It’s a familiar tale, the unpopular class mate. You know the one. The weirdly dressed individual with spectacles, acne and a funny high pitched voice that sounds something like the classic comedy character Steve Urkell.
Though Steve Urkell was oddly popular in his day, Capitalism in the current cultural and political climate isn’t so lucky.
It seems fortuitous then that our esteemed colleagues at Menzies House would release a free download entitled ‘The Morality of Capitalism’. I was initially intrigued by the title because it immediately evokes the thought of Socratic debate about the ‘morality of capitalism’ at the beginning of the Industrial age, as compared to the postindustrial age that we are currently in.
The booklet itself is broken into several excellent essays. The first is an interview with a Entrepreneur. Entrepreneur’s have always fascinated me because the wildest possible ideas are always the ones they consider first. Indeed I’ve had conversations via email with one of Australia’s richest Entrepreneur’s and have to admit they do think differently. They think about creating value, about maximising potential rather than stifling it! Think of the great brands of modern capitalism. Ford, Kellogg, Nike, McDonald’s and Disney. All of them had in common the capacity to envision a greater future.
Ironically the systems of capital these icons represent are of an ilk that is currently under attack. The essay on Palmer’s interview with co-creator of the Whole Foods Company is instructive because he connects his approach to what he calls “conscious capitalism”, a clear distinction between pure “free-market capitalism” and “crony capitalism”.
This is interesting because the current global #Iamthe99percent protests around corporate greed and its apparent negative impacts on society are confusing this distinction.
Take climate change for instance. The science question wouldn’t be such a big issue if the solutions being touted were applied fully to the forces of pure market capitalism. If there was no taxpayer assistance for these programs and market forces were allowed to work in the creation and destruction of products and services, one would think that history’s final judgement on the solutions would be assured one way or the other. What irritates me is the fact that the political culture is abusing the term “market mechanism” in an attempt to mask the interventionist approach that is invading not just the climate issue but all other areas of policy.
Ironically this is emboldening a government inspired “crony capitalism” that protesters are trying to break apart. The Mackey interview is important because it draws out this intellectual distinction and in a manner that clarifies and restates the moral issues.
The next Essay “Liberty and Dignity Explain the Modern World” by Deirdre N. McCloskey grabs the reigns of history and steers the reader through the ideas and transformations that have led us to our current position. She states tellingly that:
The revolutions and reformations of Europe, 1517 to 1789, gave voice to ordinary people outside the bishops and aristocrats. Europeans and then others came to admire entrepreneurs like Ben Franklin and Andrew Carnegie and Bill Gates. The middle class started to be viewed as good, and started to be allowed to do good, and to do well. People signed on to a Middle-Class Deal that has characterised now-wealthy places such as Britain or Sweden or Hong Kong ever since: “Let me innovate and make piles and piles of money in the short run out of innovation, and in the long run I’ll make you rich.”
The ultimate prize of this essay is the fact that the author posits the thoughts of historian Joel Mokyr who states that: economic change in all periods depends, more than most economists think, on what people believe.
This essay hence is an excellent exposition of competing political, social and economic ideologies.
The next essay, Competition and Cooperation by David Boaz is an excellent piece on the cut-throat world of competition, discussing the tensions and instabilities inherent in same. The tension between Individualism, Community and Civil Society are widely canvassed and address the idea of a life based on the Locke and Hume conceptions of rights that connect to Hume’s exposition of:
(1) our self-interestedness, (2) our necessarily limited generosity toward others, and (3) the scarcity of resources available to fulfil our needs.
This essay had a certain appeal for me because it inspires thought about the anti-capitalist push that often occurs when the community tires of change, longing instead for a protectionism that sets itself against the drive of cooperation and adaptation in the marketplace.
Further Tom G. Palmer’s essay moves to an excellent narrative analysis of “For-Profit Medicine and the Compassion Motive”. He addresses this by comparing his personal experience with a for profit and non-profit health provider. The ultimate end of the exercise reveals that profit oriented health services provide personalised service that the non-profit provider does not. The comparison’s of incentives in this regard is compelling because it addresses the key issues of health, government intervention and the positives and negatives of same.
I found this to be a great analysis because everyone has probably had similar experiences where efficiency is lacking in government operated health services. Palmer highlights the importance of capitalist incentive to drive down prices and provide better more customer focused services.
The concluding essays on “The Paradox of Morality”, “The Moral Logic of Equality and Inequality”, and “Adam Smith and the Myth of Greed” all touch on the importance of institutional and individualist processes. These are processes which incidentally drive the forces of capitalism and the countervailing forces of coercion.
Communism is addressed at length in this context and provides a window into that world-view. In reading this excellent booklet, I had abstract philosophy and practical applications in mind. Palmer’s views on the ‘Myth of Greed’ are compelling because they re-iterate a belief in:
The rule of law, property, contract, and exchange
This runs counter to the idealism of coercion that is prevalent in current political, social and economic debate. If you’re reading this and don’t believe me, download the booklet [here] and check it out for yourself.
Timothy W Humphries is a graduate journalism student and writes from Brisbane, Queensland Australia.
Australian Libertarian Society (old site) 
“The revolutions and reformations of Europe, 1517 to 1789, gave voice to ordinary people”
It’s a sure sign that if someone says this, they either don’t know what they are talking about or are being deliberately misleading. Revolutions do not give a voice to ordinary people, they tend in fact to draft them into the army,
What about the Ron Paul Revolution? Isn’t he aiming at achieving a free market oriented revolution?
Whilst I don’t object to ‘Capitalism’ as a term, I think that ‘Free Enterprize’ is a better description of our society. ‘Free-Enterprizism’ is a clumsy term, I will concede.
My own neologism is ‘Pro-ownerism’, the belief that we should be able to own and rule our assets as we choose.
Fair point, I stand corrected, Dr Paul is one of the good guys.
“The morality of capitalism” and the power of philosophy as the prime mover (“economic change in all periods depends, more than most economists think, on what people believe”) – Objectivism has been banging on about this stuff for years!
Thanks for the article links – I’m sure I won’t like what I read, but I will be very interested to read the articles.
In Objectivism, moral theory is induced from observations of human life. Humans are the ultimate standard of morality, not God, government, Gaia, or an abstract notion of collective society at large.
The moral card needs to be brought out and debated! Socialists and fascists are winning on this issue by miles. People really believe big government is moral and big business is evil. This is a fundamental problem – more fundamental than economic theory.
For example, the new mining tax. Gillard and Wong are getting away unchallenged when they say that mining profits rightly belong to everyone – a BS notion of collective resource ownership. They don’t care that someone had to discover how to use the resources, where to find them, how to mine them, how to transport them, etc etc. These egalitarian, socialist, political beliefs come from their ethical ideas – they believe individuals should be sacrificed to the masses. They don’t understand that individual freedom is essential to human life itself because their own ethical beliefs ignore the individual human being.
Humans survive and prosper primarily through the use of their conceptual faculties as opposed to pure instinct – we are pathetically weak physically for our size compared to other animals eg/ a chimp is about 5 X stronger than a human even though it’s a lighter weight. Even in ancient, primitive human existence, humans survived based on their intellect eg/ working out that circling vultures indicate a freshly killed carcass, working out ways to store water in animal stomachs, clay dishes or ostrich eggs etc, working out how to make clothes, how to preserve foods through cooking etc. This requirement for scientific-like thought for survival itself logically implies a need to act on these thoughts. Therefore in politics we should protect all people’s ability to act and pursue their life (unless these actions are forcibly stopping others from their own actions). This can also be seen as the basis for the need of property rights.
This article notes that historically there was more debate about the morality of capitalism. I believe this can be explained as follows: In past cultures there was a generally higher standard of public interest in ideas themselves. eg/ 100 years ago, I think the political debates seen in newspapers were of a higher intellectual standard and were more focused on fundamental ideas than the pathetic excuse for thinking witnessed by today’s many idiot politicians and “intellectuals”. These days society is highly pragmatist, i.e. people don’t believe principles can have broad integrative power (even though people still necessarily act on principles, usually defaulting to the common epistemological/ethical beliefs of their culture by following their emotions which themselves arise from their implicitly held philosophical ideas). It seems the only absolute to pragmatists is that there are no absolutes – a contradiction of course.
These is another powerful reason people don’t want to talk about morality these days. It’s because altruistic moral theories dominate even though they are logically impossible and destructive. When people talk morality, they aren’t trying to help others live a more prosperous life (like in Objectivism) they are condemning others to hell or trying to manipulate others and make them feel guilty with impossible moral standards. People implicitly know the dominant ethical theories of today are destructive to their own life and they therefore shy away from these issues. I’m the same, when I hear someone drop the moral card, eg/ “oh you’re just being selfish”, I immediate view them with suspicion. Fact is we are all necessarily selfish or we’d die very quickly (I ate breakfast this morning and put clothes on for example). I am able to defend myself against these altruist-inspired manipulators because I have questioned the dominant ethical beliefs of the culture. But most people can’t or won’t do this. So while they shy away from thinking about morality – they are still humans beings and are still guided by principles. They must blindly accept the dominant ethical theories of our culture.
History shows that the moral argument works. Ethics is very low down and fundamental – one’s values are at least implicitly considered in most decision making and especially political decision making. Ethics will drive politics before economics. If people believe socialism/fascism is right and self-interest is evil, they’ll vote for big government even if they know is far from optimal economically. They are conflicted but ultimately they will accept some sacrifice to their own life – they are conditioned to believe this is moral. (NB/ Sacrifice is not equal to investment, sacrifice is an intended overall loss of value, not delayed gratification or prioritization).
There is no dichotomy between the individual and society at large. I.e. The political system that’s best for me individually is best for society at large (in reality a collection of individuals). But people have been conditioned to see a conflict between themselves and others or God, Gaia, collective society, etc. This is a sick and twisted view of the world. Altruistic people can easily fall into the trap of thinking that because in their mind’s a conflict exists, either they are screwing others (immoral but practical) or they’re getting screwed (moral but impractical). Actually, both these approaches are ultimately immoral and impractical. In reality people operate by trading for mutual benefit – the normal mode of human conduct.
Oh, no! Who let the objectivist in? Own up now, please! Or I’ll start making jokes!
Q. Why did the chicken cross the busy highway?
A. To prove to her friends that she wasn’t a chicken!
They don’t get any better….
Tim – rightly or wrongly, the States do own the minerals. The colonial Governments got greedy and declared ownership vested in the Crown extended past silver and gold. If only we had become a republic in 1856!
Perhaps my next article should be about “Guilt and Religion” Good contributions one and all!