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Capitalism 2.0: Rationality

Posted on Thursday, Apr 2nd 2009

Here are two more passages from Ayn Rand:

“Rationality is man’s basic virtue, the source of all his other virtues. Man’s basic vice, the source of all his evils, is the act of unfocusing his mind, the suspension of his consciousness, which is not blindness, but the refusal to see, not ignorance, but the refusal to know. Irrationality is the rejection of man’s means of survival and, therefore, a commitment to a course of blind destruction; that which is anti-mind, is anti-life.”

“A rational process is a moral process. You may make an error at any step of it, with nothing to protect you but your own severity, or you may try to cheat, to fake the evidence and evade the effort of the quest—but if devotion to truth is the hallmark of morality, then there is no greater, nobler, more heroic form of devotion than the act of a man who assumes the responsibility of thinking.”

I am very bothered by a world order which suspends logic, which suspends rationality. At least my rational thinking is not giving me any confidence that the world order we’re in right now will yield a sustainable, universal well-being, and not destroy a thus far reasonably functional system which has delivered hundreds of million people out of poverty.

I cannot reconcile welfare as the solution. I acknowledge welfare as a partial solution for a certain class of people – mentally ill, homeless people living on the streets whose minds are incapable of allowing them to function in rational terms, for instance, makes sense to me.

But welfare for auto companies, for auto workers?

For the bottom of the pyramid, micro-finance and micro-franchise are great models. But we hear nothing of those. We hear only about welfare these days.

Capitalism 2.0 would work much better if we address the bottom of the pyramid with micro-credit and micro-equity, and help people become small-scale entrepreneurs. Not this colossal mass of suspended reality enclothed in distorted logic.

This segment is a part in the series : Capitalism 2.0

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Quoting Ayn Rand proves nothing. What is the point that you are making? Obama has come in just now and only time will prove whether his methods work or not. Or work in the short term but screw up in the long term or vice-versa. The messy state of current economic affairs is not Obama’s creation, remember… it was always burning since the world’s been turning… several years of republican rule, with close followers of Ayn Rand at the helm (read Greenspan) either caused or at least could not prevent the current state of affairs. What is the logic behind the suggestion that more of the same capitalism 1.0 (even with minor tweaks) is going to fix all the problems? When capitalism works and corporates make big profits, the employees and especially top guys there take huge bonuses home. When it fails, another class of people (consumers, depositors, tax payers, etc) are left carrying the bag. Is this fair?

HS Friday, April 3, 2009 at 4:35 AM PT

You should read the series, not just this post in isolation. This follows a discussion earlier on Logic, P&L, Deficit, etc.

The reason we are having this discussion is that I said upfront that Capitalism 1.0 does not work, and that is why the series is titled Capitalism 2.0.

Don’t forget though that Capitalism 1.0 worked better than most other systems.

There are discussions coming on Compensation, Taxes, etc.

I also think your viewpoint is quite simplistic. Capitalism doesn’t only benefit big corporations. Go study Microfinance and check who is benefiting in that case. That’s squarely capitalism, very innovative and wonderful capitalism, and if you don’t acknowledge that, I’d have to conclude that Rationality ain’t your thing …

Sramana Mitra Friday, April 3, 2009 at 7:51 AM PT