A Late Night Thought on Capitalism

My building is an old house converted into three apartments.   Ordinarily, one neighbor lives across the hall from me, and the other lives upstairs.  But my landlord has recently been struggling to keep the other two apartments occupied.

I think he’s been trying to give people a break by renting to folks who are financially insecure.  Such as the couple and their kid who just moved out yesterday.   The lady had a job, the gentleman didn’t, and the family fell short of making the rent.  My landlord must surely have known only one of the adults in that family had a job, but he leased to them anyway.   That may be kind, compassionate and generous, but it is not a formula for keeping rental units occupied.

I’ve known my landlord now for between 12 and 15 years.   Before I rented from him, I worked for him doing odd jobs — mainly house and apartment painting.   He’s a very honest man, a very hardworking man, and, like everyone, he’s got his eccentricities.  One of his eccentricities is that he likes to treat his tenants to some large extent as if they were family.  He’s more comfortable thinking of you as a distant cousin than he is thinking of you as a profit center.

In terms of properties, he’s not a big landlord, nor a tiny one.  He owns about 30 rental units — most of them houses.   I wonder about his tendency to treat his tenants as family.  For the most part, that tendency shows up in his willingness to take a chance on the folks he rents to.  He doesn’t need a perfect credit score nor a perfect rental history.   My guess is he takes about the same chance with folks off the street as he would with a cousin or even sometimes a nephew.

That’s good for people.  And it’s good for the community.  But it’s not good business practice.   In business terms, my landlord’s tendency to treat people as family and take a chance on them results in reduced occupancy, reduced income, and less profit.  If he were in a highly competitive business environment, he might be out of business by now, weeded out by more profitable competitors.

I don’t have enough information to do a real analysis of my landlord’s business.  I don’t, for instance, know how his occupancy rate compares with the average occupancy rate in this market.  Nor do I know what any of his financial margins are. But I really don’t need to know all that stuff to know that my landlord is bucking the system by treating people the way he treats them.  He’s bucking capitalism.  At least, as we know it.

Capitalism is a beneficial system in several respects, but it comes with a huge flaw. It is obsessed with profit.

Now, there is nothing wrong with profit in and of itself. But there is certainly something wrong with an obsession with profit.

Anytime you maximize one and only one value, you create a system that denies other values. And capitalism, by maximizing profits, creates a system that denies other values — in fact, it denies all values that are in any way at odds with maximizing profit.  So, for instance, capitalism becomes the enemy of sane ecological policies in so far as those policies interfere with maximizing profit.  Or, it becomes the enemy of treating people as more than mere sources of income in so far as treating them as more than mere sources of income interferes with maximizing profit.

That’s one of the reasons — a rather small reason, however — that I think capitalism as we know it is a system destined for transition.  I can think of other, more important reasons, capitalism will change.  But at the moment, its obsession with profit has my attention.

If we could look 100 or 200 years into the future (and perhaps not even that far into the future), my guess is we would find a “capitalism” that is remarkably different from what’s practiced today.  Indeed, we will either do something to radically curb and regulate the obsession capitalism has with profit, or we will most likely live in something akin to fascist/feudal societies that have a relatively low standard of living and quality of life for most of their members.  That’s my hunch.  I could be wrong.  But I’m probably accurate enough to be annoying about this one.

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4 thoughts on “A Late Night Thought on Capitalism

  1. Capitalism. Free markets. Power. Ayn Rand, who appears to have worshiped raw power. And fools like Milton Friedman and his acolytes who worshiped Ayn Rand.

    Plus, who the hell is Adam Smith?

    His damned “invisible hand” seizes us by the throat and throws many fools into frenzies of passion.

    I just wish the damned old man would take his “invisible hand” off my throat.

    I may be too harsh on the old fellow. He wrote in the obscure (easily misunderstood) language of the 18th century and published his memorable book, “Wealth of Nations,” in the year of our nation’s nativity.

    The infamous quote about the “invisible hand” is almost always edited to omit certain critical phrases:

    “By preferring the support of domestic to that of foreign industry, he intends only his own security; …”

    focusing primarily on the following words:
    “and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.”

    Presumably this selective editing is to justify the selfishness and self-interest pf the striving capitalist above the interests of all others.

    I happen to believe that everyone is entitled to their own self-interest, including women, children and the working class — and possibly animals and other forms of “lower” life on this planet. If the self-interest of the working class is in conflict with the self-interest of the capitalist, it must not follow that the working class must capitulate to the “superior” self-interest of the capitalist.

    Ah so, I could go on a bit about the way that capitalism has destroyed ancient family structures … but another time.

  2. Blast! I forgot to comment on that omitted phrase, “By preferring the support of domestic to that of foreign industry, he intends only his own security,” which many believe refers to protectionism, as well as those hated tariffs.

    While renegade capitalists go their merry way twitting about the “unfettered free market of globalism,” unrestrained by national boundaries, regulation of any sort, untaxed, a wondrous world of renegade commerce free to rape and pillage at will, resulting in an ever-widening chasm of societal and economic between enormous wealth and devastating poverty.

    Free trade. Free traders or smugglers. Pirates. Vikings.

    I am a actual child by blood of Vikings who, though they may have had their moments of decency, were not well loved by most of Europe. We certainly worship their spiritual descendants these days.

    The world of commerce is lawless, seeks to be ungoverned, a world of madness, pure bedlam. The very separate world of poverty mirrors the lawless world of commerce as it strives to survive by means of murder, thievery, rape and piracy … as the gap increases the two worlds become more extreme in their criminality.

  3. My God! I cannot escape from this huis clos.

    Here’s the reason:

    “Growing Use of Contractors Added to War’s Chaos in Iraq
    By JAMES GLANZ and ANDREW W. LEHREN
    Published: October 23, 2010
    …. The documents sketch, in vivid detail, a critical change in the way America wages war: the early days of the Iraq war, with all its Wild West chaos, ushered in the era of the private contractor, wearing no uniform but fighting and dying in battle, gathering and disseminating intelligence and killing presumed insurgents.

    “There have been many abuses, including civilian deaths, to the point that the Afghan government is working to ban many outside contractors entirely.

    “…. Contractors were necessary at the start of the Iraq war because there simply were not enough soldiers to do the job. In 2004, their presence became the symbol for Iraq’s descent into chaos, when four contractors were killed in Falluja, their bodies left mangled and charred.

    “Even now — with many contractors discredited for unjustified shootings and a lack of accountability amply described in the documents — the military cannot do without them. There are more contractors over all than actual members of the military serving in the worsening war in Afghanistan.”

    The unfettered greed of capitalism and the resulting chaos…

    I swear to you that I am half in love with Julian Assange for his exposure of these travesties of capitalism and the wars it wages in its thrust for total domination.

  4. In my opinion, we’ll be lucky if we get to live in these “fascist/feudal” societies you mentioned. My fear is that we will degenerate into total anarchy and chaos. As for improving the situation, I don’t think that’s going to happen.

    Then again, I could be wrong. It would be nice to be proven wrong on this one.

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