Dr. Trost Videos
This week I sat through two videos by Dr. Steve Trost and I read chapter 4 of Poverty and Wealth by George Gilder. Dr. Trost spent some time debating the differences between Adam Smith’s and George Gilder’s beliefs on Capitalism. To sum up, Smith believed that capitalism is a mechanism in which you serve yourself before serving others, whereas Gilder believes that capitalism is a passionate act in which the entrepreneur gives before receiving. Dr. Trost points out that both economists acknowledged the fact that capitalism succeeds because it serves others; but “why do people serve others?” is one of the big questions. The debate between whether it is for self interest or if it is for giving is a debate that I don’t know if I’m very invested in, but for this paper’s sake, I’ll analyze further. My take on it is that it doesn’t really matter which one it is, because capitalism still succeeds from the “serving of others” part. I personally think that entrepreneurship is an extremely self-serving activity, but I don’t see a problem with that in any way. It is natural to want to act for your own self interest, especially in a world where you can’t survive without money. The way I’ve always viewed entrepreneurship for myself is that it's a great way to make money while doing things I love. It isn’t some brave act. I just don’t wanna be unhappy in my career.
Matrix and Zero Sum Mentality
Dr. Trost gave us a matrix with a row of assumptions of what people are driven by: reciprocity, greed & self interest, self-sacrifice, and genuine self-sacrifice; and a column of systems that range from pure capitalism to pure socialism. In his video, he told us his assumed outcomes of each scenario. We were also advised to fill it out ourselves, and I did. Obviously, when you’re given categories that lean toward an answer, it’s hard to answer in the other direction. I think that if you assume people are feigning self sacrifice or that they’re operating based on greed, then the more obvious answer is that things would not function as well, because they aren’t being genuine businesspeople; however, I do think that many entities do these things while seemingly being at the top, so I’m not sure about what the actual answer is. Nonetheless, Dr. Trost thinks that the less government involved and the freer the market is, the more people operate under self sacrifice and reciprocity- something I agree with. The more free competition there is, the more there is to risk. Additionally, I believe that the less barriers there are, the more opportunity there is for reciprocity. Another topic that was touched on is the idea of “zero sum mentality”, which is a way of thinking, assuming that the economy has a fixed cost and that the only way you'll make money is by taking. Dr. Trost says that, therefore, if you believe that, you'll operate in self interest, because it would then be out of necessity. He explains that this mentality is dangerous, because it moves society away from sympathetic giving. My thoughts on this are limited, as I don’t know much about it, but from what I can tell, I don’t think I have that mentality. The idea that someone else’s gain is your loss is really adolescent. I will say, however, that when it comes to wealth and fairness in corporations and industries at large, that idea becomes more complex. For example, the idea of taking advantage of lower wages in places that are poorer.
Chapter 4 of Poverty and Wealth
I won’t lie, chapter 4 of Gilder’s book is very economics talk which is harder for me to grasp, but the biggest takeaway that I got is that supply is very important in capitalism, specifically those who are in charge of that supply. Gilder also talked about corruption in politics, production, Keynes views, and the idea of leisure and its role in a capitalist structure. All of it kind of flew over my head, but I really do think Gilder’s main lesson is that entrepreneurs are important to capitalism, and government tends to drown them out and limit their ability to freely compete; the more creative an economy is, the better it functions; supply creates demand; and that investing is better than saving. Those were my main takeaways. I will say, something I take issue with is John Keynes’ stance on “leisure”. To me, it seems like Keynes is irritated with the idea that someone might take time without spending money, and his irritation irritates me. Downtime is important, and I don’t have money, so this is something I do often. I understand how it isn’t “contributing” to the economy, but maybe if I had more motivation to do the things I actually wanted to do, I wouldn’t take as much spendless downtime. As important as it is to “contribute” to the economy, I am also a human being. I cannot constantly be thinking about the economy. Sometimes, I need to do things for me and the people in my life that don’t have to do with the economy, like spending time with my cats, doing art, and making dinner with my partner. If there is meant to be a stance that entrepreneurs are individuals who are passionate risk takers, it should also be that we are all individuals who need time to be human. I don’t know why I decided to go on a rant about this particular thing, but I guess it really bothered me. That being said, I think after the two essays spent on this topic, I believe that I am down the middle of the road when it comes to the “self interest vs. giving” debate. I don’t want to see humans as a machine, but at the same time, a lot of them sure do act on greed and seem to function like a mechanism. There is always something bigger than the individual, and I think in the case of business, that is capitalism. We all contribute to it. Hell, I even contributed to it passively in my spendless activities.