How Moral Is Capitalism?

I recently read an article from the February 12th issue of Forbes magazine entitled, "How Moral Is Capitalism?". In this article, the author, Rich Karlgaard was attacked by a blogger calling himself "Adam Smith". "Adam Smith" was accusing him and all businessmen of being money grubbers- too wrapped up in the pursuit of money that they are not interested in some of the natural gifts of life. Thus, they have missed out on the purpose of life. Rich brings up some interesting questions about capitalism with a bi-partisan political system. Consider some of the following:

The first is that capitalism makes the fruits of individual labor available to the masses, and thus makes life better for all invovled. Is this the true purpose of capitalism? Is this the reason why we choose to participate in this economic system?

Second, is capitialism is as moral as it could be? Do some do without while others thrive? Is it moral for the government to regulate the incomes of private citizens and redistribute their "surplus"?

Lastly, Rich quotes the real Adam Smith's definition of self-interest (the reason why capitialism works) from his book "The Wealth of Nations",

"It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to theor own interest."

Rich points out that Smith felt that self-interest is the psychological need to win favor within one's society. He goes on to conclude that self-interest and moral sentiments are the same thing. Therefore, at least, capitalism by definition is moral. Do you agree or disagree with these arguments? Can we count on the need of other's to succeed to be the moral fiber in capitalism? Can we count on the government to level the playing field by means of distribution of income surplus? Can we trust politicians to carry out on their promises to do so once voted into office? If not, how can we ensure that our system is moral? What free-market economic principles teach us the value of morals in capitalism? Does capitalism even need morals?

I personally feel that the author is correct in many of his assumptions, and that we cannot count on the system to be moral, we must count on the people invovled in the system. What do you guys think about some of these questions?

For more topics by Rich Karlgaard.

No comments: