Gordon Gecko, the infamous trader played by Michael Douglas in 1987's Wall Street, told us that greed is good. He was the embodiment of subservience to capitalism and the holy dollar.
In the 34 years since, we've seen capitalism and materialism continue to flourish, but we also bore witness to a growing chorus of cries to the contrary, manifest in movements like Occupy Wall Street.
Ever since the industrial revolution transformed our world, arguments for and against the ruling economic system have been made.
Karl Marx, the German economist, was and remains the most celebrated critic of capitalism. He felt that capitalism alienated the masses, and that the very many workers toiled in abhorrent conditions for the benefit of the very few who controlled the means of production.
On the contrary, Adam Smith, the Scottish economist widely considered the father of capitalism, believed that society could benefit through the pursuit of enlightened self-interest. Capitalism, he wrote, would ultimately favor consumers over producers.
With so many warring factions over the question of capitalism, has it been net good or net bad for humanity?
To answer this question, let’s look at two key indicators - emotional wellbeing and life satisfaction.
As Daniel Kahneman and Angus Deaton put it in their famous paper on whether money buys us happiness, emotional wellbeing refers to the emotional quality of an individual's everyday experience.
Emotional wellbeing includes the frequency and intensity of joy, stress, sadness, anger, and affection that make one's life pleasant or unpleasant. Emotional wellbeing is closely related to health, loneliness, personal relationships, caregiving, and ultimately, feelings.
Life satisfaction, on the other hand, refers to the thoughts that people have about their life when they stop to think about it. Life satisfaction lends itself to material factors such as income, education, and ultimately, things.
It is almost impossible to make a solid argument against capitalism improving life satisfaction.
Ever since the industrial revolution gave us the benefit of streamlined global supply chains, our world has dramatically changed. As Hans Rosling and Steven Pinker eloquently pointed out in their books on the topic, we are, when it comes to life satisfaction at least, far better off today than we have ever been.
In fact, we are orders of magnitude better off today than we were just 120 years ago across factors of education, healthcare, literacy, lifespan, child mortality, teenage pregnancy, access to nutrition, sanitation, crime, homicide, and so on.
Perhaps the most telling of these statistics is the population of people living in extreme poverty. In 1850, 80 percent of the world population was living in poverty, compared to just 9 percent today.
For a more recent example, one need not look past China. Since Deng Xiaoping liberated its economy in the early 1980s, China's average annual wage has skyrocketed from 615CNY to 93,383CNY today. That's a 151-fold increase, not adjusted for inflation. In the last 20 years alone, the percentage of residents living in poverty in China has fallen from 49.8% to less than 0.6%.
Nowadays, it doesn't matter who you are or how much you earn. If you live in a developed nation, then chances are you have access to clean running water, heat, lighting, electricity, air conditioning, food in abundance, and shelter.
All of this would have been the domain of the extremely wealthy in the 19th Century, yet today, people living in what we might call squalor still enjoy such luxuries.
160 years ago, in 1858, it took the smell of untreated human waste on the River Thames - which had been causing cholera outbreaks, making its way into the halls of the British Parliament for a drainage system to be proposed and rolled out.
Forty years later, in 1894, large cities the world over were drowning in horse manure, something the advent of motor vehicles allayed us of.
Today, you don’t need to worry about such outbreaks, as sanitation infrastructures ensure our roads and parks are kept clean, human waste is kept out of sight (except for in San Francisco), and your rubbish is collected frequently.
Not only that, but you’ve got a smartphone in your pocket with the history of recorded knowledge, as well as untold terabytes of cat videos, at your disposal. As science fiction writer, Arthur C Clarke, put it, such technology would be indistinguishable from magic for people living just 100 years ago.
Adam Smith was indeed right when he said that capitalism would benefit the consumer more than the producer.
Unlike the benefits conferred to almost all consumers in the developed world, the enterprise of business, of producing, is a risky pursuit. Not only is it expensive, and not only does it require a wide and deep skillset, but 20% of small businesses fail in their first year, and 50% fail after just five years. It is far safer and easier to be a ‘worker’ than it is to be controlling the means of production.
And the conditions for most workers in the developed world today are a far cry from that vilified in Karl Marx’s 1867 book, Das Kapital.
The average wage for your typical industrial worker in the United States at the time was just 10 cents per hour (equivalent to about $1.80 today). People worked on mind-numbingly repetitive and often physically demanding tasks for 10 to 16 hours a day for six days a week, usually with little break, in filthy and dangerous environments, with no recourse for injuries and bodily harm caused.
Today, the average American makes US$19.33 per hour (a 10-fold increase), and works in much more comfortable environments, enjoying the benefit of occupational health and safety codes, bullying and harassment codes, eight hour workdays, weekends and public holidays off, frequent breaks, and in many cases, company-sponsored healthcare. And in other developed nations such as the United Kingdom and Australia, healthcare is heavily subsidised by the Government.
The working world that Marx rightly lambasted is no more, and today's workers enjoy vastly better and more comfortable lives than even the aristocrats of the 1850s.
However, as Kahneman and Deaton famously concluded, both life satisfaction and emotional wellbeing increases with income, but only up to US$75,000 per year.
Emotional wellbeing does not increase beyond this point.
This makes sense upon reflection. Low income exacerbates the pain of ill health or sub-optimal personal relationships, but high income doesn't mitigate these hardships. One can’t always buy their way out of bad relationships, ailing health, or a poor relationship with oneself.
This is where the wheels start to fall off for capitalism and its benefit to humanity.
But capitalism is ultimately a tool, and like any tool, how you use it is what matters. A hammer is the perfect tool to pierce a nail through my wall, but not so much when it comes to tightening a bolt on my motorcycle.
We set ourselves up for disappointment when we conflate higher income with emotional wellbeing.
For so many of us human beings, we are tortured by an innate sense that we are not enough - something we unconsciously learned in early childhood. We then go off, on a lifelong heroes journey in search of money, sex, status, objects, and recognition, thinking that these external sources of inner validation will liberate us from our suffering, and make us feel happy all of the time.
Harvard psychologist, Tal Ben-Shahar, calls the arrival fallacy; “the illusion that once we make it, once we attain our goal or reach our destination, we will reach lasting happiness”.
But once we get there, the happiness associated with chemical reactions quickly wears off, and we set sail in search of even more external rewards to give our inner world a sense of peace.
Paradoxically though, we do so to the detriment of our inside worlds.
Happiness as defined by Buddhism, Stoicism, and numerous other schools of wisdom and philosophical inquiry, comes down to letting go of attachment to desire and what should be, and accepting what is.
This very notion of acceptance is in conflict with the relentless pursuit of more that embodies capitalist cultures in the west. A newer iPhone, a faster car, a bigger house in a better postcode, a hotter girlfriend, a higher-status and higher-paying job, more expensive and rarer sneakers, another designer handbag...the list goes on.
Confucius said that "What the superior man seeks is in himself; what the small man seeks is in others." Capitalism may have liberated hundreds of millions of Chinese from poverty, only to see many of them forget their Confucian roots, and form lines outside of Prada, Gucci, and Louis Vuitton stores worldwide.
All of this points to a declaration that who we are today and our circumstances today not being good enough. It points to a rejection of our current reality. And when our current reality doesn’t meet our expectations - or the expectations that were programmed into us by society, upbringing, and Instagram - suffering ensues.
This is why millionaire rockstars, entrepreneurs, and actors routinely check themselves into therapy and rehab, take all manner of anti-depressants, and are susceptible to high rates of self-harm and suicide. It’s not for lack of income, material possessions, or sexual partners that they find themselves in dark places. It’s typically due to a lack of self-acceptance and inner peace.
As Roman Stoic philosopher Seneca put it, “It is not the man who has too little, but the man who craves more, that is poor.”
Tech millionaire Naval Ravikant says that “the reason to win the game (pursuing income and external rewards) is to be free from it.
Winning the game doesn't necessarily mean you need to make partner at your law firm, or build a billion dollar unicorn. It just means making enough, as defined by you, and not society, your parents, Instagram influencers, or some advertiser.
This number is typically much lower than the above-mentioned folks, and perhaps even yourself, would lead you to believe, per Kahneman and Deaton’s work, .
But most people forget to stop playing the game once they've won it. Instead of redirecting their energy and time to the things that bring true emotional wellbeing - meaningful work, meaningful relationships, philanthropy and volunteering, and working on reconciling our outer worlds with our inner worlds, they simply work longer and harder, in pursuit of more and more stuff.
Meanwhile, the person on US$70,000 a year, living within their means doing work they enjoy, spending spare time with people they love, and volunteering for worthwhile causes on weekends, might be orders of magnitude happier.
Does this mean that we should put our pens down and stop pursuing goals? In the case of the individual and their emotional wellbeing, it’s not that we stop pursuing but rather, we pursue in service of others. In other words, instead of achievements, we think more in terms of contributions.
As Karl Marx himself put it, “History calls those men the greatest who have ennobled themselves by working for the common good; experience acclaims as happiest the man who has made the greatest number of people happy”.
Adam Smith might’ve been right when he said that it is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. But he wrote those words when most of the world’s population was merely fighting for survival, lodged at the bottom of Maslow’s hierarchy of needs. Today, with our basic physiological and safety needs having been met, more of us are slowly investing more of our time and money into serving others, manifest in millennials and Generation-Z giving the most of all generations.
Of course, people driven purely by external validation have helped to propel humanity forward. They have done great good for the world to satisfy their own nagging sense of worthlessness and of inner chaos, but despite their achievements and contributions to the world, they often wind up miserable themselves, never content with who they are and what they have done, forever seeking more.
Happiness cannot be pursued. It starts by looking inwards, and accepting who we are.
Perhaps greed is good after all, but only if it buys us freedom from the game and the freedom to serve.
Steve Glaveski is on a mission to unlock your potential to do your best work and live your best life. He is the founder of innovation accelerator, Collective Campus, author of several books, including Employee to Entrepreneur and Time Rich, and productivity contributor for Harvard Business Review. He’s a chronic autodidact and is into everything from 80s metal and high-intensity workouts to attempting to surf and hold a warrior three pose.