There is a great editorial commentary in Barron’s this week. It is entitled, “Time for Empathetic Capitalism”. Key points of the article are as follows:
- The core principle of capitalism is not the greedy pursuit of self-interest, as Adam Smith’s Wealth Of Nations implies, but rather it is the single-minded effort to create value for others, as Adam Smith opined in his earlier, and less quoted, The Theory Of Moral Sentiments. Barron’s talks about Ford as an example.
- “Global capitalism” recently failed, as it was never genuine capitalism at all. There was no creating of long term value. This “global capitalism” was distorted for personal short term gain by a handful of players who followed the IBG YBG principle (I’ll be gone, You’ll be gone). Bankers and traders created hard to understand products, that enriched themselves at the expense of, oh… I don’t know… the entire world economic system.
Houses of cards have since fallen, with numerous governments, led by ours, bailing out these institutions with the money of the common man and woman. And no, I am not a marxist.
On the contrary, I am a capitalist. In my own self interest I will not be up in front, wildly waving my arms, shouting “Me Me Me!!!” in response to the question from the stage: “Who among you fine people wants to buy shares in our financial companies? They are rising in value! Get on board! Who among you wants some?”