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Minyan Mailbag: Capitalism & Consumerism

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Editor's Note: Minyanville is a community of people who share an interest of fiscal literacy. As perspective is an important aspect of our daily routine, we share this email with hopes that it adds balance to your process.

Prof. Succo,

Well done. Would you agree that another result of consumerism is a society that is unwilling to be responsible for its actions and consequently looks for government to relieve the dumb decisions it makes?

Minyan Jeffrey

Jeffrey,

I have no problem with consumerism, capitalism, or any "ism" per se. I have a problem with "isms" when they get to extremes, when they get to levels that can create violent reactions.

Societies in general are based on consumption and the allocation of resources to best facilitate that consumption. Capitalism is a system that allocates resources, a system based on competition and the ego (motivation) embraced by Ayn Rand. There are drawbacks to any economic system; those drawbacks can cause revolution in the extreme: communism did and so too can capitalism.

We seem to have a vicious cycle of the U.S. government promoting consumerism and speculation and those consumers, as a result, becoming ever-dependent on the government to facilitate further speculation and consumption. The problem I see is that this produces debt at both the public level (budget and trade deficits) and the private level (consumer and mortgage debt). Consequently, we are overly exposed to rising interest rates and that is one case (another is deflationary in nature) where the real trouble begins.

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