A Critique of Our Current Markets

A lot of people today feel that capitalism is failing them. They feel left behind and they believe that the system is rigged against them. This will undoubtedly be a major driving factor in the next presidential election and there will be many candidates who offer their own diagnosis as to why people feel the way they do. A key reason, I believe, as to why people feel the system is failing them is highlighted by Colin Wright in his book Becoming Who We Need to Be. Wright addresses the way that many people seem to be creating businesses, making money, and becoming successful through trickery and rent-seeking behavior. He writes, “…this means that if we can find a clever way to extract money from the system, even if we don’t create anything of value, or we sap value from society in the process, we’re still doing it right.”

In a recent podcast episode for his show Against The Rules, Michael Lewis described the way that many financial companies exist not to serve customers better, but to operate in a way that makes money seemingly by fooling customers into making decisions that benefit the company without benefiting the consumer. I’m sure that for many of us, our healthcare or health insurance has felt that way. Also for a lot of us, we probably felt that we got a little ripped off on one of the first times we tried to purchase something on Ebay, and ended up not quite getting what we expected.

A lot of aspects within our economic system at the moment seem to reward people even if they don’t give us what we expected. There are incentives to create systems and products that sound clear, but end up being hard to access and ultimately don’t seem to make us or anyone except the seller any better off.

On our own, we all want to get the most money and reward from doing the least amount of work. At times it is true that we all want to bust our bums and do great work, but if we could just set something up where we made money no matter what and didn’t have to do any real work, on some level we would be happy. On an individual level this is not a big deal, but when it is combined, multiplied, and turned into a corporation it can become a problem for society, and that is what we are seeing in the national mood today. People sense that the system is not fair and doesn’t produce fair outcomes. The individual instance of being ripped off might not be the thing that makes them the most angry, but rather the fact that the system allows for people to pull out money and become successful without creating value makes people lose faith in institutions. At a certain level, no matter what our individual incentives are, we should recognize and accept that this is a bad way to operate long term, and we would be better off within a society that seemed to operate more fairly because it would create less anger and more stability on a societal level.

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