There's Nothing Better than Capitalism--Don't Even Think About It

Tweet Capitalism: this guy in the NYTimes admits it [using this bonus system as an example] isn't "fair in any moral sense," yet he discounts the idea that there is any better economic system on the face of the earth. There never will be when people like him can justify things like $50 million dollar bonuses while there are people who are starving because they can't find a job.--Linda

"EVEN those accustomed to Wall Street’s otherworldly pay scales gasped last week when Goldman Sachs’s 2006 compensation numbers were released: $16.5 billion, up 40 percent in a year, some $623,000 per employee. The news triggered shock and envy: Oh, my God. That’s obscene! Boy, do I wish I worked for Goldman Sachs.

"Pundits asked how such numbers could be justified, whether Goldman’s employees were that much more talented than the rest of Wall Street, whether Goldman’s shareholders were getting mugged. About the only people who had nothing to say were Goldman’s understandably discreet employees. What were they thinking?

"Having once been on the receiving end of the Wall Street bonus system, I can guess: Some Goldman employees probably felt ecstatic; some fairly paid; and some shafted. (It is ever thus.) For example, word has it that some secretaries fumed about making a total of only $120,000 while their bosses made millions — until gently reminded that $120,000 is great secretary pay. Most Goldman employees probably have a sense of how lucky they are compared to those outside 85 Broad Street. Few probably suffer from the delusion that the bonuses are “fair” in any moral sense: Even with frequent all-nighters, Goldman workers probably earned the best hourly wages in the world (an average of about $200 per hour, assuming a 60-hour week; the firm’s top traders, meanwhile, reportedly made $17,000 to $33,000 an hour.) In a country where some people are starving and others are furiously debating a $1 increase in the minimum wage, such bonanzas provide a startling reminder of the inequities of our free-market economy.

The article ends this way:

Capitalism can’t solve all economic problems, as the homeless people poking through trash cans outside 85 Broad Street can surely attest. In fact, to adapt an old adage, capitalism is surely the worst economic system on the planet except for all the others. What capitalism is great at, however, is encouraging successful risk-taking, and this keeps our economy healthy and vibrant. Capitalism is also great at generating immense tax revenue (Goldman’s employees will pump almost as much into city, state and government coffers this year as they take home — some consolation for those who won’t be getting $623,000 checks in their stockings.)

In any case, to see the embodiment of our economic system in action — for better and worse — one need look no farther than Broad Street.