.
Income ceilings, of course, are out of the question for capitalism strictly understood. For capitalists wide disparities between the rich and the poor are not a problem. And some might even admit to greed as a kind of virtue that is responsible for human progress. That idea was captured in the film, “Wall Street,” where entrepreneur, Gordon Gecko (played by Michael Douglas), praises greed in a speech before the stockholders of his company, Teldar Paper Company:
These words, of course, not only praise greed in business, but in national life. Echoing the words of economist Milton Friedman (at the top of this blog entry) and ignoring the fact that in the past greed was considered by Christians one of the Seven Deadly Sins, Gecko claims that greed leads to salvation. It will not only save his business from low returns on the Stock Market, but the United States itself from what ails it as well. For Gecko and Friedman greed is the virtue at the heart of capitalism. It’s what makes the world go ’round.
(Next week: Marxism in three easy points)
10 thoughts on “The First Rule of Critical Thinking: Think Systemically (about Capitalism)”
Greed is probably another of those words that need defining.
Perhaps you’re right, Danny. I think of it as self-seeking at the expense of others. What do you think?
That makes me wonder if you have ever been self-seeking at the expense of others. What are your thoughts? Do you think you ever have?
Yes, of course I have, Danny. Like you, I’m human. Greed reflects the law of the jungle which according to all great religious traditions human beings and their systems of economics and politics are called to transcend. Those traditions (including Christianity very prominently) tell us greed (one of the Judeo-Christian tradition’s Seven Deadly Sins) must be resisted rather than established as the basis of a Way of Life.
Just curious, meaning that it’s not meant to trap or trick you, but rather to understand what you are saying–“called to transcend by who or what?
Danny, besides referring to the Great Religious Traditions I mentioned, I was referencing the “call” inherent in human nature — if one believes (as I do) that being human sets us above our animal ancestors and their law of the jungle. Of course, not everyone agrees with that position. Many believe that we are no more than animals — or random particles colliding in space. What do you think?
Reblogged this on 777wide and commented:
This is the second blog entry in a series on critical thinking which lays out ten guidelines for critical thought: (1) Reflect Systemically, (2) Expect challenge, (3) Reject neutrality, (4) Suspect ideology, (5) Respect history, (6) Inspect scientifically, (7) Quadra-sect violence, (8) Connect with your deepest self, (9) Detect silences, (10) Collect conclusions.
You have not refuted Milton Friedman merely by linking him with the fictional Gordon Gecko. In fact, such logical legerdemain reflects a gap in your own critical thinking. When we studied classical logic, we learned that whatever is perceived is perceived through the biases of the individual doing the perceiving. This inherent bias, as I recall, was not limited only to philosophical conservatives. Modern communications theory has proven, as has the experience of anthropologists like Margaret Meade, that we all bring our preconceptions to the table, and it is virtually impossible to speak of “objectively” pursuing truth. Given this, I would suggest that you need to be more consistent in applying to your own thinking the concepts you outline in your very lucid first article of this series.
While I’m at it and on a different topic that nonetheless bears on this discussion of critical thinking, I would caution you on being too facile in linking Western capitalistic nations with Hitler’s diabolical machinations, aided and abetted by Pius XII and his minions. The West has done many horrendous things, no doubt. But we have never systematically attempted to destroy an entire population simply because of who they were. We are not the same as Hitler, Pol Pot, Stalin or Chairman Mao.
Thanks, Bill. In this blog entry on capitalism, I wasn’t trying to refute Friedman. I was simply trying to present his argument and summarize in 3 points the essence of free market capitalism — (1) private ownership of the means of production, (2) free and open markets, and (3) unlimited earnings. I agree that one cannot escape bias. That’s why (in the first installment in the series) I tried to define the place of commitment I’m coming from. Neutrality (or as you say “objectivity”) is impossible, but one can still attempt to be fair. As for the incomparable holocaust to which you refer . . . I don’t think it’s as incomparable as you state. Please see the excerpt from John Stockwell’s speech in which he describes the U.S.’ “Third World War against the poor.” There he calculates that the U.S. has been responsible for the deaths of 6 million people in the 3rd world since the end of the Second Inter-Capitalist War. And that, of course, was before Iraq and Afghanistan and the associated “American” atrocities. See the Stockwell excerpt at http://www.youtube.com/watch?v=m3ioJGMCr-Y