This weekend I read an article in Pieria, the British equivalent of 3 Quarks Daily, both of which promote intellectual thought (2008) on a wide range of subjects. In Pieria a writer defined the extremes of thought on economics as Marxism and the Austrian School. Given my hearty respect for the Austrians, I was somewhat disturbed to be categorized as an extremist.
I actually think anarchists are at the opposite extreme of Marxists, but the anarchists write very little about their economic system. Marxists define the one extreme because of their heavy reliance on centrally planned economies, whereas the anarchists advocate for no government and consequently no regulation. However, I digress.
The Austrians were probably the first economists to acknowledge the role of self-interest in markets and economic activities. From these writings many derived a negative view of capitalism and the Austrians. Both the capitalists and the Austrians have suffered from this association with self-interest for over 100 years, the same period in which perhaps the greatest economic development in history has taken place. What has been overlooked by the critics is one simple fact:
" A man may promote the interests of others even though the interests he seeks to promote are his own. " (1)
If you do not understand this quote, then it could be re-stated:
- to build a large company, solve a problem for a large number of customers
- to design a value proposition you have to create value for the customer
What has been overlooked by the critics of capitalism and many capitalists is that the most fundamental premise of capitalism is that one serves one's self-interest by serving others....profitably.
An additional article on intellectual thought from 2012.
(1) Arthur Shenfield 1970 Modern Age article “The Ideological War Against Western Society” courtesy of Cafe Hayek