by Mike Masnick
Thu, Jan 24th 2008 10:32am
Many people seem to think that capitalism is only about money. It leads to bizarre and incorrect claims suggesting that behavior that doesn't maximize dollars isn't "rational," as neoclassical economists would suggest. But, that's generally a misunderstanding of economics -- where it isn't money that's the driving force but the utility or the benefit that a person receives from any given action. Quite often, that benefit is in the form of money, but it certainly doesn't mean that it always needs to be. As we all know (but sometimes need to be reminded about), money does not equal happiness (utility). So, while it's a good thing to hear Bill Gates is giving a talk in Davos about embracing capitalist principles in urging companies to take up issues dealing with the world's poor, it's hardly a "different" capitalism or a "kinder" capitalism, as implied by the Wall Street Journal. It's actually just a more accurate understanding of capitalism -- where it's about decisions based on actual benefits, which include both monetary and non-monetary benefits.
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