Question/Comment: Is this true?:
The problem of social organization is how to set up an arrangement under which greed will do the least harm; capitalism is that kind of a system. (Milton Friedman)
Paul Solman: Could be. But the tougher question is: What kind of capitalism? That is, how much of the cost of social organization does the collectivity have to bear? “Pure” capitalism means what, exactly? No government at all? No rules? Even libertarians believe in a minimal, so-called “night-watchman” state. Without some rules, and someone to enforce them, there’s just too great a likelihood of a Don Corleone state, with rival bands “going to the mattresses.”
So there is no such thing as “pure capitalism” (except in Ayn Rand’s books), no completely “free” market.
Here’s another problem with capitalism, which for purposes of
convenience let’s define as a “market-driven system”: What about the
possibility that capitalism actually promotes greed?
I may have written this before, but even if so, it bears repeating:
all successful systems – from bacteria colonies to human economies –
seem to depend on a dynamic tension between competition (“greed”) and
cooperation. In an all-cooperative society, predators crop up who can
take advantage. But an all-competitive society opens the door to
cooperators, who can band together for their mutual gain while the
greedy are at each other’s throats. (See Robert Axelrod’s class “The
Evolution of Cooperation” and Robert Frank’s “Passions within Reason”
for more detail.)
In today’s environment in the U.S., as
capitalism is currently being practiced, I guess the question I’d ask,
playing off Friedman: has greed been doing the least harm it can?
Meanwhile, thanks for proving just how long-winded I can be when not
restrained by time or editors. The above answer, my calculator informs
me, is 8.6 times as long as the question.