The root of all evil, of strife and upheaval

At brunch with my new um...friend on Saturday, we chatted about what everyone in romantically ambiguous relationships discusses over eggs the morning after: capitalist economic philosophy.

Okay, so that's overstating it a bit in that "capitalist economic philosophy" makes it sound like something greater than what it is, which is me trying to make financial sense of the world. The main topic came up because my companion, M¹, works at Fannie Mae, who has been able to cook up a way to provide mortgages to low-income folks and make money at doing it. It's win/win for everyone: people in need are being provided for, and a company's success in providing for those people has a financial benefit.

So we headed out on a debate of the motivation of people and companies, of how much social works can be privatized so that charity is given while profit is made. And M took the same side of the debate that my friend Weston always took when the subject came up: that business and science will, given a total laissez faire capitalist economy, find ways to correct social ills once they've found ways to make it profitable, and that letting them find those ways is the best cure, instead of forcing the public to take care of it with either their taxes or pressure to be concerned.

In the Fannie Mae example, it works like a charm, and given the choice between that model and having the government take care of providing for those in need, I'll take the former any day. I believe in the concept of capitalism, in the idea that people need incentives to work, and that greater profit is as good an incentive as any.

But I also feel that it's something that needs as much regulation as anything. It's naive to believe that everything can ultimately solved by making it profitable. What possible alternative could be cheaper for a company than dumping chemicals in a river? What ways could you have to make recyling profitable for individuals who feel that it's more of a pain than it's worth?

Charity-for-profit is just not possible in a lot of cases. Even the initial move of wanting to look for a possible profitable solution is something that requires a level of social concern, and some social problems would take such a shrewd business model to make it profitable that it would require an incredible perserverance to make that model work. And why would someone continue to search for a way to make something profitable when the answer isn't quickly clear, and when there's so many other things that can be done for profit?

I'm reminded of another debate that I'll get into often: One of the arguments that's made by people saying that slavery was not the chief cause of the American Civil War is that slavery would have soon outlived it's economic usefulness, that it was destined to become too much of a financial burden to clothe, house and feed slaves, and even without the Civil War, slavery wouldn't have lasted much longer than it did. Even accepting that this is true, why should anyone have to put up with something that is unjust and hurtful on the unfounded belief that economics will eventually correct the problem? There are some problems that need to be solved quicker than "eventually", and these are often problems that have no other solution than government intervention and/or pressure on individuals to do the right thing. If Business can figure out a way to correct it with profit, then everyone wins. But why should we wait around for that day on the naive assumption that profit (or lack of) can fix everything?

I actually admire the Reagan-esque economic optimism that the "anything can be profitable" thinkers have. If we could make fighting pollution, crime and homelessness profitable, then who wouldn't want that? But it strikes me as too convenient, too naive and too dangerous to assume that making money can solve any problem eventually. Even without taking irresponsibility and greed into the equation (because they're problems with any system), it's just shouldn't be the first course of action in political problem-solving.

¹ Please note that it's not the same M who sang the early 80's "Pop Musik". My relationship with that M isn't ambiguous at all: I love that song.