Morality in Capitalism response
(Dan here….lifted from comments, lightly edited for readability)
by Dale Coberly
I’ll offer my own answer to the question. (of Morality in Capitalism post here)
“Capitalism” offers itself as the answer to morality. always in some version of the Ayn Randian “life is time and time is money so taxes are not only theft, they are murder.”
The truth is there is no conflict between capitalism and morality any more than there is a conflict between capitalism and gravity, or capitalism and the second law of thermodynamics.
Taxes and regulations are a normal and necessary part of life. capital can adjust itself to those costs just as they adjust to gravity and entropy (“dead weight losses”?)
I think we need capitalists. they have a talent that managed sanely tends to make life a little more interesting for us if not always better. where i disagree with “capitalism” is where it insists that capitalists should make the rules. this is about equivalent to a farmer letting his prize bull make the rules.
The people who wrote in the linked article appear to assume there were no laws broken by the banks that led to the 2008 crash.
They are wrong. the banks funded and rewarded the criminals making the bad loans the CDO’s were based on. and it was the criminality of the loans that led ultimately to the big crash
The problem for us is that the criminal loan industry has been with us for decades if not centuries, and very little enforcement has been brought against it.
So “there were no laws against it” merely points at the fact that criminals write the laws, or decide how to enforce them.
I modestly suggest that those who don’t think business should have an ethical responsibility to its customers or the public are themselves immoral in their personal lives, not merely fulfilling their obligation to their shareholders to pursue maximum profit.
The ethics of Friedman et al lead to terrible human suffering in spite of the lie that “maximum profits” leads ultimately to “progress” or, i suppose, the greatest good for the greatest number.
we could do with more philosophers (and economists) who understand the human costs of their logical systems.
and that includes the communists.
“it was the criminality of the loans that led ultimately to the big crash”
No. It was the recognition of the invalidity of those loans that triggered the crash, but it was the packaging of those loans for resale in CDOs and the reckless and massively leveraged purchasing of those CDOs that caused the crash.
It was at least both of those things. The packaging included the fraud of knowing the riskiness of the components and not warning the purchasers. “The Big Short” told the story pretty well.
The average person sees what economists do not. Amorality in daily business life is justified through slogans and rhetoric that mask issues and provide excuses for reprehensible behavior.
That now-quaint notion of care for one’s fellow human beings is brushed aside with specious arguments based on narrow models that claim to show some theoretical truth made manifest. The utter bankruptcy of that approach has been seen routinely in the craven and illegal acts appearing in communities and on front pages. The Golden Rule became The Gold Rule, as in who has the Gold makes the rules. That will not end well.
Corporations are wholly artificial creations of the laws and regulations that define them. There is no reason that we have to define that the sole purpose of a corporation is to make profits for its shareholders. Germany says that the corporations have an equal responsibility to the welfare of its employees and to society in general.
Economics is not fate.
We don’t have to endure bad design.