Most capitalists would probably dislike the title of religion, but as religions go, capitalism can at least hold its head high. Unlike other religions that promise us a pie in the sky, capitalism promises miracles here on earth – and sometimes even provides them. Much of the credit for overcoming famine and plague belongs to the ardent capitalist faith in growth. Capitalism even deserves some kudos for reducing human violence and increasing tolerance and cooperation. As the next chapter explains, there are additional factors at play here, but capitalism did make an important contribution to global harmony by encouraging people to stop viewing the economy as a zero-sum game, in which your profit is my loss, and instead see it as a win–win situation, in which your profit is also my profit. This has probably helped global harmony far more than centuries of Christian preaching about loving your neighbour and turning the other cheek. **
From its belief in the supreme value of growth, capitalism deduces its number one commandment: thou shalt invest thy profits in increasing growth. For most of history princes and priests wasted their profits on flamboyant carnivals, sumptuous palaces and unnecessary wars. Alternatively, they put gold coins in an iron chest, sealed it and buried it in a dungeon. Today, devout capitalists use their profits to hire new employees, enlarge the factory or develop a new product.
If they don’t know how to do it themselves, they give their money to somebody who does, such as bankers and venture capitalists. The latter lend the money to various entrepreneurs. Farmers take loans to plant new wheat fields, contractors build new houses, energy corporations explore new oil fields, and arms factories develop new weapons. The profits from all these activities enable the entrepreneurs to repay the loans with interest. We now have not only more wheat, houses, oil and weapons – but also more money, which the banks and funds can again lend. This wheel will never stop, at least not according to capitalism. We will never reach a moment when capitalism says: ‘That’s it. You have grown enough. You can now take it easy.’ If you want to know why the capitalist wheel is unlikely ever to stop, talk for an hour with a friend who has just earned $100,000 and wonders what to do with it.
‘The banks offer such low interest rates,’ he would complain. ‘I don’t want to put my money in a savings account that pays hardly 0.5 per cent a year. You can make perhaps 2 per cent in government bonds. My cousin Richie bought a flat in Seattle last year, and he has already made 20 per cent on his investment! Maybe I should go into real estate too; but everybody is saying there’s a new real-estate bubble. So what do you think about the stock exchange? A friend told me the best deal these days is to buy an ETF that follows emerging economies, like Brazil or China.’ As he stops for a moment to breathe, you ask, ‘Well, why not just be satisfied with your $100,000?’ He will explain to you better than I can why capitalism will never stop.
