Broken Capitalism

Think of the people you most admire - either famous or personal to you. Have any of them got to be who they are through following entirely extrinsic motivation such as personal financial gain? Anyone motivated purely by end rewards will not create something truly great. Look at the past decade: sure, Steve Jobs was not adverse to making money - but his motivation in an iPhone being so great was intrinsic - he wanted an iPhone to be great. If he wanted only to maximise money for shareholders, he would have listened to focus groups who said it wasn’t needed or wanted. Yet he already had a bucket of money and a vision - something that would have ended up worse if he had been motivated purely by the financial reward. This really is the crux of what’s broken about capitalism today - text books say it’s all about personal extrinsic monetary bonuses, which is the complete opposite of why Apple is now one of - and at times the - most valuable company in the world.

Another analogy - think of the great albums you love. How many were made purely for financial reasons? And think of the albums made purely for financial reasons (e.g. most major label releases today) - how many of those are great albums? When those same labels began in the 60s and 70s they wanted to put out the amazing music they had heard. Again, they didn’t mind making money out of them - but that was not their primary motivation. Once those founders slowly one-by-one sold out to shareholders and investors (those faceless beings who only care if their share-price goes up or down) and so the motivation has switched to an extrinsic one. Shareholder return.

Bonuses make the whole thing worse - by encouraging people to be more focussed on the extrinsic.

It’s pretty simple and obvious when you look at it - someone’s motivation determines how good a product can be. Adam Smith alas assumed that men were almost exclusively concerned with extrinsic motivation, and with that assumption inspired a whole capitalist system that ultimately leads to diminishing returns - both culturally and (ironically) economically.