Capitalism and Social Justice

In the past week, the theme of capitalism vs. social justice has cropped up over and over.

First, I read an amazing set of articles from the NY Times that chroniced the life of a homeless child. Then, I perused Pope Francis’ recent letter, wherein he criticizes unfettered capitalism.  And today, Fred Wilson and Bijan Sabet blogged about the limits of capitalism (here and here, respectively).

Yet, at the same time, I’m a venture capitalist. And, in college, I studied developmental economics and read about the limits of state-sponsored economies. For examples, forced collectivization in China and the Soviet Union created wholesale economic collapses and millions died from starvation. The intent was good: eliminate poverty and the exploitation of labor.  The results were disastrous.

And, our government is learning that transforming one-seventh of our economy is really hard.  Changing the behavior of millions of consumers, insurance carriers, doctors and hospitals creates surprise “unintended consequences.” It’s really, really difficult to change human behavior and tinker with incentives.

So, I believe in compassion and capitalism. But, I find the balance of the two to be challenging personally. On one hand, our family has a structured charitable giving program. And, I gave $20 the other day to the person who filled my car with gas. On the other hand, the next day, I chose not to give money to a woman begging for money in the middle of a snow storm.

I don’t know about you, but finding the “Goldilocks happy median” isn’t easy for me.

Leave a Reply