Capitalist myths and the social consciousness of our time (continued--02)

Efficiency versus effectiveness:

Another one of market economy myths is efficiency as the ideal of the human society. Economists as well as the corporate media love to talk about how capitalism increases efficiency but they refrain from using the term effectiveness as much as possible. This is apparent in the literature. And efficiency is portrayed as necessarily a good thing! But is it really? And if it is, what is it good for?

Lets first examine the definition of these two terms. Effectiveness is all about the end result. It is the ability to get from point A to point B using available means. Effectiveness involves the achievement of goals that support the initial vision and mission. Being efficient, however, means accomplishing the assigned task with minimum wasted effort and maximum productivity. It is the ability to carry out defined and limited actions quickly through the use of all available resources. Being efficient does not necessarily lead to effectiveness, as it does not require a vision of the end result.

The problem begins with the confusions between effectiveness and efficiency, fostered by capitalist propaganda. Market capitalism has successfully sold the idea of specialization based on comparative advantage to the public. The idea of comparative advantage, being purely a logical exercise, makes total sense. However, it does not have the capacity (and does not aspire) to capture the whole reality, including many unpredictable factors that cannot be captured in logical exercises. The result of over-specialization of the society has been nothing but a loss of sight for the larger picture. This has had a significant reflection in the education system, especially the diminishing desire among the public for liberal arts education. Individuals get trained as specialists to take part in an efficient cycle of production of wealth in their respective areas. Those who contribute to different pieces of the puzzle have no incentive to acquire knowledge over the larger picture. The result is a system that is extremely efficient on micro level but has no general direction on the macro level. If one looks at the system from above, it will look like an untidy puzzle that makes no overall sense. In other words, the goal and therefore the effectiveness are lost in the system.

Lets take a scenario where the issue of survival is at stake. One major aspect of survival is nutrition. To live a healthy life, one requires a certain amount of nutrients per day, otherwise his/her survival will be in jeopardy. Market economy’s response to this concern will focus on efficient food production. The point of departure becomes lack of food and the objective becomes more (and possibly cheaper) food. Right in this moment, the capitalist economy looses its sense of the larger picture, i.e. survival and/or healthy life. It focuses on getting rid of hunger. Capitalist economy concentrates its resources on increasing efficiency of food production. This shortsightedness easily results in secondary concerns. The secondary concern here would be: what if the increased efficiency in producing food leads to products that bring about obesity, high cholesterol, reproductive complication and increased vulnerability to genetic mutations. The answer of a market capitalist would be: market will correct this. More efficient drug industry together with a more efficient workout industry will solve this. A more efficient drug industry is very likely to take advantage of scientific shortcuts that can easily get us to another concern: what if the new cheaply available drugs lead to further health complications. Again the response of the market capitalist will be: market will correct this through another innovation, which keeps those who can afford it alive, but not necessarily healthier. And these segments of efficient market solutions to immediate problems keep emerging and creating money-making opportunities for those who have the tools to grab the opportunity. At the end of the line, we may end up with a person who does not live a healthy life and has spent more money on a combination of unhealthy food; workout facilities; and medicine and healthcare, than s/he would spend if s/he was left with no choice but to purchase a more expensive food in the beginning of the cycle.

In this fragmented system of efficient pieces, the end result, which is the effectiveness of the system, easily gets lost. It is not a stretch to think that by increasing efficiency in food production, which was supposed to help with longevity, the market economy actually makes some people only as health as they were before (the middle class and the rich) and makes the rest less healthy and possibly less likely to live long. However, the market had functioned and created extra money making opportunities that will serve those who are best positioned to take advantage of it!