Capitalism Must be Rooted in Service, not Greed
Economist and writer George Gilder speaks to students
NEW YORK, September 1, 2010—Economist George Gilder might have single-handedly set the stage for the revolution in economics and politics that came with Ronald Reagan’s election. At a time when government regulation was the accepted norm and when the private sector was in the red, Gilder entered the intellectual battle proclaiming, “Production, innovation, invention, and enterprise make possible economic growth and advance.”
Gilder spoke to students at The King’s College on August 26, 2010, as part of the school’s Distinguished Visitor’s Series. The Series will bring in over 20 speakers this semester, providing students an opportunity to learn from some of the nation’s top leaders.
Gilder is best known for Wealth and Poverty, which was quoted and used by President Ronald Reagan during the rise of supply-side economics. He has also written on a wide variety of other topics—from failed Republican political strategies to superconductors to Intelligent Design.
Addressing students during an interview with the College’s provost, Marvin Olasky, Gilder suggested that capitalism is founded on service. “Businesses exist to serve their customers,” he said. This goes against a traditional argument against the economic system—that capitalism is based on greed.
“A real egocentric person cannot succeed,” he said. The entrepreneur must understand what other people desire, and create goods and services in that spirit. In essence, “entrepreneurs succeed by giving. That’s what investment is—you give before you get a return. Your success depends on it.”
Years ago, when he first encountered the young Silicon Valley, he was struck by the way scientists could fit thousands of superconductors on the point of a pin. This led to a growing interest in information theory, which he now thinks “is the best way to capture economic theory.”
Communication is measured in how surprising a message is, he said. “How much is expected? How much is new.” He said that economic models are sterile because they do not capture enterprise, which is, after all, where profit comes from.
The entrepreneur does not simply respond to an activity, reassembling elements that are already in existence. Rather, he said, “an entrepreneur is active. He creates new things.” This is why the most surprising inventions—such as the iPod—can yield such high rates of profit. It’s not the greed, it’s the service.
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