The Foundational Underpinnings of Capitalism

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Giving

Many view capitalism as the opposite of socialism or communism which are known to be giving in the sense of equality and charitable compassion. However, George Gilder states that “Capitalism begins with giving” as a direct contrast to taking and consuming from greedy roots. Primitive societies wealth in their economies strived from giving according to Melville J, Herskovits. This basis of giving that generates wealth then must be a part of capitalism in all of its popularity and success. However, the gift being given must be valuable to the receiver and will be expected to be repaid back in equal magnitude. This is considered a pillar of capitalism and stems from sympathy. With this sympathy, the needs of the recipient of the gift must be met, but these needs are not always what they anticipate they need. When the definition of sympathy is broken down as “suffering together” it seems ironic since it is claimed to be what promotes wealth and advances. It's as if this suffering plays a part in leading to change because of a common experience and understanding. Capitalism punishes those who are greedy and rewards those who are sympathetic givers, claims Gilder. A large part of this may be credited back to the factor of exchange. This makes me wonder what part of the success of giving is actually from the sympathy and gifts versus just exchange and increasing the market and possibilities. I also believe that selfishness can be presented under the disguise of sympathy and still have the same effect on societal improvement. I agree with Adam Smith in his opinions written in the Wealth of Nations in this aspect.

Creation and Risk

Gilder claims that risking and creating in addition to the previously mentioned giving are all characteristics of capitalists. Creating and risking can often have self-motivation in contrast to the sympathy behind the definition of giving. Mauss and Levi-Strauss as socialists view modern capitalism as impersonal and alienating which leads to conflict and shallowness. While I don’t disagree with this, I also view it as inevitable in an expanding society as we thrive. Markets cannot always be as personable as they were in primitive societies in a vast economy. Potlatch is discussed as the example for giving in order to promote society. But how attainable is this model in a large common day scale? As mentioned, even the primitive potlatching lead to fighting and violence that outweighs the good done. I agree that it is mainly the trade itself that promotes societies to become richer. The motives behind this voluntary exchange don’t matter as long as the trade is still occurring, that is the economic stimulator.

Innovation and Specialization

There is argument that the processes of invention and specialization are what promotes new goods. I agree with this but also attribute some of this credit to the market. Without the market itself, division of labor could not occur. Specialization, specifically of gifts, needs to be based on the need of the recipient. But if this need is based on what the giver thinks they need that gift will be different than if it's given on the basis of the need voiced by the recipient. If the gift is given based on the first option, is it really rooted in sympathy or greed because the gift giver is still thinking of themselves. This motivation of self interest in itself is not a negative thing to me. Self-interest, as the text implies, also means an interest in enterprise and the expanding world. If everyone has this interest in themselves and their role in the bigger world, society is still expanding with underlying giving and engagement. Generosity and giving can still be done with calculating concern for its effects and not just blind sympathy. The essential part of giving is the fact that it is done individually. It would not have the same effects if carried out by the government or a large organization as it does in the spirit of entrepreneurship.

When giving occurs

A crucial difference that is pointed out about between socialism and capitalism is when giving occurs. In socialism giving is the basis of all interactions. However, capitalists begin with giving and then can proceed to take. This takes into account that the world is a changing place, and these complexities need initiative and trust in society despite its unfathomable future. Capitalism is so successful because of what the beginnings of giving represent. They represent certainty in the uncertain and assurance in the innovation that occurs in our society that prospers with entrepreneurship and trust.