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How Moral Is Capitalism?
Forbes ^ | 12 February 2007 | Rich Karlgaard

Posted on 02/02/2007 5:37:44 PM PST by shrinkermd

A writer calling himself "Adam Smith"--you'll see the irony in a moment--nuked me recently on my Forbes.com daily blog. He wrote: "You are too much of a materialistic person to understand the purpose of life. [You big mouths at magazines] find followers who want nothing but money, which they think buys happiness. It's not too late for you to drop your crap and look for the meaning of life--it is certainly not in making money. I wish you luck."

Sorry, Mr. Smith. I do not consider moneygrubbing the purpose of life. Never have. The use of God's gifts comes closer for me.

Still, moneygrubbing--a.k.a. the search for profit--has its purpose. Money (profit) is a tool. It is capital. Without capital there is no capitalism. Innovation starves. Prosperity weakens. Societies stagnate. God-given gifts wither. This is especially true for humanity's wonderfully zany outliers: artists, inventors, entrepreneurs. They need capitalism more than anyone.

Money is good, therefore, because capitalism is good. It delivers the goods, literally, and better--broadly and individually--than does any other system. Hugo Chávez would argue that point, but he's nuts.

Can we go even further and say that capitalism is good because it is moral? Following that logic, can we say: The purer the form of capitalism, the more moral it is? Is capitalism perfectly moral--enough to sustain itself over many generations?

Yes, say Ayn Rand's followers. But most of us would not go that far. We think a capitalism that lacks outside moral influences and pressures, restraints and safety nets would, sooner or later, fail.

Bill Ziff, a successful magazine capitalist who died last year, spoke for most of us: "[Capitalism] is not in itself sufficient to create values. It depends on what human and religious values we, ourselves, bring to our affairs. Insofar as those values fail, we would all descend toward a lawless, inhumane, cutthroat society that will no longer harbor our civilization."

Good Works or Redistribution?

Conservatives and liberals agree on little these days. But most agree on this: Capitalism works, but it is insufficiently moral. Conservatives--allow me to paint them with a broad brush--believe capitalism works best when it is spun with golden moral threads, when it weaves in those old values learned in church, charities, service clubs and the like.

Liberals are more skeptical. They know capitalism will produce losers as well as winners. They feel the winners must be forced into helping the losers. Forced help hurts everyone, say conservatives. Redistribution discourages winners from producing and losers from trying. It leaves everyone bitter.

Such is the national debate we find ourselves engaged in as the Democrats take power in the Senate and House. The minimum wage is a form of redistribution. It forces employers to pay workers more than their productivity merits, puny as those paychecks may be. Higher payroll taxes are also redistribution. Who believes higher payroll taxes will show up as higher monthly payments for the employee's retirement?

Restrictions on free trade are yet another form of redistribution, although you may not think of them as such. Tariffs imposed by the U.S. are usually countered by tariffs from other countries. That's what trade wars are all about--retaliation. Trade wars force American companies that are winners in the global economy--the IBMs, FedExes and Citigroups--to give up some of their winnings so that struggling domestic tool and textile manufacturers can stay in business. Trade protectionism asks California to subsidize Ohio and South Carolina.

Generally, Democrats favor forced redistribution more than Republicans do. Republicans--again, in general--would prefer to fix capitalism's shortcomings through good works and giving. This forces Republicans to higher standards of conduct, by the way. Bad people, in power, can redistribute as easily as good people. Only good people can inspire us to good works and giving.

Have Republicans succeeded in holding themselves to this higher standard? Hah! The top two Republicans in the House, John Boehner (Ohio) and Roy Blunt (Missouri), can't summon enough moral courage to say no to "earmarks"--a sneaky form of redistribution. Demo-crats are proud of redistribution. They have no need to be sneaky about it. Democrats will always play the redistribution game better.

Paging Adam Smith

What did Adam Smith--not my blogger critic but the real one--say about capitalism and morality?

The great Scotsman seemed to say two contradictory things. In The Wealth of Nations (1776) he wrote these famous words about self-interest: "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages." This sounds like selfishness: Greed is good.

But Smith never believed that. In his earlier book, The Theory of Moral Sentiments (1759), Smith defined self-interest not as selfishness or greed but as a psychological need to win favor within one's society. Smith revised The Theory of Moral Sentiments after he wrote The Wealth of Nations. He did not change his belief that moral sentiments and self-interest are the same thing.

Let's not forget our Adam Smith. When we do, capitalism loses its moral authority, and the redistributionists win.


TOPICS: Business/Economy; Culture/Society; Editorial
KEYWORDS: capitalism; morality
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To: LibKill

There is a strong case to be made for the intrinsic morality of capitalism. Anyone who wants to go into this arena in some depth would be well repaid to go to Acton Institute and access the Journal of Markets and Morality at the link below.



http://www.acton.org/


41 posted on 02/02/2007 6:52:24 PM PST by hinckley buzzard
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To: hinckley buzzard
Thanks, but I see capitalism as a force that exists and enforces itself.

Not unlike gravity.

42 posted on 02/02/2007 6:53:57 PM PST by LibKill (ENOUGH! Take the warning labels off everything and let Saint Darwin do his job.)
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To: LibKill
Capitalism works whether or not you beleive in it.

Like I said:

So long as someone is willing to pay, there will always be someone willing to collect... (Sir Francis Dashwood)

"There's a sucker born every minute." (P.T. Barnum)

Morality is rooted entirely in the presupposition some higher power defines what is correct for human behavior. (Sir Francis Dashwood)

43 posted on 02/02/2007 6:57:17 PM PST by Sir Francis Dashwood (LET'S ROLL!)
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To: Sir Francis Dashwood
Hmm. We seem to have a basic disagreement here.

Are you saying that capitalism is a scam, perpertrated by plutocrats?

44 posted on 02/02/2007 6:58:41 PM PST by LibKill (ENOUGH! Take the warning labels off everything and let Saint Darwin do his job.)
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To: hinckley buzzard

So long as someone is willing to pay, there will always be someone willing to collect... (Sir Francis Dashwood)

"There's a sucker born every minute." (P.T. Barnum)

Morality is rooted entirely in the presupposition some higher power defines what is correct for human behavior. (Sir Francis Dashwood)


45 posted on 02/02/2007 6:59:38 PM PST by Sir Francis Dashwood (LET'S ROLL!)
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To: LibKill

So long as someone is willing to pay, there will always be someone willing to collect...


46 posted on 02/02/2007 7:00:15 PM PST by Sir Francis Dashwood (LET'S ROLL!)
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To: LibKill
Your education plan should be implemented immediately, along with a harsh and true history of stupid peoples who did not follow the principles of freedom.

We are a nation of stupid peoples who have no principles.
Sorry to say.

47 posted on 02/02/2007 7:02:32 PM PST by Ramcat (Thank You American Veterans)
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To: Ramcat
We are a nation of stupid peoples who have no principles. Sorry to say.

Not entirely.

You are not so, nor are most of FreeRepublic.

I only hope it is not too late.

48 posted on 02/02/2007 7:05:26 PM PST by LibKill (ENOUGH! Take the warning labels off everything and let Saint Darwin do his job.)
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To: shrinkermd

Let me see, which has the potential for more evil?? A free people making their own decisions about what to buy, what to eat, how to live, where to live, where to build, what to believe,, A free people making their own decisions whether for good or bad, for themselves,,,, or a few people or even one person making all their decisions for them? The fact this is a serious discussion shows how desensitized we have become to the loss of our liberties, and how accustomed we are to more and more socialism in our lives. If some bleeding heart really wants to help the less unfortunate, than go out and start a business, make a lot of and give it all away. Or start a free school for the poor. Or build free homes for the homeless. Or teach the uneducated how to be successful. Give free seminars on positive thinking. If nothing else, you can always go around and knock on doors asking for contributions for the poor and needy. And don't try to use the Bible to show how unfair Capitalism is to the poor. Exodus 23:3 "Nor shall you be partial to the poor man in his dispute." Also in Exodus 30 "The rich shall not pay more and the poor shall not pay less." Also in Lev the Bible talks about not being partial to the rich nor to the poor. Jesus never told anyone to take from someone and give to another. He told people to give of themselves. Socialism enslaves. It always has and it always will.


49 posted on 02/02/2007 7:06:25 PM PST by freemike
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To: shrinkermd
capitalism will produce losers as well as winners

This is so incredibly short-sighted. I always liked Zig Ziglar's comment, similar to the above: "Failure is an event, not a person". In a capitalistic society, even losers can turn around a losing situation. That's what is lost on nearly everyone, even some "conservative" economists.

And I'm SICK TO DEATH (yep, I'm shouting) about how money isn't everything. Of course money isn't everything. What money IS is a way of achieving what you want out of life.

Imagine if you were always well fed, well clothed, and had a roof over your head, but no disposable income. Your basic needs would be taken care of, but who only has basic needs?

Wouldn't you be much better off, by any measure, if you had the disposable income to travel to France, the liberals' favorite country, to see how our "betters" live? Or to be able to travel more often to see your favorite Aunt Martha, the one who raised you when your mother was dying? Or to express your deep appreciation to your wife with jewelry for the wonderful way she cares for you?

What money allows you to do is take care of the top level of Maslow's hierarchy of needs - self-actualization. To have the freedom to do what you really want to do, what really satisfies you in live. Anyone who would deny me the fruits of my labors, driven by my intense desire to be self-acutalize, is nothing more than a petty dictator who believes they know more what's good for me than I do.

50 posted on 02/02/2007 7:07:20 PM PST by Hardastarboard (DemocraticUnderground.com is an internet hate site.)
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To: Hardastarboard

What this article reminds me about is the fact that the word "Capitalism" was invented by the left to make "Economic Freedom" sound nasty and despicable. Capitalism is a word invented by the enemies of freedom, yet we have all capitulated and use it anyway. Such is the very nature of propagandistic techniques.


51 posted on 02/02/2007 7:18:16 PM PST by LloydofDSS (Christian who believes in freedom.)
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To: shrinkermd
"Liberals are more skeptical. They know capitalism will produce losers as well as winners."

Capitalism doesn't create winners and losers; winners and losers create themselves.

52 posted on 02/02/2007 7:24:48 PM PST by meyer (Bring back the Contract with America and you'll bring back the Republican majority.)
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To: BenLurkin
"But most agree on this: Capitalism works, but it is insufficiently moral."

NONSENSE.

But even if so capitalism is certainly more moral than big government socialism.

Taking from those who produce at the point of a gun to give to the nonproductive is patently immoral

I'll argue that the fact that it works is evidence of it's morality.

Ultimately it tends to foster progress and general well being, where socialism tends to foster apathy, stagnation and decay. I'd say there's some moral metrics involved in that comparison.

53 posted on 02/02/2007 7:25:02 PM PST by tacticalogic ("Oh bother!" said Pooh, as he chambered his last round.)
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To: LibKill
I only hope it is not too late.

Sorry for the gloomy post.
I just returned from a High School Basketball game where the halftime show featured our beautiful young cheerleaders suggestively gyrating and grinding to degrading rap music while the parents were wild with applause.
Nothing to do with cheering or basketball?
And this is a pretty conservative little town.
Sad.

54 posted on 02/02/2007 8:28:51 PM PST by Ramcat (Thank You American Veterans)
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To: shrinkermd

Paraphrasing Winston Churchill's statement: "Capitalism is the worst form of governance except for all the others."


55 posted on 02/02/2007 8:53:51 PM PST by Rembrandt (We would have won Viet Nam w/o Dim interference.)
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To: muir_redwoods

It is coveting. Thy shall not covet is something liberals do not believe in.


56 posted on 02/02/2007 8:55:24 PM PST by therut
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To: shrinkermd
Certainly unrestrained capitalism isn't good.

The market notoriously tends to universalize itself. It does not easily coexist with institutions that operate according to principles antithetical to itself: schools and universities, newspapers and magazines, charities, families. Sooner or later the market tends to absorb them all. It puts an almost irresistible pressure on every activity to justify itself in the only terms it recognizes: to become a business proposition, to pay its own way, to show black ink on the bottom line. It turns news into entertainment, scholarship into professional careerism, social work into scientific management of poverty. Inexorably it remodels every institution in its own image. - Christopher Lasch, "The Revolt Of The Elites"

We are now seeing it begin to absorb nations.
It's a little like that giant planet-eating space turd on Star Trek.

57 posted on 02/02/2007 9:52:23 PM PST by jordan8
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To: shrinkermd

Freedom is generally preferable to coercion.


58 posted on 02/02/2007 10:09:44 PM PST by sphinx
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To: shrinkermd
Smith defined self-interest not as selfishness or greed but as a psychological need to win favor within one's society.

Who gives a flying frack what one's society thinks about them?

The test of morality is moral results. Capitalism has moral results. Capitalism is life and nature itself. It leads to prosperity and life and growth.

Capitalism is unrestrained liscence to engage in non-coercive relations with other individuals. The more pure the better.

Greed isn't just good. It's Grrreat!

59 posted on 02/02/2007 10:43:32 PM PST by mbraynard
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To: Sir Francis Dashwood
Morality is rooted entirely in the presupposition some higher power defines what is correct for human behavior.

No. Morality is rooted in objective reality. Morality is causal and is defined by results.

God gave man three ways to know him. You can blow off the first two if you are a non-believer: scripture from the prophets and from Jesus himself. However, the third way is through nature. And this nature and the consequences of decision of nature dictate what is moral.

60 posted on 02/02/2007 10:47:53 PM PST by mbraynard
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