The Values of Capitalism – Does it really constitute the good life?

Recently, Nicolai Tangen, the CEO of Norway’s $1.6 trillion oil fund, made an interesting remark, stating that “Americans just work harder (than Europeans)”, and “We (Europeans are not very ambitious”. It has created controversy, naturally, but at the heart of his statement lies a fundamental assumption – that the values of capitalist America push the world in the right direction.

It is crucial to understand the lens behind Mr. Tangen’s point of view. From an investment perspective, there is a natural tendency to focus on what Tangen calls “hard work” and “ambition”, as the financial markets work on the basis of corporate prosperity. One wants the shares to go up in value, the companies’ financials to become better, and drive economic gains. But, the values of capitalism, which may seem beneficial for the markets, are they really serving the purpose of creating the good life for citizens?

There’s a reason that Adam Smith talked of market economics as “the invisible hand”, whereas Keynes chose to utilize the more renegade term “animal spirits”. The invisible hand conjures up an image of a benevolent benefactor, but instead, markets progress by the animal instincts and drives that fuel human beings. It reflects the pursuit of material success rather than the varied array of important human indicators, bearing the notion of homo economicus versus the actual homo sapien. Further, in Das Kapital, Marx talks of capitalism fostering the animal spirits of the workers, by means of sociological forces, i.e., creating a kind of competition between workers to engender the propulsion towards greater output. We see free rein being given to the excesses that may result, with “abdication of responsibility” occurring. This is because the idea of markets is a construct, an intersection of socio-economic forces, and therefore little clarity exists on what or who is responsible for the many adverse outcomes that happen.

The fundamental Kantian principle of humans being an end in themselves gets violated, as the conditions of wellbeing are ignored, and humans are merely seen as the means to an end of greater production and corporate money-making. After all, why would anyone want the world to be driven by animal tendencies, rather than what makes us human, is the moral crisis that capitalism faces.

A delightful example of America sticking to its capitalist values despite the sheer ineffectiveness and inadequacies that might arise, is the US healthcare system. With its neighbor, The Great White North spending only 10.4% of its GDP on healthcare, as opposed to the US spending 17.8% of its GDP, still Canada manages to perform better in basic health metrics like life expectancy and infant mortality. Yet, why doesn’t the healthcare system improve in the USA? The answer lies in the American values of capitalism that are adhered to steadfastly.

In fact, a beautiful thought, which best represents this idea, was put forward by Prof. Mark Pauly, Professor Emeritus of Healthcare Management at the Wharton school. He said, “In one sense, what Americans can learn from Canadians is nothing, because we don’t share the same views of society as they do”. And therein lies the insight, because for all its faults, the American healthcare system reflects the values that the US stands for, with it being a majorly private and multi-payer model, whereas Canada follows a majorly government-funded single payer model. With a universal access to healthcare design, insurance coverage is not according to your job or income in Canada, and the population reports high levels of satisfaction with the system. But the key aspect underlying both, is that there are differing answers to the questions of an individual’s right to the extent of healthcare that he/she deserves, and who holds the monetary obligation for the same. The differences arise due to the contrast in the values embodied, even between nations like the US and Canada that are supposed to be culturally similar.

What is the aim of the perceived hard work and ambition that America supposedly flaunts in a gallant fashion? Well, there is a beautiful essay named “Obituary for a Quiet Life”, written by Jeremy Jones, a professor at Western Carolina University. It reveals to us what we have taken for granted for so long, that the fulfilment of life lies in always painting an aspiration for more and more, in terms of whatever our definition of success is. Being notable in any way possible is a strong motivating force, with the glitzy accompaniments of money, fame, and other things.

However, what we fail to realize is that this is simply a version of the world presented to us, and that version may not be necessarily correct! Jones perfectly describes the notion as “the sheer audacity of a quiet life”. Whether one has lived the good life, isn’t determined by what is traditionally seen as doing something great, eg: being a CEO, or an actor, and so on, but whether one has impacted the spheres of influence in one’s life positively. It could be something as simple as helping out your neighbor in a time of need, and such a life means you did well mate! Contentment emerges automatically, without needing any sort of media or interpersonal validation. We ought to understand that the current paradigm of living life is heavily influenced by capitalist ideals of society, and that there are multiple paradigms on the optimal approach to get the best out of life. Just ponder, for example, a goal for true pursuit of knowledge, like becoming a mathematician, or a philosopher for that matter, is very rare in today’s world. All the standard functions of society are performed by unseen workers, which ironically, nobody would want to become. Or one could even think like novelist Amor Towles, who poetically wrote, “By the smallest of one’s actions, one can restore some sense of order to the world”.

Perhaps the Bolsheviks had their heart in the right place, but took their actions in the wrong direction. From the pretty peasant in her tunic and kerchief, after a look of aspiration at the West and a perceived feeling of inferiority, it changed to shops with high-heeled shoes and wide-brim hats, drawn to glamour and luxury that the Western media so fervently admires. It wasn’t the age of the common man as pictured, but just a continuation of being the indigent rival of the West. Alas, if only the enlightenment that the West was already poor in its values was present, we would have perhaps had the fortune of viewing a society aligned with humanistic virtues and ideals.

A closing aspect would be the thought that we all should reflect closely on what are we really working towards. A study by researchers from Universitat Autonoma de Barcelona and McGill University has shown that the economic engines of industrialization aren’t the key for life satisfaction. Communities in indigenous areas like Western Highlands, Guatemala, and Amambay, Paraguay have levels of life satisfaction similar to those of wealthy countries. Therefore, I think it is high time we start revisiting the purpose of economic growth in creating the good life, and move away from the values that capitalism espouses, to those which are closer to happiness, wellbeing, and a journey experienced in the inclusive spirit of community – the true good life.