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Outdated Logic:
The ideas of giving and reciprocation discussed in this chapter are ideas that I do not think hold up very well in today’s society. My primary reason for thinking this is because our economy is mostly based on money being exchanged for goods and/or services. These transactions are either high in volume and low in importance or low in volume and high in importance. Because of this, it is rare for consumers to provide any material reciprocation to the source of the products they purchase. The only aspect of these transactions that might have a lasting impact is a customer’s loyalty to a specific company. Even though this might serve as some sort of reciprocation, I feel like it is better categorized as successful marketing. To summarize, I feel that any attempt to suggest that the principles of capitalism seemingly evident in primitive societies carry over to our current society results in a drastic oversimplification of the modern-day marketplace in the United States and the world.
Harmfulness of Welfare:
Gilder’s stance on excessive welfare handouts is the only stance he shares in this chapter that I fully agree with. He writes that “excessive welfare hurts its recipients, demoralizing them or reducing them to an addictive dependency that can ruin their lives." After I was able to decipher his definition of “giving”, I found this to fit very well with the definition. Since Gilder seems to define giving as an exchange with some promise of future reciprocation, I can see how excessive welfare is harmful. If someone is receiving welfare payments, then they are likely in a situation that prevents them from offering any future return to the source of the payments. In the big picture, this hurts the economy. In the small picture, this hurts the pride of those receiving the payments because of their inability to reciprocate.
The Law of Reciprocity:
I believe that the law of reciprocity inevitably creates a cycle of the parties involved in an exchange to continuously one up the other parties with the goal of getting equal. I think this because in my mind there are only two possibilities concerning the law of reciprocity. First, the parties continue to give each other gifts of the same value, and monotony would quickly ensue as a result. Second, the parties must constantly increase the value of the gifts they exchange. I initially considered this cycle to be harmful, but I can see how the consistent demand for new and improved gifts or goods would result in higher quality of life for those who have access to the newly-created goods.
Sympathy and Giving:
I generally understand the point Gilder is trying to make when he is discussing sympathy and giving inside of capitalism, but I think that they are being used to paint capitalistic principles in an overly good light. For example, if entrepreneurs have the sympathy and foresight to determine what goods and/or services consumers desire before they are even able to voice their desires, then the entrepreneurs have ample time to properly monetize the newfound product, taking advantage of an unknown and untapped market that is soon to emerge. From a business standpoint, this is a good thing. However, I feel it is largely unfair to the consumer if the sympathy stops once the secret consumer desire is discovered. At one point in the chapter, Gilder writes, “In deciding what new goods to assemble or create, the givers therefore must be willing to focus on the needs of others more than on their own. They must be willing to forgo their own immediate gratifications in order to produce goods of value to the beneficiaries.” While this sacrifice of immediate gratifications seems very noble, I do not believe that it is at all significant. In my opinion, individuals who are in a position to create new goods or services for other people do not have many immediate gratifications they would need to forgo. In fact, I consider the ability to create a luxury that many lower-class individuals do not have.
When Greed Takes Over:
Even if capitalism does begin with giving, sympathy, and reciprocity, I think the next step in capitalism is greed. Gilder writes, “The grasping or hoarding rich man is the antithesis of capitalism, not its epitome, more a feudal figure than a bourgeois one.” He continues, “To the extent that the capitalist allies himself with the government or uses other modes of force in an effort to predetermine outcomes, he is just another kind of socialist, sometimes termed a fascist." Gilder obviously chose numerous buzzwords to include in these passages in an attempt to outcast any capitalists that are greedy or any capitalists that try to unjustly sway the government. Unfortunately, I think that a large number of prominent capitalists possess these “alienating” characteristics.
