Dirty secrets of capitalism??

The speaker in this video of a TED talk, Nick Hanauer, claims the “dirty little secret” of capitalism is neoliberal economic theory. He claims the assumptions of neoliberalism are wrong, especially “selfishness.” The “new” economics he supports holds cooperation and reciprocity as central. He doesn’t explain what “reciprocity” means. Is it trade, in which customers pay for products or services? Does it include employers paying its own employees?

The Mises Institute responds to that part of the TED talk here. Excerpts:

- “But Hanauer can’t bring himself to praise that kind of cooperation and reciprocity because market exchange also involves self-interest and competition.”

- “Reciprocity and cooperation are indeed good things. But contrary to what Hanauer thinks, they are, in fact, the very basis of capitalism, a system of voluntary exchanges.”

Like many people do, Hanauer seems to regard selfishness and altruism as wholly mutually exclusive. Some actions are entirely one or the other, but not all are. Suppose a wife buys groceries for herself, her husband, and their children. Suppose one partner of a business acts for the benefit of the partnership that benefits the other partner(s) as well. Are such actions selfish or altruistic? Or both?

Hanauer claims that neoliberalism holds that the purpose of a corporation is only to enrich the shareholders. Not exactly, at least per the main advocate of a similar idea. Milton Friedman said it was the main purpose (link); “main” and “only” aren’t identical.

More than three years before this TED talk, Richard Epstein debated Hanauer about Hanauer’s idea of “middle out” economics (contra “top-down” or “trickle down”) and a minimum wage (link).