This essay is part of a series of essays for ChatGPT-generated economics class titled The History of Modern Economic Thought. Read more about the project here and become a subscriber to get updates.
Amazing writing, Amanda. I didn't know I could have my own writing graded by a computer! I'll give it a try, love the idea.
I read this article, and then (perhaps not by chance) a Youtube video from a channel called "Laura's Farms" popped up on Youtube. This young woman Laura and husband just paid about $10,600/acre for 80 acres of Nebraska farmland, financed for 30 years at around 7%. With a great deal of effort and no serious weather losses, injuries or illnesses, they should clear about $5-10,000/year from that 80 acres. I wouldn't wish that life on anyone.
I need to check that YouTube channel out! I'm very interested in seeing people return to homesteading/farming. It's not for everyone, but there seems to be a tremendous reward to putting in the work and literally cultivating the fruits of your labor.
"While Malthus accurately anticipated limits to growth, he failed to consider how concurrent technological advances could refute his hypothesis. "
I think the second part of the sentence negates the first. Malthus wrong because he failed to consider the drive for innovation and progress that would solve the problems of feeding the growing population.
And this gets to the point about capitalism running its course. There is not really a book on capitalism other than what Smith first wrote.
Smith was not an economist; he was a philosopher. He was also – as were many leading thinkers during his time during the 17th and 18th century Enlightenment period – a strong moralist. His first book, “The Theory of Moral Sentiments” sets the stage for his overarching moral perspectives on capitalism. Ironically it has also fueled “scholarly” debates divided along ideological lines. One side inaccurately suggests Smith’s work from his first book, which supposedly assumed altruistic human motivation, contradicts his writing in Wealth of Nations which allegedly assumed egoism. The other side gets it wrong too – and more destructively so with respect to the ongoing health of this thing called capitalism – in assigning the entire definition of capitalism to a sort of self-serving interpretation that the rights of pursuit of self-interest are nearly absolute and all restrictions to profit and earnings should be eliminated.
These two moral extremes: egalitarianism, and egoism – the view that the system either takes care of everyone or everyone should be free and expected to take care of themselves – have defined the primary ideological battles throughout most of modernity. And with respect to the view of Smith and capitalism, both get it terribly wrong.
Smith recognized that capitalism was primarily a social system. In fact, Smith never really uses the term “capitalism” but refers to the thing as “commercial society”. His view was that economics was a very important component of the overall human condition. However, he concludes that any working economic system within a moral and just society must concern itself with its least well-off members, not just those with economic success. Smith viewed the market, the free market, as a mechanism of morality and social support, not just a means to an end for individual wealth generation.
What we have today is corporatism not capitalism. We actually had a movement toward a globalist corporatocracy, but that appears to be on the ropes with the Election of Trump who agrees that the US should cancel the US-funded Global Order.
Capitalism is still fine in my opinion, if we get back to what it is and is supposed to be. The consolidation of our food production and distribution to a few massive corporations isn't it. We need to get back to more small producers in support of competition for better value (quality-to-price). There are too many middlemen looting from the supply chain... a supply chain that should be shortened to producer-consumer when every possible.
Thank you so much for this well thought out response. You raise a great point about the relationship between early capitalist thinkers and morality. That's an important context because it shows what end capitalism was a means to. It was never about individual wealth generation, it was about the well-being of the society and the nation as a whole. Everyone had a role to play in making that happen, even the elites.
I think we've failed to adequately contextualize the emergence of capitalist thought from the period of history in which it originated. When you look at how society was structured at the time, a lot of the arguments made sense.
Today, we live in a different context where capitalism doesn't neatly fit anymore. I think property ownership and using capital to innovate is fundamentally good. But at some point the profit motive turns capitalist enterprises into parasites. Big Phamra, Big Food, and Big Tech are all big for a reason.
I think we have to find a balance. Economies at the community level -- Main Street-- are fundamentally different than the capital economy of Wall Street. Maybe a hybrid approach is the solution.
Antitrust cases from the DOJ and FTC need to happen. We need to rewrite the rules to make decisions to deny corporate consolidation and to break up large corporations. Lina Kahn had it right… probably the only Biden Admin agency head that was doing the job as intended. But she was often blocked by the DOJ.
Just look at the politicians trying to defeat RFK Jr. from becoming the head of Health and Human Services. They are defending big pharma. Our politicians cater to the big corporations because the bigs donate to their political campaigns or otherwise help fill their bank accounts. That has to stop.
The old precedent for a single business with over 50% ownership of market share needs to be updated to consider the competition health of that market. If there are a few large corporations dominating the market (more than 50%), and or a few are dominating other aspects of the supply chain, then the the largest of those should be blocked from mergers and acquisitions, and the DOJ and FTC should consider forcing them to divest or risk being broken up.
None of this is anti-capitalist. Capitalism was never conceived to be a pure libertarian system. It is the economic appendage to a larger social system. If the economic appendage goes haywire it adversely impacts the social system… and thus justifies intervention to prevent it from going haywire.
It's interesting, Adam Smith and other early capitalists talk about the inevitability of monopolies and the risks they pose on the market. We have precedent for big monopolies forming in the 19th and 20th centuries to validate these concerns. It's only recently that politics seems to have gotten in the way. What people in power seem to realize is that monopolies stifle innovation in growth. So while they receive a short-term gain (donor dollars), it'll hurt everyone in the long run.
I'm reading and writing, just as I would in a regular college class. I'm not using ChatGPT to feed me information and I'm not relying on it as a source of facts.
ChatGPT is playing the role of my professor. It's assigning me the essay topic and grading me based on the response paper I write. It's also providing me with feedback on areas I can improve. For example, in a previous essay it dinged me for considering counter arguments. I asked how I could improve my critical thinking skills and it gave me several books, YouTube videos, and free online courses. To be honest, I think learning in and of itself could be a whole course.
Amazing writing, Amanda. I didn't know I could have my own writing graded by a computer! I'll give it a try, love the idea.
I read this article, and then (perhaps not by chance) a Youtube video from a channel called "Laura's Farms" popped up on Youtube. This young woman Laura and husband just paid about $10,600/acre for 80 acres of Nebraska farmland, financed for 30 years at around 7%. With a great deal of effort and no serious weather losses, injuries or illnesses, they should clear about $5-10,000/year from that 80 acres. I wouldn't wish that life on anyone.
Great work, thanks.
I need to check that YouTube channel out! I'm very interested in seeing people return to homesteading/farming. It's not for everyone, but there seems to be a tremendous reward to putting in the work and literally cultivating the fruits of your labor.
Thanks for this.
"While Malthus accurately anticipated limits to growth, he failed to consider how concurrent technological advances could refute his hypothesis. "
I think the second part of the sentence negates the first. Malthus wrong because he failed to consider the drive for innovation and progress that would solve the problems of feeding the growing population.
And this gets to the point about capitalism running its course. There is not really a book on capitalism other than what Smith first wrote.
Smith was not an economist; he was a philosopher. He was also – as were many leading thinkers during his time during the 17th and 18th century Enlightenment period – a strong moralist. His first book, “The Theory of Moral Sentiments” sets the stage for his overarching moral perspectives on capitalism. Ironically it has also fueled “scholarly” debates divided along ideological lines. One side inaccurately suggests Smith’s work from his first book, which supposedly assumed altruistic human motivation, contradicts his writing in Wealth of Nations which allegedly assumed egoism. The other side gets it wrong too – and more destructively so with respect to the ongoing health of this thing called capitalism – in assigning the entire definition of capitalism to a sort of self-serving interpretation that the rights of pursuit of self-interest are nearly absolute and all restrictions to profit and earnings should be eliminated.
These two moral extremes: egalitarianism, and egoism – the view that the system either takes care of everyone or everyone should be free and expected to take care of themselves – have defined the primary ideological battles throughout most of modernity. And with respect to the view of Smith and capitalism, both get it terribly wrong.
Smith recognized that capitalism was primarily a social system. In fact, Smith never really uses the term “capitalism” but refers to the thing as “commercial society”. His view was that economics was a very important component of the overall human condition. However, he concludes that any working economic system within a moral and just society must concern itself with its least well-off members, not just those with economic success. Smith viewed the market, the free market, as a mechanism of morality and social support, not just a means to an end for individual wealth generation.
What we have today is corporatism not capitalism. We actually had a movement toward a globalist corporatocracy, but that appears to be on the ropes with the Election of Trump who agrees that the US should cancel the US-funded Global Order.
Capitalism is still fine in my opinion, if we get back to what it is and is supposed to be. The consolidation of our food production and distribution to a few massive corporations isn't it. We need to get back to more small producers in support of competition for better value (quality-to-price). There are too many middlemen looting from the supply chain... a supply chain that should be shortened to producer-consumer when every possible.
Thank you so much for this well thought out response. You raise a great point about the relationship between early capitalist thinkers and morality. That's an important context because it shows what end capitalism was a means to. It was never about individual wealth generation, it was about the well-being of the society and the nation as a whole. Everyone had a role to play in making that happen, even the elites.
I think we've failed to adequately contextualize the emergence of capitalist thought from the period of history in which it originated. When you look at how society was structured at the time, a lot of the arguments made sense.
Today, we live in a different context where capitalism doesn't neatly fit anymore. I think property ownership and using capital to innovate is fundamentally good. But at some point the profit motive turns capitalist enterprises into parasites. Big Phamra, Big Food, and Big Tech are all big for a reason.
I think we have to find a balance. Economies at the community level -- Main Street-- are fundamentally different than the capital economy of Wall Street. Maybe a hybrid approach is the solution.
Antitrust cases from the DOJ and FTC need to happen. We need to rewrite the rules to make decisions to deny corporate consolidation and to break up large corporations. Lina Kahn had it right… probably the only Biden Admin agency head that was doing the job as intended. But she was often blocked by the DOJ.
Just look at the politicians trying to defeat RFK Jr. from becoming the head of Health and Human Services. They are defending big pharma. Our politicians cater to the big corporations because the bigs donate to their political campaigns or otherwise help fill their bank accounts. That has to stop.
The old precedent for a single business with over 50% ownership of market share needs to be updated to consider the competition health of that market. If there are a few large corporations dominating the market (more than 50%), and or a few are dominating other aspects of the supply chain, then the the largest of those should be blocked from mergers and acquisitions, and the DOJ and FTC should consider forcing them to divest or risk being broken up.
None of this is anti-capitalist. Capitalism was never conceived to be a pure libertarian system. It is the economic appendage to a larger social system. If the economic appendage goes haywire it adversely impacts the social system… and thus justifies intervention to prevent it from going haywire.
It's interesting, Adam Smith and other early capitalists talk about the inevitability of monopolies and the risks they pose on the market. We have precedent for big monopolies forming in the 19th and 20th centuries to validate these concerns. It's only recently that politics seems to have gotten in the way. What people in power seem to realize is that monopolies stifle innovation in growth. So while they receive a short-term gain (donor dollars), it'll hurt everyone in the long run.
This creeps me out. This is AI and you writing on a topic, correct? Something is off about it and I can not point to something specific. Just unease.
Can you elaborate more?
I'm reading and writing, just as I would in a regular college class. I'm not using ChatGPT to feed me information and I'm not relying on it as a source of facts.
ChatGPT is playing the role of my professor. It's assigning me the essay topic and grading me based on the response paper I write. It's also providing me with feedback on areas I can improve. For example, in a previous essay it dinged me for considering counter arguments. I asked how I could improve my critical thinking skills and it gave me several books, YouTube videos, and free online courses. To be honest, I think learning in and of itself could be a whole course.