Alan Schwartz delivers his argument on capitalism at the IQ2 Debate


IQ2 Debate: Capitalism is destroying us (FOR)

23rd of October 2018

Remarks as prepared



Today I thought I would share with you a story from Jewish folklore that I have always found fascinating.


The myth of the golem.


The story is set in 16th century Prague.


The Jewish community was under attack by anti-Semitic mobs. So a local Rabbi and mystic, Judah Loew, known as the Maharal, set out to find a way to defend his community.


He gathered clay from the banks of the Vltava river and molded it into the form of a man.

Rabbi Loew was also a scholar of the mystical Jewish text, the Sefer Yetzirah, or “Book of Creation.” This remarkable text reveals how God created the entire universe by simply manipulating the 22 letters of the Hebrew alphabet.


Jewish scholars say God didn’t create things via the wiggle of a metaphysical finger; God created everything using the power of words.


And that’s how the Maharal animated the golem. With words. He inscribed the word “emet,” which means “truth”, on its forehead.


The golem sprang to life and proved to be a powerful and obedient ally. But, gradually, it slipped out of Rabbi Loews control. This was because the golem was a machine. It did not have a human soul or a moral compass. It would interpret the orders given to it literally, often leading to tragic outcomes.


Eventually, the golem of Prague ran amok, threatening to destroy its creators. So the Maharal was forced to undo his magic. He erased the letter “e” from the word “emet” so it just read “met”, which translates to “dead,” and the Golem returned to lifeless clay.


The moral of the story


The moral of this story is probably familiar to all of us, perhaps because we retell it - and relive it - every generation. We have a long history of using our knowledge and creative powers to build things that are supposed to protect and enrich us, only to find that when they are given a life of their own they eventually surpass our ability to control them, and they run amok. Ultimately, we’re forced to rein them in lest they destroy us.




This is the story of Frankenstein’s monster, of HAL 9000, of the Terminator.

It’s also the story of capitalism.


Just as the golem was formed using the vast creative power of words, so too was capitalism. Although this time it Adam Smith’s words in his groundbreaking book The Wealth of Nations.

Like the golem, capitalism was supposed to protect us, to liberate us from toil, to free us from want. And there is no doubt it has been a powerful and obedient ally in this regard. It has certainly increased our material prosperity by a staggering amount over the past few centuries.


But, like the golem, the capitalist system that we created is running amok. Capitalism’s single minded focus is on one thing and one thing only: generating ever greater financial profits. It has no regard to its impact on human health and wellbeing or social cohesion and it has no regard to its impact on our planet. It is churning out products that are harming our health. It is burning through precious natural resources. It is polluting the environment and irrevocably changing our climate in such a way that will undermine its own ability to function at all. Like the golem, it is not only destroying us, it’s eating itself.


Under capitalism, a soft drink company can make huge profits whilst selling products that make people sick. Together these illnesses cost Australians $14 billion dollars a year. Yet the soft drink companies can turn a healthy profit because they don’t pick up this tab.


Capitalism’s obsession with production and consumption is exhausting our supply of natural resources. We are currently consuming them at a rate two to three times higher than they can be replenished. If that continues, there won’t be anything left to turn into financial profit.


The environmental cost of capitalism


Then there’s the environmental cost of capitalism. The last two centuries have seen widespread degradation of the land, air and sea. We’ve seen deforestation devastate the “lungs” of the world. We’ve seen a loss of plant and animal species on such a scale that is matched only by the mass extinctions of the distant past. We’ve seen the destruction of fragile ecosystems, the pollution of waterways, and the emission of billions of tonnes of carbon dioxide into the atmosphere.

How did this happen? How did capitalism turn from being a force for good to a force that is destroying us?


It’s because when we created capitalism, we carved the wrong word into its forehead. We didn’t carve “value” or “flourishing”. The word we carved was “profit.”


The orders we gave capitalism were simple: create financial profits. And it has followed this order with ruthless efficiency. But “profit” - as we understand it today - ignores many of the things we truly value, the things that actually contribute to our flourishing on this planet. It ignores the value of our physical and mental health, it ignores our relationships with the ones we love, it ignores the strength of our communities. It ignores the value of clean air and unpolluted water, the value of the natural environment, of biodiversity and a stable climate that is essential to our flourishing.

Capitalism is destroying us but the the myth of the golem holds the key to our salvation. The myth of the golem is a story about the power of words, for good and for bad.


Redefining capitalism


We have the power to use words to redefine capitalism, to expand its remit beyond financial profit so that it advances human flourishing and the preservation of the natural world.


This is precisely what I am working on through a project called the Universal Commons. The Universal Commons acknowledges the power of the market, but rejects the idea that it should have a single minded focus on generating ever greater financial profit. Instead, it seeks to target economic activity on producing the things we actually do value, like good physical and mental health, on strong communities, on preserving and repairing the natural world.


We know that rewriting capitalism will be a David and Goliath battle. But it’s a battle we cannot afford to lose. For if we do nothing, if we continue with capitalism as it is today, it will not only make us sicker, more anxious, more unequal, but it will lead to environmental collapse that could pose an existential risk to all of us. That’s why capitalism is, without a doubt, destroying us.




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