Sunday, February 01, 2009

Changes (and hey Stu)

After my last post, a good friend from college, Stu Stein, sent me a great one line email:
Dude, come back to your Whartonian roots. You've been spending too much time in Berkeley.
I reread my last post and laughed to myself. He's probably right. (Although, in my defense, Berkeley is great.)

Really, I'm not sure what to say. Times change, people change. For starters, I'm not sure I ever was much of a "Whartonian" in the first place - those of you who were there probably remember my rants on Wharton's culture or my stubborn desire to only wear sweats to class (mostly for comfort, but also as a metaphorical finger to all the kids who took themselves way too seriously:).

But Stu is right about one thing: I've shed much of my ideological support for capitalism.

Don't get me wrong - I am an entrepreneur, first and foremost (at least as professions go). And entrepreneurship needs capitalism, at some level.

But, ultimately, there needs to be a better check on two innate human flaws - short term thinking and greed. For all its merits, capitalism often encourages the former and always relies on the latter. Now, this is often a good thing, as pointed out by Milton Friedman in this must-watch for capitalism haters.

His point is simple - greed will exist regardless of the system in place, and capitalism is the best way to harness this greed to produce positive outcomes for society. However, he discounts one aspect of the situation, on which I'll base my argument against capitalism as we practice it: culture.

Basically, our culture in American has spiraled out of control. While greed is a fine driver for enterprise, when left unchecked, it can have disastrous consequences. And we encourage it, deifying the rich and famous, so much so that much of our population, particularly those at the top, the ones throwing around the kind of money and making the kind of decisions that can bring our economy to its knees, base their self-worth on their bank accounts.

Wow, this totally turned into a rant on materialism. Didn't intend for that to happen. But what are you going to do - it's true, and it's the root of our country's problem. Maybe I've changed and now I can see it, maybe it's always been there. Who knows.

And then the more important question - what do we do? How do you change culture? Because as long as we glorify extravagance and excessive opulence, our problems will continue, in one form or another. Clearly you can't solve the problem in one fell swoop, but if we had a society that shamed the bankers, regulators, and other perpetrators of the fraud and greed that led us here - truly put them to public shame - we'd be in better shape. If we didn't feel the need to buy another car, house, or flat screen TVs so intensely that we were willing to take out debt to do so, we probably wouldn't be here.

In short, we need a cultural force more powerful than capitalism to keep capitalism in check. Religion is the only one that comes to mind. But, of course, that brings us Nietzsche, and I'll leave you with his most famous words...
God is dead. God remains dead. And we have killed him. How shall we comfort ourselves, the murderers of all murderers?
ps - for the record, I'm very agnostic and identify more with a godless religion (Buddhism) than any other. but the quote certainly frames our society from an interesting perspective.
pps - hey stu. having fun selling out in new york? :P


  1. Shame? That's very Catholic of you. Throw in a little "guilt" and it'll really resonate with the Jewish population.

    But come on man, shame is really your solution? You have Madison Avenue creating desire in consumers, Wall Street rewarding executives for making more money, the media spotlighting glitz and glam, and everyone cheering the economy on with their 401K, making sure they have money to retire on. And your culture change solution is to ostracize some execs?

    I think you would have to fundamentally change the Mad Ave-Wall Street-Media-Hollywood complex to affect that kind of cultural change. And at that point, it might just be easier to stay in Berkeley, wear some Birkenstocks, and rail against "the man." I mean, I hear there's always room for one more in PETA ;)

  2. Shame, guilt, conscience. It's all the same thing. The "cultural change" goes way beyond ostracizing execs - it's about a return to sanity and a departure from excessive materialism. The ostracizing is an effect

    And you're right - you would have to change that complex.

    But this isn't so crazy. I think there is a reason, for example, that Slumdog Millionaire has become so popular in our country, and that reason is perspective.

    Cultural change is slow, but I think it's the only way to make capitalism sustainable. If we continue to allow a culture that encourages greed and materialism, we're going to keep running into the sorts of systematic mistakes that lead us to where we are now...