Human Psychology and The Economy
Capitalism the best thing that can exist as an economic system, why? because since prehistoric times, individual trading for fulfilment of the necessity of demand is the primary motivator for human society to grow as well as it has, since the age of hunter gatherers, they hunted, they gathered sometimes pillaged and they traded. It is as fundamental a trait of society as clothes. Any other economic system that opposes capitalism still factors in trade when generating means of production, now there may be a debate as to how the means of production can be fairly distributed among people. But it is universally regarded that trade can’t stop. Because demand for a better life always exists and will continue to exist. This basic trait is exploited by modern day capitalism and it therefore results in things such as consumerism and blind disregard for regulations and ethics. Corporations will always look to profit, and the very nature of shareholder capitalism forces it to expand or vanish. But there is a considerable amount of doubt that ‘stakeholder capitalism’ is a viable option, because the same factors of profit hunting keep its place, but more needs to be looked into.
Today we’re gonna look at the effect of human psychology, greed, ambition, the American dream, whatever your version is, the desire to generate wealth. Basic capitalism works like this, you cater to a demand, the demand is met, you expand, and by meeting a menad you can generate wealth by providing that service. Institutions such as the banks and the stock market are supposed to act as a tool to help companies flourish in this role of meeting the demand of society. But companies are greedy by nature, and fake creating demand is sometimes not an ethical process. Think of amazon prime, getting delivery in a day, you probably won’t even mind if a book you ordered came at your doorstep 3 days later, but the overcompensation of a need that probably doesn’t exist is a blatant example of expansion centric capitalism has the greatest setbacks.
But now you have tasted it, even if amazon tells you considering ethical reason they wanna back out of the comforts that prime provides and they would treat their workers with dignity, you would feel you’re missing out on something, and in the next day if 4 other small companies pop up that can meet that luxury need that was previously manufactured by amazon, they would capture that market as in capture your comfort seeking tendencies easily. So the problem is once the gene is out of the lamp, it’s impossible to put it back in. The hunt for more and more and more is always present. This is how capitalism banks on greed.
Banks And The Stock Market
Let’s now look at the institutions that cater to capitalism. And are supposed to help generate wealth, The Banks, In principle the banking system is a genius innovation, give loans to people who have better ideas, help them to generate wealth, become more fluffy in that process. But in modern days banks are not just crediting institutions, they’re also involved in the stock market buying and selling debts. And this leads us to the Stock Market, what a mind-numbing concept, invest in the companies that seem great to you and can afford, but there lays the problem, the powers that be, the bulls and the bears in the name of keeping things fair, manipulate the stock in their own ways, and when the bubble bursts, they get bailed out because all of the economical institutions play this game, even international governments. The public still has mass hysteria regarding this complicated system, first of all you don’t teach this in school, you make it so complicated that without an MBA or any other degree in business it’s hard to understand, and betting on a fugazi such as “prospects” and making money of it and reinvesting it is the reason when “prospects” don’t meet the demand it comes crashing down and makes everything messed up.
Self Control
So how do we come out this mess, and how you as an individual can keep yourself safe from this greed cycle, the very thing that got us into this mess, call it greed or ambition can get us out, an ambition to game the system and that principle can be called ‘not to buy stuff you don’t need’. Think about consumerism, read about money, learn about the economy, learn why the stock market does not reflect the true picture of the economy. As you educate yourself on money, your psychology is bound to change. You should keep in mind that each dollar should have a tangible asset that can be felt and traded. Go back to the roots of what made this process great.
Controlled Capitalism
All the devastating problems you see in this world can be solved through controlled capitalism, rather than supporting 10 companies wildly operating in different spaces, an effort should be made to create incentives that cater to the greater cause rather than segmented problems solving, this may be implemented in combating tragedies such as climate change. One great example is a proposal for carbon tax, lower taxation for car batteries, lower interest for credit for companies in the green energy sectors. Regulations need to be put in place and only through controlled capitalism all of these problems have a path to be solved.
