UPDATE BELOW:
One of the ideas that has bugged me over the years is the claim that capitalism is soulless. In a literal sense, of course, it has to be soulless because it’s a system, not a person. But the term is used so often that it’s important to examine the claim more closely. Don Boudreaux does so admirably in his article “Capitalism Is Impersonal, Not Soulless,” AIER, January 4, 2024.
I’ll quote a few excellent passages and then go on to say that this is a rare example where I think Don understates his case. And it relates to the picture above. But I’m getting ahead of myself.
Don writes:
Read narrowly, this assertion [that capitalism is soulless] is empty of useful meaning. Capitalism isn’t a sentient creature; it has neither consciousness nor a conscience. Capitalism is the name we give to a particular manner of human interactions. It therefore is no more useful to observe that “capitalism is soulless” than it is to observe that “automobile traffic is soulless.”
But the ‘soullessness’ of capitalism is claimed so very frequently, and by people of all ideological stripes, that this claim obviously conveys some substantive meaning to those who encounter it.
What might that meaning be? I think I know. The claim that capitalism is soulless reflects a confusion of “impersonal” with “soulless.” Capitalism does indeed feature myriad impersonal exchanges, but this reality doesn’t mean that capitalism is soulless.
And:
Motivated, in fact, not by love but by self-interest – and guided not by personal knowledge, but by impersonal market signals – capitalist markets are indeed impersonal. And I grant that they seem cold and soulless when compared to the face-to-face connections that we have with loved ones, neighbors, and mom’n’pop merchants in small towns. But surely when compared to the deadly poverty that we’d experience if we had economic connections only with people we know by face and name, capitalist markets ought to be applauded for their humanity. To describe as “soulless” a system that encourages and enables countless strangers to peacefully and productively cooperate for each other’s benefit surely conveys a wholly false impression.
It’s in the second sentence of the above paragraph that I think Don understates. Not terribly, but somewhat.
To make the point, I’ll tell a true story. My wife and I are cat lovers. At any given time, we have 3 cats. When one dies, we get another, typically with only a 1-week to 3-month lag. It occurred to us over a decade ago that we value our cats so much that we should get good insurance for their vet bills. So we did. We learned the hard way that you can blow through the upper limits of coverage pretty quickly. So we looked around and found a company named Trupanion. We have insured with them for about the last 6 or 7 years. Trupanion has been as excellent as we had hoped.
Sounds impersonal so far, right?
But then, a couple of years ago, one of our favorite cats ever, Kipper, a gentle thing who was so loving to his “siblings,” got very sick and it was clear that we needed to let him go. Of course, our vet went online to get the last procedures paid for.
A couple of weeks later, a package arrived in the mail from Trupanion. It was a framed picture of our wonderful cat Kipper. This is not something we had contracted for. Of course, you can remind me, although you don’t need to, that there’s no such thing as a free Kipper picture. Implicitly, we did pay for it in our premium. But, as I mentioned, that was not part of the contract. So we thought we were getting good value from the company even without that picture. The picture was pure sentimental consumer surplus. And a stranger at Trupanion had enough “soul” to do that.
UPDATE:
I got this story totally wrong, as my wife explained when she saw this post this morning. It wasn’t Trupanion; it was a company named Smalls that sells human-grade food for cats. We had been trying various foods to get Kipper to eat. The vet suggested human-grade food. So my wife ordered some from Smalls. By the time it arrived, Kipper had died. So my wife contacted them to say that he had died and she wouldn’t be ordering more. They were very nice and sympathetic and asked her if she had a photo of Kipper. My wife sent two. A couple of weeks later, a framed picture arrived (the one above) from a picture-framing company.
READER COMMENTS
Jon Murphy
Jan 4 2024 at 2:57pm
A great story. And I think your story reflects another misconception about capitalism: that it is just corporations. But corporations are still people. And people know what it is like to experience love and loss.
This past summer I had to put my cat down after a sudden illness. Because it happened over a long weekend, my regular vet was closed and it was the emergency vet who ended up doing it. The next day they were open, I called my vet to explain what happened and cancel her upcoming appointment. Of course, the receptionist expressed her sympathies over the phone and I figured that was that.
But that was not that. A few days later, I got a beautiful card in the mail. The entire staff had signed it, each person putting in their wishes and thoughts.
These folks didn’t know me, personally. Mimi and I had only been clients of them for a year. But they were people who understood what it means to lose a loved one. And that came out in their simple gesture.
Big corporations, small companies, it doesn’t matter. We’re all people. That capitalism focuses on human interests rather than national “goals” or whatever fosters this sort of behavior.
David Henderson
Jan 4 2024 at 3:21pm
Nice story. I remember your pictures of Mimi on Facebook.
Dylan
Jan 4 2024 at 4:35pm
First, hope you’re feeling better? And I agree, very nice story, and I think, when done well, those are the kinds of things that can really connect a person with a company. It’s those small touches that really help create a brand.
But, they are often done poorly, particularly when a company grows and tries to impose those human touches in a top down fashion. I think that is one of the things people are trying to get at with the soulless critique.
One example from my time many years ago working at a video store (I have a vague recollection I might have shared this story before, if so, I apologize). We were a big chain, but staffed with a good group of movie lovers and were always one of the top performing stores in the region. One of the things I attribute that to is that we knew most of our regular customers well and treated them like human beings not customers. However, there was a company policy that all customers needed to be greeted within a couple of seconds of entering the store. And, saying “Hi” wasn’t good enough, it had to always be “Welcome to Hollywood!” Not, “Hey Dan, good to see you again. We got a new JCVD film in this week” or “Hey, how did Steve’s soccer game go?” That’s what we would do when it was just us. But, when the district manager or regional manager would come in, we would get reprimanded for it. We weren’t “cementing brand recognition” enough, we need to remind them “they aren’t in Blockbuster.” We weren’t soulless accidentally, it was an explicit top down mandate!
There is a well deserved celebration of the benefits of local knowledge by the writers on this site, usually with an implied or explicit issue that one of the problems with top down government solutions is they are missing out on local knowledge. I think it is underappreciated how true this is among corporations as well.
David Henderson
Jan 4 2024 at 4:52pm
Thanks, Dylan. Not all the way, but better. Thanks for asking.
I don’t think you told that story before. I agree that top-down dictation hurts the personal touch. Maybe those managers, and not just economic policy makers, need to understand Hayek’s “local knowledge,” something you’ve given a nice example of. 🙂
I have similar pet peeves. I drive up to the Carl’s Jr. and I’ve carefully memorized all the specific things my wife wants left out of her burger. Then the person on the other end leads with, “Good afternoon. How would you like to try our new umpty squat?” It pushes my memorized list out of my mind, along with the thing I wanted to order for myself, and it takes me 5 seconds or so to dig deep and remember what I came for.
Or another one: “How is your day going so far?” said at a coffee place at 7:30 a.m. when my day began only 90 minutes earlier.
BS
Jan 5 2024 at 6:18pm
“How is your day going so far?”
Use the Zhou Enlai response: “Too early to say.”
David Seltzer
Jan 4 2024 at 4:49pm
Don’s point: “those capitalist markets are indeed impersonal. And I grant that they seem cold and soulless when compared to the face-to-face connections that we have with loved ones, neighbors, and mom’n’pop merchants in small towns.” Reflects the difference between amiable morality and mundane reality. I suspect anthropomorphizing, a verb, attempts to create bonds between humans. Advertisers are expert at this. Mr. Peanut dying or a talking owl hawking allergy relief medicine. Unsolicited side not: I’m agnostic as to the vague concept of a soul. How does one falsify it?
Mactoul
Jan 5 2024 at 12:51am
And so is government. And curiously, the more people-like or personal a government is, more tyrannical it is likely to be.
Jon Murphy
Jan 5 2024 at 6:55am
Partially Agreed. Methodological individualism in action.
Knut P. Heen
Jan 5 2024 at 5:52am
The market system reflects the values of the people who use it. In that sense it is similar to a car. The car drives like the driver does. There are responsible drivers and irresponsible drivers. Hitler and Stalin were both soulless. The result was that the hierarchies they headed became soulless from top to bottom. The advantage of the market system is that you can choose to trade only with people with souls. Sometimes, however, it is cheaper to trade with people without souls.
Jose Pablo
Jan 5 2024 at 3:58pm
Hitler and Stalin were both soulless.
Can you provide forensic evidence on this?
TMC
Jan 5 2024 at 9:13am
Great post! ” It therefore is no more useful to observe that “capitalism is soulless” than it is to observe that “automobile traffic is soulless.” Don has a way of making an idea simple to relate to.
Todd Ramsey
Jan 5 2024 at 10:43am
I think the benefits of capitalism are even more “soulful” when framed thus:
Large majorities of adults in capitalist societies spend much of their lives willingly, often eagerly, doing nice things for other people.
Explanation: the factory worker does nice things for the factory owner all day. Restaurant workers do nice things for their customers. The landlord lets someone live in his building; the tenant gives the landlord some money. And all willingly, even eagerly — when consumer and producer surpluses are considered.
diz
Jan 5 2024 at 2:50pm
I think unless you start a subject like this by defining “capitalism” you’re just going to be talking past people. My quick definition of “capitalism” is usually something like “a system characterized by well-defined private property rights and mutually voluntary transactions”.
I don’t even assume self-interest, though that does appear to paly a role in how many people make their choices.
Anyway, Capitalism defined like this is neither inherently “soulless” or “impersonal”, except to the extent independent individuals make it to be that way with their choices.
Mark Z
Jan 5 2024 at 2:50pm
I think it’s really modernity that’s soulless and impersonal, and that technological advancement have made it inevitable that we deal much more with distant institutions. It’s not as though the alternative to modern capitalism is returning to the ‘good old days’ where most of the people you bought from or sold to are your neighbors and friends. The alternative is soulless impersonal state bureaucracies.
Conceding the validity of this dissatisfaction with the impersonal aspects of modern life (and it is a somewhat relatable sentiment), I don’t understand why people associate the soullessness specifically with capitalism.
Roger McKinney
Jan 5 2024 at 3:08pm
Socialists compete to fabricate the most terrifying strawmen of capitalism. Here is Christopher Watkin in his book Biblical Critical Theory comparing working for wages to child sacrifice:
“Modern humanity sacrifices to machinic efficiency using the currency of its labor, just as the ancient Carthaginians sacrificed to Moloch using the currency of their children. The Moloch Machine shapes and figures the bodily movements of workers that tend it, just as our own habits, attitudes, and movements are increasingly molded by the human-shaping power of smartphones and social media.” (190)
Roger McKinney
Jan 5 2024 at 3:17pm
PS, US capitalism gave us jazz. What music has socialism given? So capitalism has more soul than any system.
Jose Pablo
Jan 5 2024 at 4:04pm
Individuals are soulless.
They invented the whole concept of “soul” just to feel better about themselves. Pour, desperate, pathetic souls!
If you need proof, look at the way they use every “system” they have come up with slavery, feudalism, communism, capitalism, corporations and academia.
steve
Jan 5 2024 at 5:34pm
Our two very large Siamese approve. Markets provide them their food and a steady supply of fancy collars the wife has them wear so that they will always be seasonable and show off their markings. (We have always had cats except we went two years after the last one died. That was my wife’s favorite cat of all time. I think she would rather have kept the cat than me. We ended up with these when my daughter moved to China and now she spoils them non-stop.)
Steve
BS
Jan 5 2024 at 6:21pm
A thing about capitalism (or free markets) is that the journey to satisfying self-interest begins with satisfying someone else’s.
Jose Pablo
Jan 5 2024 at 9:05pm
Yes!
and you can satisfy your “interest” only to the extent that you manage to satisfy other people “interests” (as revealed by their willingness to part from their money not by their “rhetoric”), and that can be extremely frustrating (if for instance you manage to satisfy very little of other people “interests”).
That’s the reason why some people became politicians. Because in that realm this frustrating limit doesn’t exist, since you have the “power” to steal your “interest” from taxpayers without providing any valuable thing to others (apart from “rhetoric”).
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