Ancient Wisdom Still True Today

Since the dawn of the industrial age, critics of its reliance on capitalism for continuous innovation and growth have pointed accusing fingers at systemic aspects of private property, free markets and limited government regulation for capitalism’s many unequal outcomes and power imbalances.

But what if the root cause of the shortcomings of capitalism are not in its architecture but in the minds and hearts of those who make use of its structure for their own purposes?

Recently, I read an essay on Thucydides’ History of the Peloponnesian War. Two insights from that first Western historian would incline us not to blame systems but rather look for causes and offsetting remedies elsewhere.

Thucydides thought that “…the usual thing among men is that when they want something, they will, without any reflection, leave that to hope, while they will employ the full force of reason in rejecting what they find unpalatable.”

Markets generate wants, as honey draws flies. Is it any surprise, then, that people in markets cling to hope when they should not and rationalize away what is inconvenient or unsettling in their transactions, especially any personal responsibility for doing good to others?

Thucydides also said: “War is a stern teacher … it brings most peoples’ minds down to the level of their actual circumstances.” War throws “the ordinary conditions of civilized life into confusion; human nature, always ready to offend even where laws exist, show[s] itself proudly as something incapable of controlling true passions, insubordinate to the idea of justice, the enemy of anything superior to itself.”

Many have pointed out the supposed similarities between war and markets: dog eat dog competition; to the victor belong the spoils; survival of the fittest; no empathy for losers. So markets, like war, expose the rawness of human nature, bloody red in tooth and claw.

There is something to the comparison. People do not lose their human natures when they go to market. So when market realities – no free lunch, prices too low or too high – bring them down to actual circumstances and sow confusion in their framing of expectations and aspirations, their passions take over and become insubordinate to justice. They consider their own interests paramount and not subordinate to the concerns of others.

So in a sense, it is a system that creates our disappointments, a natural system, if you will. But the market system of our own devising for production, finance and consumption, at times, brings forward human nature in the raw – untrammeled, unpolished, un-burdened by virtuous sentiments, unadorned by beauty.

The solution: reform the market system or change our natures?