Self-interest vs Selfishness: Adam Smith’s Capitalism

By Comrade Gombakrock

Capitalism is the cause of the current financial crisis!!! During the current financial debacle, capitalism is being blame as the main culprit.. Although I’m a leftist and would welcome and applaud any attack on capitalism, however the truth is capitalism is not at fault. The ones at fault here are the Capitalists. The is a major difference between capitalism and capitalists.

Obviously capitalism is a system and capitalists are the “followers” of capitalism. For example, Pol Pot is a communist. However does communism allow the genocide that Pol Pot ordered in Cambodia? Does communism allow the murders and killings that were done by Stalin (this guy kill more people than Hitler!!)???

It was the capitalists who allowed the rampant consumerism that causes the credit crunch and sub-prime crisis. Why did they allow this? Simply because they are greedy and selfish. In their opinion, it’s alright to make a few quids at the expense of others. In their view this is what capitalism is all about…Well,they are wrong…BLOODY WRONG!!

Adam Smith is one of my heroes and to honour his legacy I’m going to set the record straight. Everyone knows that Adam Smith is the father of modern economics and the founder of capitalism. However how many of you know that he was a moral philosopher and taught morality and ethics. This fact is often conveniently left-out by the capitalists.

Long before Adam Smith wrote the monumental “An Inquiry into the Nature and Causes of the Wealth of Nations”, he wrote a book on morality titled “The Theory of Moral Sentiments”. We can only understand Adam Smith’s idea of the pursuit of self-interest if we read “The Theory of Moral Sentiments”. However, Adam Smith’s view on self-interest is heavily distorted and today is viewed as selfishness. This is far from the truth.

Adam Smith based his view of self-interest on his idea of the social looking glass. Adam Smith states the idea of the social looking glass, as “man by nature is a social animal. He has to live in a group or society. For that he must have the feeling that people around him like, admire and have a good opinion about him”. The idea of the social looking glass will keep the pursuit of self interest in control.

In Smith’s earlier “The Theory of Moral Sentiments”, selfishness is transformed. Man is able to put their selves in the position of a third person, an enlightened impartial observer, and in this way man will have empathy for someone in trouble, thus controlling their pursuit of self-interest.

In Smith’s “Wealth of Nations”, the individual pursuit of self-interest in a two-way exchange economy guarantees social harmony. In his economic behavior, an individual neither intends to promote the public interest nor does he know that he is promoting it. He intends only to provide for his own security. Adam Smith famously wrote, “It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard to their own interest. Such self interest and economic self reliance were perfectly natural, grounded in the desire of bettering our condition, which comes with us from the womb and never leaves us till we go into the grave.”

In other words, we always put our self-interest as our main priority. However, it is in our self-interest not to “harm” others as in doing so we wil have a good image. If the capitalists really embrace the idea of “pursuit of self-interest”, there will be no credit crunch,sub prime crisis, speculation and NO FINANCIAL CRISIS dare I say. The fact is, recessions are cyclical however financial crises are man-made.

Capital of Malaysia?

In Malaysia, Anwar Ibrahim has pledged to defend and promote free-market economy, foreign investment and continue the development process. But how much do Malaysians know about the free market economy? Are Malaysians appropriately educated about economic models? Does Malaysia have experts in economy? What economy is Malaysia currently in? To answer the above questions in simple terms, Malaysians are ill educated in a vast field of knowledge including science, mathematics, and economics. Many Malaysians only have heard of the leiser-feire economic model as it was taught in schools. Malaysians hardly hear of the social democratic model, Scandinavian model, or even the Singaporean model. Yes, Malaysia has a few economic experts of international standards, and one of the most prominent is Dr. Jomo Kwame Sundaram. Malaysia is known to be a nation with crony capitalist economic model.

Why would Anwar Ibrahim pledge to defend and promote free-market economy? A good example of free market economic model would be the United States of America, specifically it would be the American Health care industry. In the US healt care is business, that means for people in the industry they would wish for people to get sick every now and then so that they could charge for the health care and make profit. Now with simple logics, why would such an industry care about curing patience, when they would make much more money by simply providing drugs to just help control a medical condition?. Well the horrifying truth is that they dont, they just charge, charge and charge. In America there is health insurance, but the companies that sell these insurance are not interested in helping people, they are just interested in cutting cost, and increasing profit margins. The documentary SicKo explains in detail why the free-market health care in the US in so bad.

Imagine all hospitals privatised, that would mean no more public hospitals, that would mean no more RM5 minimal charge for health care. Where would you go then? To a private hospital of course, and how much would that cost? Probably few thousand ringgit a day, and if you got no money its okay your health insurance might cover the cost, and if you dont have insurance then you might just wanna go beg around till you manage a few thousand dollars and then maybe you can get yourself treated, and if you cant you would probably be dead anyway by the time you manage the cost. How does that sound to you? Well that is the condition of American health care.

Now why on earth would Anwar Ibrahim defend such an economy?, well a free market economy would allow foreign investors to come and go as they please, there wont be much red tape for businesses to operate, less regulations in trade control, and lower sorporate taxes. He probably believes that all this would cause prices of goods and services to be lower due to more competition. Well it certainly did not work in the American haelth care industry, what gurantee is there that it would work here in Malaysia? None… but why arent any elected representative of the people voicing out any of this concern? Well the oppositions are under the control of Anwar Ibrahim and the goverment in uder the control of Najib Abdul Razak.

Does that mean, the current government is doing a good job at managing the economy? Not really, currently the government is practically a crony capitalist, that means that they are very much in support of free-market trade, however they would like to have a little benefit for some special group of people. And from recent news regarding the National Heart Institute it seems that they are also on their way to privatise hospitals. They what can we do? Well we could educate ourselves on the harm a free-marker economy could bring our society and start voicing out against such policies. I am sure, Anwar Ibrahim the man behind Ketuanan Rakyat would surely liten to what the rakyat wants, i wont be too sure about Najib Abdul Razak listening to anybody though.

Help Malays in OTHER Countries?

The government is willing to help Malays in other countries where they are a minority, said Deputy Prime Minister Najib Abdul Razak. The offer to help is towards the advancement of Malays in these countries.

Why would Malaysia want to spend Malaysian tax payers money which is collected from Malaysian Malays, Chinese, Indians and Lain-lain for Malays who are not Malaysians? I know many Malaysians who went to study in the United Kingdom with tax payers money, through JPA scholarship, and later migrated there and get themselves a British passport. This is betrayal towards the Malaysian people.

The goverment must remember it is not their money which they are spending it is the Malaysian peoples money. People of all creed, race, culture and religion contributed to tax, hoping for a return to the society at large. Sadly many irresponsible people use this resources for their own personal gain and then abandoned mother Malaysia, for they say life is better elsewhere. Mind you that those who have commited this act of treason are Malaysians of all race and religion.

Yes even the Malays, have criticized Malaysia and left the country to be apart of other great nations, for to them Malaysia is nothing. They have no sense of belonging to Malaysia, infact they would be number one at criticising how bad Malaysia is in all aspects. They gloat about the achievements of their step nation and how much better life is there compared to Malaysia and they end it with a pityfull hope that Malaysia would do half as good someday.

The point is, our deputy prime minister is once again bothered about an insignificant and irrelevant issue. Why help minority Malays in other countries when we have loads of Malays who need help here in our own backyard? I am not saying that they should focus on helping only the Malays in Malaysia, but what about the poor in our country? Be it Chinese, Indians or Malay, they are Malaysians and they need help. China is not bothered about the Chinese Malaysians, and India strictly objected when the Hindraf issue went to their parliment.

I am just mad at the deputy primier, for being insensetive of the Malaysian peoples plight such as Hindraf’s and even those poor Malays in rural arreas. Yes i remember that he helped a lot of FELDA occupants, but that is no excuse to start helping Malay minorities in other countries, while you have poor people on your own backyard.. Further more, Malaysians are paying tax so that Malaysians are aken care of well, not minority Malays in other countiries who have other nationality!. Bak kata pepatah “gajah di depan mata tak nampak, semut di seberang sungai nampak”.

The Future

Malaysia needs to lead in revolution, not just any revolution but global revolution. We are unique in our own ways, and it is necessary for us to move forward into the next generation of human relations.We maybe left behind in the sense of nation building, however it is never too late to realise and move on. We need to prepare our society for the challenges of the future. It is necessary that we stop bickering about insignificant issues and start developing our society.

But isn’t that what we are doing? Developing our society, perhaps but a rate that is extremely unacceptable. Our politicians spend more time bickering and discussing ridiculous issues which would not be of any benefit to the people. The challenges the future hold is immense. The future is huge, beyond our wildest imagination, and we as a nation are lacking in many arrears which is crucial in order to face the future.Our society is way behind in knowledge development, environment and human interaction.

As humans, we should allready realise that our race or creed makes no diffrence when it comes to survival. We are simply the human race, our survival depends on how we conduct ourselves in preparing for the future. Wasting prescious resources on discussing racial interest and religious conduct is the past century.

We need to utilize our resources appropriately in developing knowledge, science and technology. We need to educate our people so that we may create a society that is well versed in science and technology. The level and quality of education of the society must improve, we are lacking the creative advancement achieved by great nations like Britain, France, Japan and the USA. Our closest relative, Singapore is ahead of us, approximately 50 years ahead, this small nation which was once apart of us now is its way in preparing for the future.

Great nations are busy preparing for the future while we fool ourselves with insignificant issues such as racial interest, futile space exploration, uncalled regulations, and corruptions. Ignorance has become a plague, and incompliancy is rapidly becoming a trend. Nobody is bothered about the future or even the environment, issues that truely will affect our survival as a nation.

We are also unprepared for the impacts of globalisation. In short Malaysia is at the edge of becoming a failed nation. Our young are not adequately educated with necessary skills to manage the future. We are being ignorant on too many crucial issues, our standard of knowledge cultivation is insufficient and cannot meet the demands of the future. We do not have the resources or human capital that is ready fo the future.

Policy makers are not concerned about the future of Malaysia, they have become ignorant politicians only bothered about maintaining popularity and power. No serious comittment is shown by any political sect for dynamic formulation in nation building. Science and technological advancement in any field is showing no progress. Social science is also on the verge of extinction.

Its time to change, and the change must come from within. The Malaysian crowd must realise that each and every individual has to prepare himself for the future. We must educate ourself with the best of education, keep abreast with the current changes and development in technology. We shall change how our society thinks, only then the politicians will follow. At the moment the poliicians are just the depiction of the people;how lame the quality of discourse is in our country. It is time to change, and its now or never.