What’s Wrong with Capitalism? 2: The Love of Money

Posted on November 8, 2009 at 4:48 pm,

dollarsignThis is the second in my series on what’s wrong with Capitalism. I started with some Definitions, to help any readers who aren’t familiar with Capitalism and the ideas surrounding it.

The Bible talks a lot about money, and the main thrust of what it says is that, although money and possessions are good things, loving either is both sinful and bad for us. Hebrews 13:5 says this:

Keep your life free from love of money and be content with what you have, for he has said, “I will never leave you or forsake you.

Loving money gets in the way of our relationship with God and our ability to enjoy the good things in life.

So what does this have to do with Capitalism? Well, one of the most fundamental problems I have with Capitalism is that it both encourages and depends on this particular form of idol worship.

Capitalism Depends on the Love of Money

Whilst it is possible to imagine a free-market economy which does not depend on people wanting more and more stuff they don’t need, such a system is not the one we have. Capitalism is built on the idea that people acting in their individual economic best interest (i.e. doing as much as possible to increase the amount of money and stuff they have) is in the best interests of society. This is the core of the neoliberal approach to economics which dominates policymaking in the modern world, and can also be found in Adam Smith’s book The Wealth of Nations – the book that, essentially, created the Capitalist approach to economics.

In addition to this, Capitalism depends on economic growth in order to survive. Economic growth basically means that there is more money being spent than there was this time last year. I’ll come back to the problems with economic growth later in the series, but for now we just need to note that – except in the poorest societies – economic growth can only happen when either people or businesses spend more money on nonessentials. In other words, if people aren’t chasing after the latest fashion or the newest gadget, then everything grinds to a halt.

When a Capitalist economy isn’t growing, then it enters a recession or a depression. People lose their jobs, otherwise healthy businesses go bust, and people get far more anxious. This is, in fact, built into the structure of capitalism in the form of the boom and bust cycle. In the boom portion of the cycle, the economy is growing, and people start saying that something is a sure investment that will keep growing in value. As a result, lots of greedy people put their money in, and then eventually everything goes pear shaped, the value collapses in a very short period of time, and the economy starts shrinking again. This, in turn, leads to ordinary people who had nothing to do with it suffering.

Capitalism Encourages the Love of Money

Under a Capitalist system, businesses that make less profit than their competitors are frequently bought up by their competitors, or can be undermined by them. This means that every business has an incentive to make as much profit as they can. Which, in turn, means that they are committed to promoting consumerism, As a result, millions, if not billions, of pounds are spent on advertising that tries to convince us that our lives will be complete if only we had whatever product they happen to be selling. And over time this message becomes ubiquitous. It’s there on TV and radio, in newspapers and magazines, on billboards and buses, and of course it’s all over the internet.

Now there are ways to ditch advertising and other incitements to consumerism without ditching the Capitalist system, but instead of just banning advertising, society may well be better off reforming or replacing the system that both relies on and encourages us to covet things we don’t need and chase after riches in the vain hope that they will miraculously make us happy and fulfilled.