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An informal, stream-of-consciousness reflection on business ideas, events and issues in modern business, modern life and with some specifics to the web-software industry by Paul Tomori, Internet Entrepreneur

Does Bernard Madoff Prove Capitalism To Be Flawed? Does a knife bandit prove knives to be evil? By Paul Tomori Friday, January 23, 2009 at 17:18:50 (EST) As one who "presides" over some small corporations, I am no doubt regarded as a capitalist. Proudly so. My view of capitalism is fairly simple. It's merely a system that allows people to freely create and innovate, then trade their creations for compensation... and to keep that compensation or dispense with it by their own judgement. In such a system, one is free to succeed and free to fail. There were many people who did NOT invest with Bernard Madoff, because their due diligence raised suspicions about his methods. There were others who invested on the advice of others, hoping that someone else had done the due diligence. And of course, there were people who did their due diligence and invested, because by all their observations, the investment would be safe. Such is capitalism. You are free to succeed and free to fail... and free to "take a chance". The cautious person would have diversified their holdings if they were going to take a chance with Madoff - they still would have lost some wealth, but they would still have backup wealth in other investments. People are calling for more regulation, and perhaps that will help, but scammers always have a way to outsmart the regulators, so I believe more regulation would just give people a false sense of security. At the end of the day, one must realize that investing in just about anything comes with a risk, a risk that is the investor's responsibility no matter how much they would like to defer that responsibility to someone else or some big government. Capitalism, like life is neither fair, nor unfair. It just is. Return To Blog Index