The idea that capitalism is a flawed or broken economic system has gained more and more popularity in the last decade. Some critics of capitalism suggest socialism would be better. There’s a real emotional component to these beliefs.
One group of money scripts can be categorized as Money Status beliefs. People with predominantly Money Status scripts tend to identify themselves by what they accumulate or spend. It’s true that this mindset does not necessarily foster emotional, physical, or financial wellbeing. Focusing on wealth or over-consumption for its own sake is likely to eventually lead to financial and emotional pain. It is futile to try to use money and possessions to satisfy our human needs for connection and love or to substitute for genuine self-worth.
Yet money scripts that are associated with financial excess are not about capitalism or socialism. They are about greed. Greed, whether for money or power food or anything else, is not produced by an economic model. It has long been part of the human condition, and all of us experience it in some way whether we live under capitalism, socialism, communism, some other economic system, or a society that does not use money at all.
Another issue with many views of the flaws or virtues of both capitalism and socialism is that people often aren’t using the terms accurately.
Capitalism, as defined by Merriam Webster, is “an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.”
Socialism is where the government determines the levels of investment prices and production levels. A truly socialistic economy has no privately owned business since all businesses are government owned. There’s no competitive force serving to improve services or drive down prices. Prices are by government policy. In theory, everyone is economically equal with no rich or nor poor. In reality, that is never the case.
Calling for increased government spending, more social programs for the poor, higher taxes on the rich, or taxpayer-funded health care is not the same as advocating for a socialist system. For example, the Scandinavian countries have massive social programs, yet are not socialistic economies. Their systems allow for free markets and the private ownership of business, meaning their social programs are funded by capitalism and free enterprise.
In capitalism, the dynamics of the free market and competition drive down prices and improve quality, helping distribute resources efficiently. I don’t find any other economic system that delivers this outcome. In fact, systems controlled by central planning have a track record of producing economies where shortages prevail and those in charge prosper on the backs of the masses.
A capitalist may be the wealthy owner of a large successful business, a self-employed house cleaner, a freelance artist struggling to sell their work, or a teenager with a summer job mowing lawns. No matter their level of financial success, they’re all operating competitive, free-enterprise businesses.
Certainly, many business owners and wealthy people are greedy, selfish, and materialistic—because these qualities are found in many people in every walk of life. They are signs of people who are trying to use material things to satisfy spiritual and emotional needs for belonging and connection or resolve traumas that have happened in their lives. And money or material goods can never fulfill those needs.
Excess consumption is often destructive and can be a genuine problem. But blaming it on capitalism does nothing to offer any real solutions. It could be more useful instead to explore what’s behind the fears, anger, and money scripts around capitalism. What emotions might be behind a belief that someone making a profit or earning more than I am is greedy, defective, or bad? What am I afraid of? What needs within myself are not being met?
Concerns about poverty, income inequality, and financial wellbeing raise big and legitimate questions. Solutions are more likely to be found through healing individuals’ emotional wounds than in “fixing” an economic system that is not broken.
Check out The Financial Therapy Podcast by Rick Kahler concerning this topic.
