The Moral Case for Capitalism

With both econs and non-econs bashing economics and capitalism, here is some fightback from James R. Otteson. He is joint professor of philosophy and economics at Yeshiva University in New York. (Wow! Did not know such depts exist anymore..)

However, one realises both sides are saying the same story. The against camp says capitalism has just become crony capitalism. It has become unfair over the years where gains are not made by the skilled but increasingly by those who have the connections, family wealth etc.

The for camp says how capitalism is a much better system from the available options. So even if the system has declined, it remains the best choice. There is no chance of going back to socialism etc. Hence the first camp points what is wrong and needs to be fixed. Second points to the virtues and still remains the only choice.

Otteson says:

A widespread consensus is that capitalism might be necessary to deliver the goods but fails to meet moral muster. By contrast, socialism, while perhaps not practical, is morally superior—if only we could live up to its ideals. Two main charges are typically marshaled against capitalism: it generates inequality by allowing some to become wealthier than others; and it threatens social solidarity by allowing individuals some priority over their communities. Other objections include: it encourages selfishness or greed; it “atomizes” individuals or “alienates” (Marx’s term) people from one another; it exploits natural resources or despoils nature; it impoverishes third-world countries; and it dehumanizes people because the continual search for profit reduces everything, including human beings, to odious dollar-and-cent calculations.

The list of charges against capitalism is long. But some of the charges are not as strong as might be supposed. Take community. Capitalism gives us incentives to trade and associate with people outside our local community, even complete strangers, not on the basis of our love or care for them but out of our own—and their—self-interest. So capitalism enables people to escape the strictures of their local communities. But is that bad? Capitalism creates opportunities for people to trade, exchange, partner, associate, collaborate, cooperate, and share with—as well as learn from—people not only from next door but from around the world—even people who speak different languages, wear different clothing, eat different foods, and worship different gods. The social characteristics that in other times and under different institutions would lead to conflict—even violent, bloody conflict—become, under capitalism, irrelevant—and thus no longer cause for discord. Capitalism encourages people to see those outside their communities not as threats but as opportunities. It gives us an incentive to look beyond our narrow parochialisms and form associations that would otherwise not be possible.

Capitalism is not perfect:

Capitalism is not perfect. But no system created by human beings is, or ever will be, perfect. The most we can hope for is continuing gradual improvement. To this end, we must honestly examine the prospects of the available systems of political economy. The benefits of the free-enterprise society are enormous and unprecedented; they have meant the difference between life and death for hundreds of millions of people and have afforded a dignity to populations that are otherwise forgotten. We should wish to extend these benefits rather than to curtail them.

It would be all too easy for us, among the wealthiest people who have ever lived, in one of the richest places on earth, to disdain the institutions that have enabled us to escape the strictures of poverty and disrespect that have plagued humanity for the vast majority of its existence. Our crime today, however, would lie not in our inequalities but rather in our refusal to uphold the institutions that give humanity the only hope it has ever known of rising out of its natural state of destitution. The great and precious blessings of freedom and prosperity that we Americans have enjoyed, and that some, but not enough, others around the world have also experienced, deserve nothing less.

Interesting read.


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