Sunday, 9 February 2025

Capitalism is really about collective welfare

In the West, Adam Smith showed that each person working towards their own interests in a free market results in maximum group utility. But this hides a contradiction. On one hand Adam Smith tells us to work towards our own interests, but he justified this by looking at the total utility which is no longer about "my" interest, but is about "our" interests. So Adam Smith still values collective interests as the basis for our personal behaviour. This is not selfishness which is focus on our self at the exclusion of others. In Adam Smith we all focus on ourselves to help each other. But since we have established that maximum utility is the real goal of Capitalism we can do even better than exchange (which requires both people to have something to exchange) with "giving" which requires only one person to have something. If we wish to maximise utility in fact the most efficient way is just to give people what they need. This achieves Adam Smith goals even better than free market.

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