Tuesday, May 10, 2011

Dirty Capitalist

Hey there,

On a topic totally unrelated to investing, I had fried rice with a glass of red and brownies with ice cream for dinner today. All cooked at home, it was awesome; what did you have? Bet it was not as good as mine lol.

Anyways, Osama Bin Laden’s death occurred only recently and obviously there’ll be a lot of news circulating about this event. Some praises him as a saviour of some sort, I guy who gave up his riches to cleanse the Middle East, some portrays him as a terrorist mastermind and that the world is a better place without him. In a lot of them, they talk about this man fighting against the evil capitalistic Americans.

To be honest, I love capitalism as an idea (thats right I’m a dirty capitalist). I think it is an awesome idea, much like my dinner. I think of it as democracy for your everyday life and you vote using cash, as simple as that. In cities like Hong Kong, there is where capitalism is at its best. For example, if your restaurant is not good enough, news spread, very quickly in a city that is that dense, and very soon you will not get any customers and hence no cash and go bankrupt. On the other hand, if your restaurant is good enough, people come in and pay you for your food and you survive. The yummier your food, the higher you can charge. Like democracy, if people don’t like the way you run the country, you don’t get the votes and you’re out. If they like the way you work, you get the votes and stay in power.

I like the idea of being awarded for doing more work, for example, a miner should be paid more than a cashier. A miner is faced with more work hazards, works harder and possibly longer. I’m not saying a cashier’s job is easier but I would imagine it is easier than working in a mine. And that is what capitalism allows, it allows you to charge more for your services if you are good at it or if you’re sought after. A neurosurgeon can charge 1000 dollars for a consultation and the one down the street might only be able to charge 200 if he is not as good. If he is any worst, he might go bankrupt.

Capitalism is very closely related to supply and demand as well. Like I said before, it is democracy for everyday life. If people want enough of something and the supply is limited, could be a product like a shoe or a service like plastic surgery, the price will go up. When people realise that money can be made in that sector, they get into it. Very soon it will get saturated and over supplied and that is when the price drops again. Sorta like homeostasis if you study science. Thats why every boom is followed by a bust and every bust is followed by a boom.

Much like democracy, capitalism has its downfall as well. And I think its human nature that fails capitalism. People who get paid a lot for their “sought after” services often get too greedy and find ways to get more. For example, a CEO of a company has a very very hard job but is their services really worth 50 million a year? Companies that are making millions of dollars often want to make millions more. And I guess this is where the “exploitation” and “dirty capitalist” comes into play.

Its funny how capitalism has a negative connotation attached to it, but then again I guess it depends on who you talk to. Countries like Cuba do socialism very very well, people get almost an equal pay no matter what they do. Healthcare there is one of the best in the world, and from documentaries I watch their people seem happy.

I’m sure everybody has their own view on this, but I’m definitely more of a capitalist. I’d like to be paid more for the work that I do. Assuming they are quality work, either that or my marketing team will be so good that they will make it seem like we are selling good products that you must have even tho its a load of crap lol. “note for you, if you see a company owned by Jeffrey Sia, remember that he is a dirty capitalist with a very good marketing team lol”

Anyways, this post is getting too long, let me know what you think about capitalism as an idea. I’m guessing if you’re reading this blog you’re more skewed to being a capitalist rather than a socialist. Or what do you think about socialism. Which one do you prefer? Do drop me comments or emails as I’m more than happy to read them.

If you like this page, do like on facebook, just click on the little like button on the right hand side of the screen or follow me on twitter!!

Next post on Thursday.

4 comments:

  1. I agree Jeff, with your view that Democracy and Free Market is the way to go as a system to determine value. However, when market failures occur like the GFC, when irrational pricing occur, governments have to step in before the crisis in order to prevent the distortion and unnecessary suffering from an inevitable strong market correction. There is still a failure in the market to price pollution, put a value on the environment, value humanitarian work, assisting people with disabilities, indigenous health while placing too much value on CEO salaries. If we don't put a price on Carbon, value our environment more, value our people more, I'm worried about the inevitable Global Social Crisis.

    ReplyDelete
  2. "their people seem happy" => People in Cuba is ranked one of the least human rights in the world with major abuses from the government so I think people can only be happy there to a certain degree. Here's an example that just came up on the news:
    http://www.miamiherald.com/2011/05/10/2210205/cuba-denies-police-beating-of.html

    ReplyDelete
  3. @ Eric, you're definitely right, too many people's greed get in the way in order for capitalism to work ideally. I think putting a price on pollution is a great idea, being able to trade it as a commodity as well as being awarded for producing less pollutants. I saw a TED talk once about rivers in America, they played around with the laws and made it so that people were awarded for conserving water and use less water from the rivers. As a result, rivers that were completely dried out came back to life.

    ReplyDelete
  4. @ barfy, its funny how eric said government comes in and correct failures in capitalism where as in your comment the government is causing the failure of socialism. Pfft at humans wanting more power and money.. lol. I'm sure people everywhere are happy to a certain degree, we have to be to remain sane.

    ReplyDelete