Capitalism and morality
Posted on June 19th, 2012
By Charita Wijeratne- Courtesy The Island
When great minds disagree, the humble are free to intervene ƒÆ’‚¢ƒ¢-¡‚¬ƒ¢¢”š¬…” though at some risk. So, with due respect to the intellectual prowess of Gunadasa Amarasekera and R.M.B. Senanayake, I venture to make some comments on the morality and immorality of capitalism, the bone of contention between the two giants. I am drawn into this controversy especially after reading the latterƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s article titled is capitalism, or the Free Market Economy an immoral system? In the Island of 21st May 2012. I confess that his references to Karl Marx and Adam Smith momentarily held me back, because, my laborious efforts to master their works had come a cropper. Such being the case, this intervention is more in the way of impersonal conciliation rather than confrontation. Even to do that I was urged by his seemingly prejudicial and ambiguous assertion or judgements on those who tend to be critical of capitalism, which is the historical stage man is just passing through in the long history of his evolution.
After some terse comments on the feudal system for degrading manual labour and for upholding the caste division of labour, RMBS pushes aside Karl Marx with a side jab by saying that the distinctive characteristic of capitalism is ƒÆ’‚¢ƒ¢-¡‚¬ƒ”¹…”not the private ownership of production and exchange as Marx thoughtƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢. As proof he points back at the feudal stage where he sees the existence of private ownership, because, ownership “was with the king, the clergy and the nobilityƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢. This is a stark contradiction since common people did not own land. Besides, land was not a saleable commodity under feudalism. It could not be disposed of at anyoneƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s will or fancy. Land held by the subjects were royal grants which were liable to be taken back at the KingƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s will.
Contrary to Marx, the writer insists that ƒÆ’‚¢ƒ¢-¡‚¬ƒ”¹…”the emphasis on creativity and inventionƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢ was the distinctive characteristic of capitalism. Obviously, the allusion is to the great advances in science and technology that revolutionised productivity, specifically the spinning jenny, the steam engine, electricity, the internal combustion engine, radio, TV and so forth. We hasten to add that capitalism inspired unfathomable advances in commerce, navigation, political reform, education and culture in general. Indeed, the very survival of capitalism depends on the uninterrupted revolutionising of the means of production.
We may, however, ask whether ƒÆ’‚¢ƒ¢-¡‚¬ƒ”¹…”invention and creativityƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢ are exclusive to capitalism. The Biblical creation apart, human history advanced from epoch to epoch, because, Man, unlike other species, was able by artificial means to adjust himself to changes in nature. Although ManƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s reproductive capacity is much lesser than that of most animals, he was able to survive and increase in number because of his creativity and inventionƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢. Thus, they were characteristics not only of capitalism but of all social and economic systems through which man advanced. In our school history we learnt about geographical discoveries, the Renaissance, Greek Scientists, mathematicians, astronomers etc and going further back, about printing, gravity, and earthƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s rotation. The teacher even guided us into prehistory to show the origins of making fire, irrigation, the plough, harnessing animal power, the canoe, the wheel, the arch, the solar calendar, alphabet, accounting, bronze, iron fermenting, glazing, domestication of cereals, and so on and so forth. In this way, RMBSƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢ ƒÆ’‚¢ƒ¢-¡‚¬ƒ”¹…”creativity and inventionƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢, far from being distinctive characteristics of capitalism, represent the continuation of ManƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s struggle for survival since geological times. And that was what enabled man to become the fittest!
So, the writer need not try to evade his history lesson by saying, ƒÆ’‚¢ƒ¢-¡‚¬ƒ”¹…”the genius of capitalism is that it has released human ingenuity and creativity, which no previous economic system was able to doƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢. What happened was something quite different: new inventions and discoveries reacted on man and society to bring about new social and economic orders and new economic orders made way for further inventions. It is incorrect to say which caused which, like the egg and the hen puzzle.
Judgments on moral and immoral qualities of capitalism, or any other social order, cause utter confusion and even embarrassment, because the material world, including societies, could be properly recognised only if it is approached with a humble and an unprejudiced attitude. Whether the profit motive is moral or immoral depends entirely on the relative time and social attitudes. For example, the acquisition of profit was considered disrespectful in feudal times and even within some rural communities today. Down to the early 20th century in Sri Lanka trading was a vocation for the ƒÆ’‚¢ƒ¢-¡‚¬ƒ”¹…”nobodiesƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢. Personal experience would be in place, once, as a village school teacher in a very remote locality I happened to offer a payment to the chief of the house I lodged. To my embarrassment, he decried remaking ƒÆ’‚¢ƒ¢-¡‚¬ƒ”¹…”what custom is it to give someone a bed and a morsel and take money? Every society has its own values and its unwritten code of ethics relative to the mode of livelihood prevailing at the time. It would be irrational for people living in different times or under different modes of livelihood to pronounce judgements on them. It is the same when RMB chooses to condemn the caste system that prevailed in earlier times. All the world says is that he is certain to adopt a more impersonal attitude if he cares to study the context in which caste system thrived and the division of labour at its base. The veracity of his assertion that manual work, including farming received inferior treatment is doubtful and arguable. In any case, such vocational or social discrimination does and not seem to be alien to our own bourgeois society as is glaringly seen from wage disparities between manual and white collar workers. In most work places and institutions, facilities such as toilets, lunch rooms etc, are provided separately according to rank. A manual labourer is not addressed in the same manner as a fellow office worker. The much boasted egalitarianism is at best an illusion or an abstraction. Therefore the question whether any economic-social system is moral or immoral is irrational, misleading and sometimes even offensive, the writerƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s decoration of Adam Smith with a virtuous claim of never advocating ƒÆ’‚¢ƒ¢-¡‚¬ƒ”¹…”the naked pursuit of self-interestƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢ is as glorious as a soap dealerƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s advertisement claiming effectiveness against contagious diseases. Indeed, the primary concern of all businessmen, politicians, and even religious leaders, to wit, is public welfare, and a halo of altruism adorns them all.
Perhaps as an apology for capitalism the reader is bewildered with a comment to the effect that humans are inherently and incurably unequal. An upasaka attributes inequality, even sex inequality to past karma! Having failed to find equality in the entire capitalist world he resigns with a forced belief that it is unattainable by Man. Even a more modest understanding like poverty reduction is not found in any of the mature capitalist countries. He stumbles on it in an unexpected place and jubilantly exclaims, ƒÆ’‚¢ƒ¢-¡‚¬ƒ”¹…”reduction of poverty has been possible only in China, a country that took off into economic development from a communist revolution. China proceeded to restructure its economy on the basis of a centralised plan, much to the chagrin of capitalist countries, which retaliated by insulating China with a cordon sanitaria. Central planning or any sort of government intervention is alien or inimical to capitalism. So, China as an example of poverty reduction attests the effectiveness of a planned economy as against a capitalist economy, which is not only free, but is a free for all. China was resurged not along a capitalist or a strictly socialist passage, but by prudent planning, taking cognisance of economic priorities.
The articles makes out that economic liberty, freedom and property owning are synonymous and brazenly implies that property owning is a precondition for ƒÆ’‚¢ƒ¢-¡‚¬ƒ”¹…”freedom of thought and libertyƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢ in a sense, a Marxist would agree, because, in a bourgeois society such things as freedom, leisure, and culture are exclusive to the propertied class. Restrictions on liquor consumption is decried as enforced virtue and an infringement on freedom. Under such sort of freedom resources may be invested not to produce the urgent needs of the people but on what is likely to return the biggest profit, say liquor for example. What matters at the bottom line is profit and not survival. And that perhaps is the noblest moral!
The relevant question to ask would be whether a society is rational when, as in the USA, 400 individuals own more wealth than the rest put together. How national is a society that annually spends trillion dollars on arms and the army? In Sri Lanka, thousands starve when tons and tons of paddy rot in stores. How rational is it to squander billions of borrowed dollars on unwanted harbours, speedways, airports, flyovers and on ceremonies, when insolvency is imminent? A high growth rate, but growth for whom? Corruption, nepotism and waste at all levels of governance reflect the irrationality of decadent capitalism. There is freedom from accountability. For education, health and other basic needs people will have to wait until those at the top are fed. All species of social leaders, intellectuals and the media have fallen in line, lest they get into bad books.
Such is the ƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢distinctive characteristicsƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢ of decadent capitalism. But, right now, the thunder of capitalism in crisis echoes down to all corners of the earth.
Concerned social scientists ask whether we are seeing the end of capitalism. Leading economists, including our own, seem to stick to the epithet ƒÆ’‚¢ƒ¢-¡‚¬ƒ”¹…”silence is goldƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢ objectively, we see that the present crisis is structural, unlike the periodic crisis of earlier times. Secondly, the rudiments of Marxism that we have been able to gather tell us that unlike all previous economic systems capitalism is dynamic, its survival depends on its continuous revolutionising of productive forces; it cannot survive stagnation; Marx spoke of the decisive contradiction between the ever-increasing socialisation and productivity on the one hand and private appropriation of profit on the other. Thirdly, the left victories across Latin America can be an encouraging influence in crisis-ridden capitalist societies. Fourth, although the objective prerequisites for a transformation exist in these countries, a leadership with a high level of consciousness, committed and forceful to lead the masses of people is abysmally lacking. People too are apathetic, those that currently fill parks and streets are inarticulate crowds that rush out to vent their anger, the consequences of urging such rabble in Egypt and Libya are too well known.
None the less, without being over pessimistic like RMBS and unassailable inequality, we may see hope in the Marxian view that there are unique moments in history when social consciousness leaps forward to seize social being and change it.
June 20th, 2012 at 2:42 am
The problems are not with capitalism or socialism (all isms from the west) but it is about the lack of institutions that demand morality and good governance from the ruling classes and corporates. Buddhist believe that it is the thought that determine the world. The thoughts unfortunately that is governing the world is corruption. The need of the hour is good institutions and good governance.
June 20th, 2012 at 9:26 am
Capitalism is Greed. If greed is not controlled, then leads only to disaster and suffering. American Capitalism led to some very very rich families, individuals and some Wage/Salary earners. Some people earns hundreds od millions a year. What for. Then the govt’s wish always is to some how maximize the wealth they have. At the expense of whom. That is where poverty comes. Capitalism needs poverty. Other wise, struggling people will not struggle because they are in the “have” class. but, in order to keep “have class” running and active the system needs “Have Nots” too.
Morality comes from where. It is from a a place where it says that GOD is above all and he/it/she plans the life of everybody. On the other hand, God controls the life of beings who are below him. So, those beings control less powerful humans and not powerful at all animals…. So, that is the system. IF they cannot control, then the war and subjugation.
They are trying to maximize the wealth at the expense of everything. But, that is not long lasting and degradation of the system has begun from within.
In other words, any system that can not change or adopt will disintegrate.
I took the western Capitalism as the example, and the word Morality from the Judeo – Christian culture that the word came from.
In Chinese Capitalism – They believe of giving too. That is a eastern custom. They don’t exploit for the sake of exploitation and Greed. They give something to others and take what they want from the other.
Some appreciate “democracy”. This democracy is a fraud. Read how some kings had behaved. Good Kings were truly like one’s parents. They really grieved for their citizen – subjects and look after the country. But, there is no such thjngs inside Democracy.
June 20th, 2012 at 10:16 am
Any system is as good as the people who implement it. Every system needs to change and adopt as suits to the world.
Both Capitalism and socialism have it’s own faults depending on how you try to interpret those.
Catpiatalisn needs invention because it promotes consumerism. USSR – communist politics also promoted invention and some of the inventions that USSR had never thought of inventing by the American capitalism because capitalism invented ONLY for the market. USSR did not have technology to produce a Coke can. But, Russia sold a nuclear reactor to US and that could be used in deep space exploration satellites to produce energy.
People needs discipline. For some people it needs to be ENFORCED. See the difference between Buddhism and Thiestic religions. Religions enforce at different levels. Buddhism does not because of that Those buddhists who did not understand Buddhism as it is are very indisciplined. Muslims in the west are known to refrain from Drugs and Alcohol. That is banned in the religion.
Western capitalism disintegrate because of the very reason that it can not change and it creates some very very rich people whose wealth is not useful to the country at all. On the other hand, In China, the the govt is the wealthiest. So, that wealth eventually and slowly goes to the citizens. Because of the “democracy” US system can not be changes. Because, the people who spend for elections are rich and have specific interests in their minds.
June 20th, 2012 at 12:03 pm
Use all the -isms like a tripod for Balance.
Excessive Capitalism can lead to Greed through excessive Profit making. That has to be controlled through an effective tax system and by not allowing private enterprise to ‘bribe’ lawmakers to do their will.
Excessive Socialism can lead to indolence and a lazy, non-productive society, leading to state poverty. That has to be controlled by not giving too many hand outs.
Excessive Communism can lead to fear of authority and a not so productive society. To balance, have authority only through the Law of the land and not through personages in power.
Democratise the Workplace, says some of the leading lights in the field of western economics, i.e. have most of the enterprises run by the workers themselves for maximum productivity, honesty in the workplace and worker satisfaction. After all, workers number are the highest, and not CEOs, Boards of Management & shareholders.
June 20th, 2012 at 7:03 pm
I think everyone should watch Professor Richard Wolff (Professor Emeritus of Economics, University of Massachusetts, USA), who has talked extensively on Capitalism. He is for democratizing the work place. He says we have democracy in the Government but not in our places of work.
Here are a couple of his talks from the Youtube.
http://www.youtube.com/watch?v=tPmrA_QPm50
http://www.youtube.com/watch?v=L-B3YF37XVs
June 21st, 2012 at 11:32 am
Capitalism is a confidence trick, a dazzling edifice built on paper promises, gambling, bets and speculation. Wall Street doesn’t make or produce anything. The Wall Street however attractive it may appear is built on paper. Wall Street only gambles and bets and speculates.
Modern day bank robbers are at Wall Street but they wear grey suits and not masks. Speculators, propagandists and financiers of Wall Street are given some unfair advantage over the average consumers and taxpayers and the cumulative effect of the people watching selfishness prevail over the public interest has been an undermining of the public’s trust in the present US government. There’s no question the Wall Street is rigged against the average consumers and taxpayers. The Wall Street has a lot more information. Wall Street jerry-rig the system so that Wall Street always win. If the Wall Street loses trillions, the US Treasury will bail the Wall Street out so it can go back and do it again.
50 trillion dollars in global wealth was erased between September 2007 and March 2009, including 7 trillion dollars in the US stock market, 6 trillion dollars in the US housing market, 8 trillion dollars in US retirement and household wealth, 2 trillion dollars in US individual retirement accounts, 2 trillion dollars in US traditional defined benefit plans and 3 trillion dollars in US nonpension assets.
There are trillions dollars of new money taken again from Americans to make deals and hand out outrageous bonuses. And when these trillions run out Wall Street will come back for more until the dollar becomes junk. The value of the US dollar declined very significantly during the last 70 years. The value of the US dollar in 1940 was worth 2,000% more than the value of the US dollar now.
The top 6 US banks had assets of less than one fifth of US GDP in 1995. Now they have two third of US GDP. The financial crisis was created by the biggest US banks to consolidate power. The big banks became stronger as a result of the bailout by the US Treasury. The big banks are turning that increased economic clout into more political power.
Oligarchy is the political power based on economic power. And it’s the rise of the Wall Street in economic terms, that it’d turn into political power. And Wall Street then feed that back into more deregulation, more opportunities to go out and take reckless risks and capture trillions of dollars.
Wall Street only has the lobbyists. Since the heads of Wall Street and their representatives are afraid because they don’t have the substance or the arguments, they will not come out and debate with the people who occupy the Wall Street.
The political and economical leadership of the US has chosed to cartel profits and transformed the US economy to serve the colluding and unlawful oligarchy. The US banks are borrowing money at near zero interest from the US government, then lending it back to the US government at even mere fractions higher interest than they are paying. The net interest margin made by the US banks by lending the money back to the US federal government in the first 6 months of 2011 is 210 billion dollars.
Due to the oligarchs’ rapacious looting and their purchase of a politically protected luxurious lifestyle, the people of the US are on the road to permanent serfdom under a police state. The democracy was not given to the people of the US on a platter. It is not theirs for all time, irrespective of their efforts. Either the people of US organize and they find political leadership to take this on, or they are going to be in deep trouble.
“Competition is a sin”
John D. Rockefeller
Several people assume that the Wall Street is equal to capitalism. Real capitalism requires a looser. The establishing your own business needs resources that others already own. It’s a race to own.
But Wall Street thinks differently. For Wall street competition is a sin.
Robust financial markets don’t imperil capitalism. But in 2008 the US government was compelled to replace private risk takers in the financial markets with government capital so that money and credit flows wouldn’t stop, precipitating a depression.
The US government’s actions weren’t the start of government distortions in the financial sector, but the result of 25 years of continous such distortions. In the early 1980′s, modern financial sector began to escape reasonable important regulations of the marketplace. The US government gradually adopted a “too big to fail” policy for the Wall Street firms, saving lenders to failing businesses from losses. As a result, these Wall Street firms became impervious to the vital market discipline that the threat of loss provides.
Adding to the problem, Wall Street created financial instruments that escaped other reasonable limits, including gentle constraints on speculative borrowing and requirements for the disclosure of important facts.
The financial industry eventually posed an untenable risk to the US economy—a risk that culminated in the trillions of dollars’ worth of government bailouts and guarantees that the US government scrambled starting in late 2008.
Even as the US banks and markets seem to heal, lenders to financial markets continue to understand that the US government would protect them in the future if necessary. This implicit guarantee by the US government harms economic growth, because it forces good ones to compete against bad ones.
Capitalism is not intended to benefit the greedy on the backs of employees, consumers and tax payers although that has historically been a dark reality.
Wall Street shouldn’t be a free pass for those expecting entitlements with little or no personal investment although this too has become an ugly development during the past three decades.
Wall Street has undue influence on the US government policies and this situation reflects a failure of democratic representation for the middle and lower classes, or the other 99 percent Americans.
“There is no calamity greater than lavish desires, no greater guilt than discontentment and no greater disaster than greed”
– Laozi
“Greedy desire is endless and therefore can never be satisfied”
– Buddha