Abilities, Needs, Self-Interest, and Excellence

Capitalism is a system that makes no promises, but offers profound opportunities for the creation of good in society. Socialism, on the other hand, makes grand promises of creating widespread good but can't deliver. Here's why.

It has to do with self-interest. It is not possible, nor is it desirable, to live life without paying attention to your own self-interest. Unfortunately, many people associate self-interest with selfishness. Instead, they should associate self-interest with responsibility. When somebody takes care of their own needs, they remove the burden for that care from the society at large. Self-interest is the basis for responsibility. It is also the crux of why capitalism works and why socialism fails.

I am not confusing service with self-interest. Service to others is important - as a matter of fact - few people will really be happy without spending a significant portion of their lives serving others. But here is the critical element. The beauty of the free market system is that it links service with self-interest. Service is the use of your abilities to meet the needs of someone else. In some cases it is paid for, in other cases it is offered for free; regardless of the price, service is about taking care of people.

In a free market system, the way a person advances is by taking care of others. People patronize a business because they have a need. Since free markets are what their name implies, "free", nobody is required to do business with any other person. Therefore, if you want to succeed at your business, you better take care of people better than anyone else (excellence). If you don't, your customers will go to someone else.

In both free and socialistic systems we are dealing with the way abilities and needs interrelate. We all have abilities; we all have needs. The free market is the world’s most effective way of linking the abilities of one person with the needs of another. That is where self-interest comes in - he who succeeds most takes care of others best. Those who have become the richest among us are those who satisfy the most human need. If you want to make it big in America, you better start thinking about what your fellow man needs and start developing your abilities to meet those needs.

We've all heard the famous Karl Marx quote, "From each according to his ability, to each according to his need." Since that sentence is missing the verb and subject, let’s assume Marx is saying, "We'll take the money talented people make with their ability and give it to those people who have great needs." That means a socialistic government (Marx’s dream) will be in the business of taking stuff from the most productive people and giving it to the least productive people. However, since every person has an innate ability to protect their interests, in a socialistic system, the expression of needs is amplified and abilities are hidden. The opposite is true in the free market system - abilities are developed and the expression of needs is reduced.

In the socialistic system, since each is given to according to his needs, everyone will tell the government that they have great needs in order to get as much as possible out of the system. Conversely, since the government takes from each according to ability, the productive will be asked to produce more without a corresponding increase in pay - as a result, their abilities will only be developed by pressure from the government and existing ability will be hidden to avoid the extra work.

To characterize the free market system, let’s play with Marx's words, "Money flows from each according to his needs to each according to his ability." The exact reverse of Marx's statement is actually how it really works. Each person brings their need to the market and shops around for the person with the ability/resources to best meet that need. As a result, people develop excellence within their abilities so they can sell more. Also, since people must pay to have their needs met, they conserve. Some needs are more important than others. When you have to pay for it, maybe you don't need it as much as you think. That’s the underlying reason for government waste – people who are not paying for something consider and express needs differently than those who are paying for something themselves.

Another beautiful thing about the free market system is that it is immensely fair. All of us have wants and needs. We make money by meeting the wants and needs of others. We spend money to get others to meet our wants and needs. Therefore, we can only have our needs met (spending) in exact proportion to the needs we meet of others (earning). Having more needs met (spending) than we meet (earning) puts us in debt - meeting more needs (earning) than we have met (spending) gives us a surplus. The free market systems required us to take care of each other. It aligns self-interest with service. The more we take care of others, and the better we take of others (excellence), the better we do ourselves.

Free markets produce excellence, creativity, innovation, opportunity, abundance, and prosperity. Socialism produces mediocrity, selfishness, hoarding, lack and squalor. Both as people pursue that which is in their best interests. Free markets make the world a great place to live – socialism makes the world an awful place to live. The United States of America is the great country it is because our founders recognized the power of freedom and the beauty of free markets. They deliberately created a system by which the maximum amount of freedom could be had by all. They recognized that power should remain with the people, not with the government and created a system to restrict the growth of government as much as possible so as to allow the success of free markets.

To sum it all up – the free market system allows that natural urge within for success to be satisfied only when we orient our thinking toward the good of others. It properly aligns our own self-interest with the service of our fellow man. As we take responsibility for ourselves by going out and making a living, we do the work necessary to make our country a great place to live. Oh, and if you want to help other nations around the world enjoy the same quality of life that you do – spread freedom.

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