What Is the Role of Morality in a Capitalist Economy?
by Peter Turchin
What Is the Role of Morality in a Capitalist Economy? published at Evonomics is worth a visit…it is academic but can offer material for discussion, involving several economists. I am not going to try to summarize.
Your link is broken.
Here is your corrected link:
oh, Jim H
i may not have time to visit the link you don’t have time to summarize.
so i’ll offer my own answer to the question.
“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.
The great law is “do no harm”. 5000 years since the Yama Yoga.
It is translated in to the golden rule in the west.
When Jesus said give onto Caesar and to God he may have been offering the dichotomy of legitimate and just. It is always better to be just!
Governance defines legitimate for capitalism legitimate does not mean just!
However, enough injustice and even St Paul stopped being a good Roman and lost his head. What Marx was saying about the conflict of the proletariat.
Morality in capitalism should do no harm…….
I have an opinion.
1. Laws allow us to live together peacefully. (We hope.) Stealing your neighbors goods is against the law. But human nature being what it is, there will always be the temptation to wander too close to what is illegal. Insider trading comes to mind. It is illegal because it destroys trust in the markets. Why would a billionaire trade on inside information?
2. Morality is a higher standard which encourages trust between us and thus a more peaceful society. Merely coveting your neighbors goods is a sin. Coveting a company which has been providing dividends and wages is a sin, when all you would do is leverage it to the hilt and sell it. (Knowing full well that ultimately that company will not survive your game.) As time has gone by, fewer of us accept the importance of morality. And as time has gone by, more and more laws have been written in an attempt to maintain trust and peace in our society.
3. Courtesy serves as a signal to others that we are not self centered louts. But it may be only a signal.
When only the law is important to you then you can not be trusted. Every thing you do has to be dissected, examined, and questioned. The problem for society is that you move among moral people who do not wish to believe that you are a greedy self centered lout.
i could agree with all that. but i’d throw in a couple of caveats:
immoral people make at least some of the laws.
profoundly evil people can convince themselves they are really doing good. and some of them can convince ordinary decent people to do things that are evil while thinking they are doing good.
this doesn’t mean there is no hope.
there seem to have been at least a few people in history who had some insight into doing good… and why we ought to try it. and probably many more people who try to do good whose names you never heard of.
i think that trying to do good is what is called “faith” until that word came to mean “believing what you don’t believe.”
I am reading a book called “Adults in the Room” about the Greek debt crisis. the author discusses, perhaps, “good economics” vs bad economics, but i don’t know enough about… not so much “economics” as “what happens when people make decisions about money.” i don’t think the author is talking about “good” in general, but he seems to assume somethings about good that perhaps we can all recognize… whether our particular ideas about economics can achieve that good is another question.