I came around watching the April 5th U.S. Senate Budget Committee hearing titled “Corporate Profits Are Soaring as Prices Rise: Are Corporate Greed and Profiteering Fueling Inflation?” chaired by Bernie Sanders.
Clear The Air
“Let me be clear,” Sanders said, as the statement to precede almost every one of his opening salvos. “The American people are sick and tired of corporate greed. They are sick and tired of being ripped off by corporations making record-breaking profits. They are sick and tired of being forced to pay outrageously high prices for gas, rent, and food while large corporations make out like bandits.”
“We cannot continue to allow large, profitable corporations to use the war in Ukraine, the Covid-19 pandemic, and the specter of inflation to make outrageous profits by price-gouging Americans in every sector of our economy,” adding “It’s time we discuss how corporate greed and profiteering are fueling inflation.”
Sanders rattled off statistics to cement his observations: “Across every major industry, prices continue to rise — this includes a 38% increase in the price of gasoline, a 44% increase in the price of heating oil, a 41% increase in the price of a used car, a 24% in the price of rental cars, and a 17% increase in the price of furniture. Further, Tyson Foods recently increased beef prices by 32%, the price of chicken by 20%, and the price of pork by 13%. As prices increase, corporate profits hit a record high of nearly $3 trillion in 2021, up 25% in a single year.”
64% of Americans are now living paycheck to paycheck. Bernie’s opponents would surmise they are all just lazy. I know not. Does it not dawn on everyone how the capitalism we preach around the world as the best and only thing since sliced bread is not quite working as advertised?
To fix this mess we cannot act like a nurse putting bandages on every gaping wound of a cancer patient, and pretend the Ending Corporate Greed Act as the post-mortem resolution to two-hundred years of laissez-faire market constructs will save the day. We must begin to address the root cause of the problem and crawl out of the deep rabbit hole we in blissful ignorance have created for ourselves.
Capitalism, in its current form, is not a system but a symptom. It is simply the exchange of money for products or services rendered, with investment firms banking on the post-money valuation increase of that exchange. Some 22 trillion dollars of it, nearly equivalent to America’s GDP, is arbitrated by just three asset management firms, BlackRock, State Street, and Vanguard.
The problem with capitalism is that it is not a system, as a system uses an embedded theory that converts a selection of input into the desired output, as in a combustion engine where the theory of combustion turns gasoline into torq for a car to drive.
The outcome of our current version of capitalism damages the renewal of humanity, meaning the theory of capitalism is broken or, worse, missing. In the same way, an engine without a well-defined theory of conversion would not move the car in the direction pointed. And without a theory, there is no chance a random or laissez-faire selection of input will produce the expected output.
Back All The Way Up
To build any system, we must implement the following hierarchical structure:
Theory => System => Rules => Enforcement
We must finally admit to ourselves that the mess we create results from not having a theory of capitalism today. And therefore we have no system of capitalism today. We attempt to compensate for that omission by inducing a plethora of mind-numbing rules and desperate acts, like the new one Bernie Saunders is proposing, to infer a theory to the gullible pool of activists in society.
Change at the top, at the beginning of our self-made rabbit hole is required.
Greed Is Good
Anybody who has ever built marketplace systems will understand how the paradoxical rules to protect freedom are pretty much the same in every system of humanity we build. For the simple reason, participants’ behavior is pretty much the same. Greed, of any kind, will therefore always exist, no matter what game in life we play.
Capitalism is not to blame for greed, a lack of an evolutionary compass for capitalism is. The theory of gameplay determines what can be discovered, in the words of Albert Einstein. And when we deploy a theory of capitalism by which every dollar is converted into improved human adaptability to nature’s entropy, the greed of a few becomes our collective benefit.
The excellence of human efficacy is determined by nature, not by us. And thus, to systematically improve the opportunity for all, we must adhere to the first-principles of nature to deploy a theory of capitalism that converts a selection of input to the collective improvement of human adaptability we strive for.
The capitalism we do not want is our current. Nor will it be the one Bernie Sanders proposes by putting endless bandaids on the undesirable wounds of centuries-old expired truths and precedents. We must theorize, normalize, and govern anew.
Let me tell you how.