Project for Philosophical Evaluations of the Economy |
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The basic flaw of capitalism
Dialog between Noah denkt™ and its Alter Ego on the accuracy of Noah denkt™’s recession
predictions and on its views about the future of capitalism, first drafted on May 17 published on June
2, 2009
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Question by Alter Ego of Noah denkt™ (AE): How accurate do you think your predictions have been as far as the
current recession is concerned?
Answer by Noah denkt™ (Nd): Our record is mixed on that. There are issues where we have been right, and there
are those where we have misjudged the facts.
AE: Which are they?
Nd: Well, we were right in the first place to predict a downturn. We were also right in being skeptical about
financial values. We were on the mark when speculating that the US government would (literally) do everything it
could to fight this recession. Additionally, we feel vindicated in our belief that things couldn’t get better before
prominent Wall Street representatives were brought to their knees. We think that we were on the money when
predicting the bottoming process of the stock market. And finally we were right to argue that of course there would
be a tremendous amount of hysteria in the current downturn which is why the rebound would come much faster
than expected. (For further information on Noah denkt™'s prediction accuracy, please click here)
AE: That is a pretty impressive list.
Nd: Perhaps. But wait with your final judgment until we talk about where we have been off the mark.
AE: Okay! So where did you get it wrong?
Nd: Well, clearly we did not expect this downturn to be as severe as it has turned out to be. And we also did not
believe that it would take as along as it finally has, to turn this ship around.
AE: But, if we remember correctly, you in deed have been alerting to the fact that a big correction will eventually
take place.
Nd: That is true. We did not think though that it would be this current recession that would cause all that much
pain. Much rather did we predict that it would be one of the following downturns that would bring about the brunt
of the bloodshed.
AE: And you think that this prediction is wrong now?
Nd: It may still be that one of the next downturns will be more painful than this one. The fact of the matter is
though that we underestimated the impact which the current crisis would have.
AE: What about your forecast then according to which the government response to the current crisis will
eventually result in a hyperinflation of Argentinean proportions?
Nd: Well, we are not sure about that anymore. Much rather do we expect an 8 to 10% inflation rate in the years to
come, which will considerably hamper the economy but not cause the devastation that Argentina has suffered
from at the height of its hyperinflation days.
AE: But you still predict that eventually there will be an economic tsunami coming our way, correct?
Nd: Right!
AE: Why is that?
Nd. Because the basic flaw of capitalism has not been remedied?
AE: Which is what?
Nd: It’s the fact that the majority of capitalism’s representatives aren’t real capitalists?
AE: What!?
Nd: Well, just look at all these bank CEOs who are usually perceived to be the epicenter of capitalism. All of them
hold salaried positions, and so you cannot really call them capitalist. After all, they have not embraced a true
entrepreneurial risk for themselves. Much rather have they opted for a corporate career which will never grant
them the independence that a true capitalist naturally strives for. (The same by the way is true for all these
economic professors who regularly appear on television to tell us what is right or wrong in this world.)
AE: But there also people like Warren Buffet, Sam Cell, Eli Broad and others whose way of being exactly matches
your definition of a capitalist. Can you therefore truly claim that the majority of capitalism’s spokes people aren’t
capitalist?
Nd: No doubt that there are still a valuable number of capitalists around. The problem though is that they get
pushed out of the limelight by these glitzy CEOs on Wall Street who like to refer to themselves as part of the best
and brightest.
AE: Okay, let’s assume that you are right on this one. Why does the limelight position of salaried employees
cause economic distortions and recessions?
Nd: Because it sets the standard wrong. And because it suggests to the rest of the public that a salaried career is
all you can reasonably hope for. After all, it must now appear to your average citizen as if a professional
independence is unattainable since even the most recognized do not have the guts to fight for such self-
determination themselves. And if you have such a scenario it is only logical that the respective economy
repeatedly falls into the trap of fashionable views and conventional wisdom. Because the example of a self-made
leadership and a rewarded independent critical judgment is too removed from the every day experience of that
society that the latter could now still avoid being rampaged by perpetuated boom-bust cycles.
AE: In other words, you thing that the scarcity of true capitalists in the capitalistic movement creates an overall
atmosphere of conformism and corporate careerism which ultimately results in an inefficient allocation of
resources?
Nd: That is true.
AE: And you do not believe that this may change one day. In other words, you do not believe that CEOs will
eventually lose their predominance in the representation of capitalism?
Nd: No, we do not think that this will change any time soon. Much rather do we anticipate that this issue will
become a lot worse before it can get better.
AE: Which of course will create an ever increasing need for fundamental corrections?
Nd: Correct!
AE: In other words, your tsunami prediction is still on. The only difference is that you see it coming later than you
initially did.
Nd: Right.
AE: Well, we hope that you are wrong in this. But the relative accuracy of your predictions so far, let’s us fear that
you actually might get it right yet again.
Nd: Let’s see what happens…
Dialog between Noah denkt™ and its Alter Ego on the accuracy of Noah denkt™’s recession
predictions and on its views about the future of capitalism, first drafted on May 17 published on June
2, 2009
________________________________________________________________________________________
Question by Alter Ego of Noah denkt™ (AE): How accurate do you think your predictions have been as far as the
current recession is concerned?
Answer by Noah denkt™ (Nd): Our record is mixed on that. There are issues where we have been right, and there
are those where we have misjudged the facts.
AE: Which are they?
Nd: Well, we were right in the first place to predict a downturn. We were also right in being skeptical about
financial values. We were on the mark when speculating that the US government would (literally) do everything it
could to fight this recession. Additionally, we feel vindicated in our belief that things couldn’t get better before
prominent Wall Street representatives were brought to their knees. We think that we were on the money when
predicting the bottoming process of the stock market. And finally we were right to argue that of course there would
be a tremendous amount of hysteria in the current downturn which is why the rebound would come much faster
than expected. (For further information on Noah denkt™'s prediction accuracy, please click here)
AE: That is a pretty impressive list.
Nd: Perhaps. But wait with your final judgment until we talk about where we have been off the mark.
AE: Okay! So where did you get it wrong?
Nd: Well, clearly we did not expect this downturn to be as severe as it has turned out to be. And we also did not
believe that it would take as along as it finally has, to turn this ship around.
AE: But, if we remember correctly, you in deed have been alerting to the fact that a big correction will eventually
take place.
Nd: That is true. We did not think though that it would be this current recession that would cause all that much
pain. Much rather did we predict that it would be one of the following downturns that would bring about the brunt
of the bloodshed.
AE: And you think that this prediction is wrong now?
Nd: It may still be that one of the next downturns will be more painful than this one. The fact of the matter is
though that we underestimated the impact which the current crisis would have.
AE: What about your forecast then according to which the government response to the current crisis will
eventually result in a hyperinflation of Argentinean proportions?
Nd: Well, we are not sure about that anymore. Much rather do we expect an 8 to 10% inflation rate in the years to
come, which will considerably hamper the economy but not cause the devastation that Argentina has suffered
from at the height of its hyperinflation days.
AE: But you still predict that eventually there will be an economic tsunami coming our way, correct?
Nd: Right!
AE: Why is that?
Nd. Because the basic flaw of capitalism has not been remedied?
AE: Which is what?
Nd: It’s the fact that the majority of capitalism’s representatives aren’t real capitalists?
AE: What!?
Nd: Well, just look at all these bank CEOs who are usually perceived to be the epicenter of capitalism. All of them
hold salaried positions, and so you cannot really call them capitalist. After all, they have not embraced a true
entrepreneurial risk for themselves. Much rather have they opted for a corporate career which will never grant
them the independence that a true capitalist naturally strives for. (The same by the way is true for all these
economic professors who regularly appear on television to tell us what is right or wrong in this world.)
AE: But there also people like Warren Buffet, Sam Cell, Eli Broad and others whose way of being exactly matches
your definition of a capitalist. Can you therefore truly claim that the majority of capitalism’s spokes people aren’t
capitalist?
Nd: No doubt that there are still a valuable number of capitalists around. The problem though is that they get
pushed out of the limelight by these glitzy CEOs on Wall Street who like to refer to themselves as part of the best
and brightest.
AE: Okay, let’s assume that you are right on this one. Why does the limelight position of salaried employees
cause economic distortions and recessions?
Nd: Because it sets the standard wrong. And because it suggests to the rest of the public that a salaried career is
all you can reasonably hope for. After all, it must now appear to your average citizen as if a professional
independence is unattainable since even the most recognized do not have the guts to fight for such self-
determination themselves. And if you have such a scenario it is only logical that the respective economy
repeatedly falls into the trap of fashionable views and conventional wisdom. Because the example of a self-made
leadership and a rewarded independent critical judgment is too removed from the every day experience of that
society that the latter could now still avoid being rampaged by perpetuated boom-bust cycles.
AE: In other words, you thing that the scarcity of true capitalists in the capitalistic movement creates an overall
atmosphere of conformism and corporate careerism which ultimately results in an inefficient allocation of
resources?
Nd: That is true.
AE: And you do not believe that this may change one day. In other words, you do not believe that CEOs will
eventually lose their predominance in the representation of capitalism?
Nd: No, we do not think that this will change any time soon. Much rather do we anticipate that this issue will
become a lot worse before it can get better.
AE: Which of course will create an ever increasing need for fundamental corrections?
Nd: Correct!
AE: In other words, your tsunami prediction is still on. The only difference is that you see it coming later than you
initially did.
Nd: Right.
AE: Well, we hope that you are wrong in this. But the relative accuracy of your predictions so far, let’s us fear that
you actually might get it right yet again.
Nd: Let’s see what happens…
| © Landei Selbstverlag, owned by Wilhelm ("Wil") Leonards, Gerolstein, Germany. All rights reserved. Reminder: Noah denkt™ is a project of Wilhelm ("Wil") Leonards and his Landei Selbstverlag (WL & his LSV). Consequently, all rights to the texts that have been published under the Noah denkt™brand name are reserved by WL & his LSV. The commentary and the reasoning that was provided on this page is for informational and/or educational purposes only and it is not intended to provide tax, legal or investment advice. It should therefore not be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security or any issuer by WL & his LSV or its Noah denkt™ Project. In fact, WL & his LSV encourage the user to understand that he alone is responsible for determining whether any investment, security or strategy is appropriate or suitable for him. And to leave no doubt as to what this means we urge our user to also note our extended Legal Notice. |
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| Keywords: entrepreneurial capitalism, what is a capitalist, Schumpeter's capitalism, executives or entrepreneurs, executives versus entrepreneurs, capitalism without capitalists, criticism of capitalism, technocratic capitalism, half-hearted capitalism |