George Gilder: Capitalism is based on information and knowledge, not greed

Sure, whatever. It doesn't matter what "Capitalism" is. Evolution has made human-nature greedy. And all these systems (capitalism, consumerism, socialism, communism, anarchy, have one overriding commonality; they're implementors, regulators, and constituent parts are all human. Whom, in the aggregate, follow human-nature (by definition).<p>No matter what system you think we have (or should), what system they tell us we have, or what system people actually try to enact, human-nature morphs it towards greed.<p>And if you're irrationally alienated by the word "greed", feel free to replace it with the comfortable alternatives we've rationalized; "saving money", "efficiency", "winning", "being successful". They and others are all rooted in "getting the most for me" aka greed.

I have a very tough time rationalizing this guy's futurism with the rest of his opinions. Of course, I guess compartmentalization and contradiction are common elements of the human condition.<p><a href="http://en.wikipedia.org/wiki/George_Gilder" rel="nofollow">http://en.wikipedia.org/wiki/George_Gilder</a>

I'm not sure this random collection of quotes is a great starting point for a discussion as broad as what "capitalism is". Especially quotes that come in an election year from a non-economist mainly famous for his GOP activism.<p>If you do want an argument in favor of the information-aggregation view of markets, and what is required for them to work in practice, F.A. Hayek provides a better analysis.

I disagree. Capitalism in its current state is heavily based on securing advantages, meaning it's only fair in areas which are new and not saturated by established players.

He gives the game away in the second sentence:<p>&#62; But greed, in fact, prompts capitalists to seek government guarantees and subsidies that denature and stultify the works of entrepreneurs.<p>Yes, that is how real, as opposed to theoretical, capitalism works. And communism is all about selfless cooperation in theory, but in practice works out to something quite different.<p>Speaking of communism and information, I can't recommend too highly the book Red Plenty by Francis Spufford, which is about the efforts by very early cyberneticians in the USSR to create an economy which was managed by information without greed.

It sure is. Sometimes this information is in the form of insider knowledge shared within the old boys network, or misinformation spread to the masses to pump and dump a stock (hello facebook), or tell everyone to buy a house with a white picket fence (take on that mortgage, it's the best investment evah), or market "derivatives" that are "too complex even for the sellers to fully understand". We also have the knowledge on how to patent stuff so the hoi polloi don't get their grubby little fingers on it...<p>It's all about the CONTROL of information, making use of it to enrich oneself at the expense of others.<p>Let's not kid ourselves, it's not about sharing sh*t. It's about doling it out piecemeal and selectively, or obsessively, to control opinion and/or maximize profit.<p>Perhaps not zero-sum, but there are lots of bags held by the partially informed and the less-informed.

"In capitalism, the winners do not eat the losers but teach them how to win through the spread of information."<p>This certainly casts patents in an anti-capitalist light...

"Far from a system of greed, capitalism depends on a golden rule of enterprise: The good fortune of others is also your own."<p>So... when competition puts your company out of business, that's a good thing?<p>It was beneficial to local grocers when their businesses were bankrupted after being undercut by Walmart?

Isn't Capitalism based on... capital? Investing in production in such a way that you increase your profit rate -- with the inevitable result being consolidation of capital, and therefore power over the means of production -- or in other words the consolidation of power?<p>With globalization this becomes an even more serious problem, because the entities that control the capital are extra-national. So from the joyful history of the East Inda Company to the merry state of British Petroleum today -- you have entities that cannot on the whole be held accountable to one set of laws, because no (functional) jurisdiction exist that cover their entire area of operations.<p>Even when regulation seemingly works, as with Microsoft, Netscape and the browser wars -- they fail. Microsoft won that one, despite loosing.

Not much content in this blog piece. Couple of isolated quotes from a Forbes article from a with no tl;dr on offer.<p>Instead of "Capitalism is...beautiful" ideology it would be worth focussing on when it works and when it doesn't. Seems that there is strong evidence that capitalism harness human nature, property rights, and incentives to enable production. That's great. There is a lot less discussion about what it takes for markets to allocate resources efficiently. Two of the bigger prerequisites are "no externalities" and "symmetric information". Capitalism has no built-in mechanism to establish these conditions. A lot of our problems today go right to those factors. We could do something about it if our politicians would stop playing to the cheap seats. Sorry capitalism, you're ok but not that beautiful.

Flagged for being overly partisan political, and bringing little value as a launching point for discussion.

Data Points:<p>Since 1970, global population increased by 91% Since 1970, global aggregate GDP increased by 540% (in constant $)<p>I think that means that 540/1.91 = ~2.8x increase in per-person productivity on a global basis over the last 40 years. I would contend that capitalism drives productivity increases to a greater degree than communism or socialism, simply based on the fact that 8 of the top 10 economies in the world are arguably capitalist. (counting France as socialist and China as something else, not sure what at this point).<p>A better statistician than I can weigh in with wealth distribution, and I am betting that the average world citizen is better off today than 40 years ago, primarily due to capitalism.

Capitalism is based on there being a customer. All the capital in the world doesn't do any good if there's not a buyer on the other end. Another argument for a strong middle class.

Capitalism as described is yes, but humans are based among other things on greed and they are part of the system.<p>Please don't make the mistake of confusing the system with the agents in the system.

Capitalism is only possible where knowledge is shared unequally. For example, if many people knew how to obtain the proper license or whatever and where to go to buy wholesale, then they would bypass retailers entirely. Similarly, if many people had knowledge about how to start a business and knew several friendly venture capitalists or bank officers, many of them would start their own businesses and there would be few people to do the actual work.<p>Having said that, I think its important to emphasize some of the things that capitalism gets right: it is still a relatively open and distributed system that is able to evolve more freely than systems that are less so. Open in that many people can actually apply for loans etc. and start their own businesses. Distributed in that there are numerous options and usually no single point of failure.<p>I don't think that greed is necessarily fundamental to human nature. That's an oversimplification. Humans do need to compete sexually, but I don't think that extreme hierarchies are necessarily a requirement for that. Much of what is considered human nature is just the current state of our culture.<p>I think its hard to create a system that operates consistently and soundly as a whole but at the same time is robust, distributed and free to develop in different directions.<p>However, I believe sure that we can improve our current situation by injecting a more egalitarian belief system as well as more science and technology into the power structure and its operating principles, which means the financial system. For example, "economics" is now mainly gaming strategies for maintaining point (monetary) counts and the power that goes with them. But because economics is so critical to human decision making, it must at some point incorporate human needs, social science, and physical science such as ecology. There is a false belief that somehow these monetary gaming strategies and point/goods exchange systems (the economy) incorporate scientific knowledge, measurement, and technological knowledge automatically. That is not the case currently.<p>One of the problems with all of the systems, capitalistic or anti-capitalistic, is the tendency to move, either quickly or more slowly, towards centralization. When wealth/power as well as goods and services production concentrates it leads to vast inequality, poor distribution, stagnation, inability to cope with local conditions, etc.<p>I think we need to do a better job of centralizing information schemas and holistic knowledge but do that in a way that does not compromise the ability to evolve those knowledgebases and distribute production or lead towards centralization of power, etc. Its not easy, but I think its a technological problem we can solve.

Capitalism is based on information, knowledge, greed for money, greed for ownership, desire for accomplishment, and a lot of other things. Information is one of these things. Information is a means to a lot of other ends as well.<p>I look dimly on people who say "Capitalism is driven by X" where X is some narrowly defined band of things. From Rand to Marx, theories that look like invariably turn out wrong, sometimes disastrously so. In economic speak, an incentive is anything that a person in question might want. The desire to acquire information and the rewards of using it are one kind of incentive. It's common for random econ pundits to try to redefine "incentive" as "greed", and this should be the first clue that they either don't know or don't care what economists actually think.

huh? Capitalism is about risk and reward. Capitalists look to government for a number of things:<p>a) Infrastructure b) Political stability c) Market Regulation (e.g. fair competition, orderly markets, currency,etc) d) and risk reduction<p>Capitalists are free to asks for any other thing that decreases risk, it doesn't mean the government has to respond in all cases. I disagree with George, there is not direct path between incentives and socialism.

<i>The competitive pursuit of knowledge is not a dog-eat-dog Darwinian struggle.</i><p>This is demonstrably not true in the presence of <i>Firms</i>. <i>Agents</i> in the markets are hierarchies, and the internal competition in a hierarchy is very much darwinian. This second tier of this two-tiered chess game is not without consequence.

Wow - this is so close to the FLOSS ideology! I'll need to read that book.

It's based on individual property rights, trade and reinvestment of capital accumulated due to said rights.

So, the claims are that capitalism is based on information and knowledge and not greed and that greed leads to socialism?<p>Is certainly an interesting opinion.<p>My first thoughts were that he seems to be confusing motives and methods. Information and knowledge certainly flow through a capitalist system and are definitely required in order to do well, but they are not the motive for most capitalists, In fact I can think of very few millionaires who are in business for the learning and philosophy, whereas the desire to own more stuff or money often is a driving force.<p>As for saying that socialism is the end product of greed, and that it is greed that leads to a socialist welfare state, well. Someone should definitely tell this to some of the various murderous dictators that have been propped up by capitalists in the name of stability, security and favourable trading positions. They'd have a pretty good laugh about it while checking their numbered accounts.<p>Also, if greed leads to the creation of welfare for the poor, presumably this means that the problem is the greedy poor. Which given that by definition they cannot be very good at being greedy as they have no stuff, makes me doubt that it was their greed that led to the creation of welfare, and that maybe having less than 100% employment might have more to do with the massive mechanisation and export of labour.

Capitalism has its problems, but its critical selling point is that, if it works well, you don't need official approval to do business. In the USSR, it was a crime to compete with the one established business: the state. Fusions of state and business power (whether from the left, as in communism, or from the right, as in fascism) are almost always bad. The major win (practical and moral) in capitalism is the right of the individual to interact with the market without official approval.<p>If you look at corporate hierarchies, however, you see that they're run internally like command economies. Headcounts and projects are written up and assigned by gloomy, bureaucratic committees detached from the actual heartbeat of the business. You're assigned a role, and if you try to "compete" by seeking a different role or starting a skunk-works project, most companies will fire you or otherwise work to shut you down. Companies are statist in the extreme.<p>Corporatism is a system designed to give the best of both systems (capitalism and socialism) for a well-connected, parasitic social elite (called "the 1 percent", but really they're about 0.2%) and the worst of both for everyone else. You see this, for example, in commercial air travel, where you get Soviet quality of service but the bizarre, unpredictable pricing you'd expect from a runaway market (that is actually not so much a "market" as an algorithm designed to fuck you over).

"Capitalism is based on information and knowledge, not greed"<p>Really? Then someone please inform the capitalists.<p>So when, for example, a large multinational executes workers demanding better pay and conditions in third world country factories, it's all about information and knowledge.<p>Mainly, the knowledge that killing those guys will send a message to the rest of the workers, and keep the factory costs down.<p><a href="http://www.amazon.com/The-Coke-Machine-Behind-Favorite/dp/1583334068" rel="nofollow">http://www.amazon.com/The-Coke-Machine-Behind-Favorite/dp/15...</a><p>Just an example. There are million others, from lobbying and having special laws made for them in western countries, to setting up governments of people they approve and taking down governments they don't like in so called "Banana republics".<p><a href="http://www.amazon.com/The-Coke-Machine-Behind-Favorite/dp/1583334068" rel="nofollow">http://www.amazon.com/The-Coke-Machine-Behind-Favorite/dp/15...</a>