atcheruti

To The Able

In The Good on October 6, 2008 at 3:13 am

Living in India the past two years I’ve made it a point to read Swaminathan Aiyar’s column in The Times of India every Sunday.  In the same period I’ve also discovered a blog called “Aristotle the Geek.”  Today I have a nit to pick with both.

In his blog ATG writes that capitalism works on trickle-up, not trickle down.  In precise terms, capitalism sees neither “trickle up” nor “trickle up” but trickle to ability and efficiency.

Considering again the case Mr. Aiyar presented in his column, it is possible to see without much ado that profit flowed to people in proportion to the value they added to the raw cotton.  The person who makes the cotton most useful to the person who will use the cotton (i.e. the one who uses the most complex ideas) gains the most.

Consider also what happens to the money once it is in the hands of the mill owners.  They do not keep the money sitting like a stone on the ground.  This money finds itself in the market to be lent to the borrower who can make the most productive use of it.  Once again, it goes to the most able, productive and intelligent.

In the thinking of this blogger, both trickle-up and trickle-down are incorrect theories because they miss the essential, the ethical, part of Capitalism – capital flows to those who most deserve it.  All of Socialism is merely a misguided attempt to deny that Capitalism is a based ultimately on justice.

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