Is capitalism ethical

In our genes are is encoded from the beginning of evolution the idea of survival of the fittest. When humans were becoming modern between 200,000 years and 50,000 years ago in Africa, only the strong survived. This is found and imprinted in our DNA . However, people have extend this idea of Darwinism to the economic arena of competition in the market place. They have accused capitalism as being predatory.

The question is, is this an accurate portrait of capitalism and the way we really interact in a modern human setting? Is capitalism is a moral and valid option for an enlightened society? Is a free market a good market?

capitalism and ethics
As we have evolved, in our genes is not only encoded the survival of the individual but also the survival of humanity. Therefore, when individuals are given economic liberty, they generally gravitate to a greater good. Even if the greater good results from unintentional consequences of self-interest actions.

Our basic genetic equipment also includes the capacity of putting oneself in the situation and thoughts of others. It is in this and similar aptitudes of social behavior and the very great capacity of our species rests – Alfred Gierer Director of Max Planck Institute.

Humans evolved based on a survival of the fittest code, but not only. Further, as we continue to develop, this code  becomes less important. What is important and genetic research confirms this is, creativity, communication and cooperation.

If the human race is to survive, reptilian predatory genes need to yield to creative, communicative and cooperative genes in our species. Nature knows this even if humans do not. As resources grow scare and populations increases nature is pruning our DNA by allowing the creative and cooperative to proliferate and further differentiate our genetic material over simply the aggressive and strong.

Therefore, my thesis that positive human economic behavior in a free society is generally deeply ingrained in our being human.  I believe humans are innately good. Free economics create unintentionally positive outcomes.

When given freedom in economics, like in a capitalist model, generally people will bring good to their lives and those around them and society as a whole will be better off.

Evidence why capitalism is ethical

The same can be said about capitalism and economics. Think of your workplace today.

  • Most of your day-to-day work life activities are a series of boring but important cooperation and communications with your coworkers.
  • New clients are won often on strategic partnerships, contacts and business relationships.
  • Creative ideas like thinking of the next big thing (Facebook and Netflix) or a cure to lower back pain will yield greater profits than squeezing out another 1% of market share from your competition. Innovation and entrepreneurship is rewarded in capitalism.
  • Economics is not zero sum game. Generally markets are organically growing and new markets arise. Think of the search engine market and the number of new users coming online abroad everyday.  Economic trading is a Win-Win a mutual benefit of two parties operating on arm’s length transactions, is what trade is about.
  • Philanthropy – An economic love of humanity – From Bill Gates to Warren Buffet to the Rockefeller foundation philanthropy is a positive outcome of capitalism. Sergey Brin’s ethos of ‘do not harm’ + ‘do good’.  Read about the morality of capitalism from a co-founder of Wholefoods. If this type of example continues I hope the world will be a better place.

So we can conclude that man is a social animal and to survived as a social animal positive cooperation is a part of competition. We are not simple reptiles, even if we wanted to me. I know countless wealthy honest normal business people, establishing small firms. Economic criminals who hit the headlines we take note of but are not the rule. They could not be or economic relationships would not exist.

Keep economic liberty but punish people who take advantage of the trust of others

We can not through the baby out with the bath waters because we have rule breakers or people that exist several standard deviations from the norm in terms of greed and selfishness.

People who violate the codes of ethical human behavior in the market place are punished. Maybe not all, but many.

A human ethic combine with liberty is playing a greater role in changing the way people do business. You can have a free market, with individuals accepting the responsibility of this freedom. People who play by the rules and creative and innovate are rewarded. In this way can enlighten self-interest work.

  • Trust is the real global currency that markets are based on, and creativity and cooperation is what modern capitalism is about.
  • This is a global economic ethics manifesto

The capitalism that I am talking about is enlightened self-interest of Adam Smith, not extreme selfishness and greed, but an ethically oriented economics that is played out in the economic field. It is of course easier to think in terms of absolutes like extreme capitalism or a straight jacket on personal liberty at the expense of ‘equality’, but for a healthy functioning body of human economic behavior works better if it enlightened capitalism. This will be better for individuals and society. Adam Smith was about enlighten self-interest, not selfishness and greed.

What about the idea that a wave of greed brought on the economic crisis

The economic crisis was caused by the central bank lowing interest rated down to 1% so we could all go shopping again after 9/11. I think the movie Wall Street 2 pretty well outlined this explanation of the financial crisis of 2008.

It was caused by the expansion of public and private credit, driven by central bank policy. It was like some farmer opening the grain storage bins and when the animals rush over and bloat themselves, blaming it on animal greed.

Animals will eat until their own personal demise if they are given free access to unnatural refined stores of grains. This is what the central bank does and why we should have free market money and less government not more. This is why capitalism has a bad name, distortions in natural grazing so to speak.

It was not caused by a wave of irrational greed that grip the country, but central bank policy that opened Pandora’s box.

Politicians played up on jealousy and fear to create social and class division.

 Criticisms of capitalism are mostly unjust

Although I am an unrepentant capitalist, I take these criticism of a free market seriously and do not believe in absolutes and extremes.

  1. Not every person operating in a free capitalist society is enlightened and operating on enlightened self interest.
  2. Further, there is great injustice in the world, particularly in economically and some created by capitalism.
  3.  Lastly, even Adam Smith explained that there needs to be opportunities for people, to have a critical level of education, a good upbringing and guidance to be able to function efficiently in a free market.

However, most of these things can be solved with an understanding of  ‘public goods’ and a free market management of these things. Milton Friedman outlined a number of these solutions in his works. However, I admit not all.

Marxism rose out of  abuses of human capital, but also jealousy and resentment. Similarly, politicians in the US play with people’s emotions and turn them against the idea that people can handle their own economic liberty. I belive they can. I believe in the goodness of human nature and the human race that we are evolving to a greater level, a level of freedom

Ethical investing and consuming – what you can do?

Do you want to have a more just economic order? Instead of focusing on just on political change, first examine your own patterns of consumption and investing. For example, I will not invest in any company that even slightly feels to me unethical. No military contractors or tobacco companies or companies that pollute, take advantage of labor or part of the industrial military complex. I also do not consciously buy products from these companies. You do not have to be a peace and love Greenpeace person, but a factor in my consumption and investment patters is ethics.

My personal experience with ethics in the workplace

I have meet many times more people like jolly Mr. Fezziwig, than Ebenezer Scrooges in my professional life.

I like to think that I have generally treated people fair in the workplace. Both as an employe, a manager and employee.  I enjoyed treating people with kindness and always had a smile and good cheer in the workplace and this was a win-win for productivity but also for people’s lives.

In conclusion, my argument is that capitalism is ethical and a positive thing for humanity as I believe that humans are innately good. Given liberty they will generally do the right thing. In fact, this innate goodness is further being encoded in our genes by a nature that wants us to survive, that is the human race, just not the individual. That is why capitalism can work, but only if tempered by ethics and compassion, both on an individual and global level. Fortunately, most people have this capacity for empathy and ethics, don’t you?

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9 responses to “Is capitalism ethical”

  1. Charles Thompson

    Rush Limbaugh said that, more people have been fed by greed than charity. I think he trying to justify capitalism. Wealthy greedy people would never feed the hungry without a personal motive. If they can write it off their taxes,or receive public recognition they may give. To give from a heart of compassion is the right motive. Therefore, If the greedy cannot give without something in return,they will not give. Mitt Romney cancelled all of his credit cards, and left his campaign workers stranded without gas money to get home. This man has 250 million dollars. Do you think he would feed the hungry ? On TV Mitt Romney asked people to write a check to storm victims. I noticed that, he didn’t write a check. I wonder what he’s doing these days. Is he still outsourcing jobs ?

    1. Mark Biernat

      You are ranting – Romney gave like 30% of his income in charity.
      Do you think Romney caused outsourcing? The US economy is down because of The US Federal Reserve created a bubble and after the bubble nothing is happening because the US can not compete now that Asia and other areas are wired into the global economy.
      Adam Smith argued for ‘enlightened self interest’ – what is wrong with that? By each of us using this society as a whole is better off.
      The anti-capitalists believe in government control, that is the worst as it is the greed of the bureaucrats instead of the people.

      1. Greg

        There is something interesting evolving in this argument. It seems that there is no sense of control via either capitalism or anti capitalist. Years ago I heard a talk show host say that he’ll give to charity once he made his millions. As cynical as this seemed, there appears to be a lot of truth in this. Which argues if capitalism solves poverty, then why would charity or government be necessary?
        When its big, there appears to be no defining line between big government money or big private money.

        1. Mark Biernat

          I think main idea here is big government or big business is bad. It is because the people and workers become marginal. Power corrupts. Small is beautiful and efficient. I have worked in big companies and small companies and small are dynamic and a world wind of ideas, while big is a place to relax and collect a paycheck. Sure you have to move and shake in a big company but not with ideas but more busy tasks. Generally a big company or government is where workers go to retire and collect. Small organizations are where workers are important.

          Basically a number of people I meet that are career government people, and I meet a lot as I am in tourist town, are milk toast. They have no creativity or motivation. This is in contrast to the dynamic entrepreneurs or workers I meet in small ventures.

          Now I am not saying these milk toast government workers are unethical and the job creating entrepreneurs are, I am just saying, most of the government workers I have met are not the sharper tools in the shed. I am talking mostly the Washington D.C. workers. I am not joking either, I should keep a log of these people, they seem detached from the reality of me or you.

          So when people start talking ethics you have to consider the whole picture and the effect it has on society and people’s lives.

          Capitalism challenges people to be the best they can be, using their potential to their fullest ability, while a socialist model is more people hanging out and collecting from other people’s hard work.

          Do not get me wrong, I believe in helping the poor and I lived in Europe and social programs are fine. But as a whole capitalism makes the middle class and poor better off living fuller lives than state controlled economics. North Korea Vs South Korea is the classic example.

          Is capitalism perfect, not really because people abuse the freedom, but is it better than government tyranny and state controlled economics, yes.
          Ethics morals and ideas of economics are hard because you want to be compassionate towards the have nots yet to give the people with less more, you need the greedy or at least aggressive selfish guys out there to create the wealth (not really).
          Yet I suggest capitalist are not really selfish but act on enlightened self interest. I see myself as a capitalist but am not some aggressive greedy guy, just someone using their given brain to do work for myself, family and others.

          So capitalism is ethical if people understand it is not greed but enlightened self interest that is the fuel of the economy.

          1. Greg

            Interesting, yet is it a duck? Tell me more that is fueling so much dissension? Is it capitalism? Or is it something uglier and more fanatical. Are we putting too much faith in man’s creativity ? And if its God given talent, why are we wasting these gifts benefit so a few can call themselves enlightened?
            We can pretend a lot of things here but lets not call it capitalism when in fact its practically state sponsored. And that might be called fascism. OR communism? A system that might be bailing out people could be called Socialism ? But that my friend sounds too much like modern Europe. We however have preferential treatment to big business. All the so called creators. The job creators continue show the middle class an unemployment rate of 8%. While interest rates are at phenomenal lows, banks are taking the cheap money and turning it over to financial schemes like derivatives. Loans for people for cars, and houses are not happening. Middle class money is being eroded due to deflated wages which is the impetus for economic growth.
            So ethics have to be questioned only because the truth is being coated as cereal is coated with sugar to lure children to eating breakfast. Let stop fooling the people with half cooked fairy tales and call a duck a duck when it is actually duck.

          2. Mark Biernat

            Oh I am the first to say that corporate welfare has run amok in America. The Banks, the huge military special interest, I mean the defense industry here in the USA is a machine, the Federal reserve pumping easy money into the economy and the rich are getting richer and the middle class is fading away. Yet the root of this is the government not capitalism. The government lobbies the government special interest and the Federal reserve and central banking. It is the lack of free markets that are causing the middle class to suffer. The middle class is being used. Only capitalism and free markets can correct this.
            In government controlled economies the poor are the average and the elite are the government workers or friends of people with power. This is communism, this is a government economy.
            In a free market we should be a nation of shopkeepers and workshops. And this is a good thing.

          3. Greg

            Very well summed up. I’m not sure if this is leading to a train wreck or just more unenlightened boring people leading the way to nowhere.

          4. Mark Biernat

            The good news is, I think economics in the aggregate does not matter as much as individual economics, that is how can I put money in my pocket in an ethical way and contribute to others by creating a good and service they will need.

            Therefore, that being said, even if there is a train wreck then there will be opportunities. I mean even if a company goes bankrupt there will be a need for someone to sell the liquidation and do the accounting.

            Even if everything is all destroyed through greed and immorality there will be always some decent people who need goods and service. Some one will want to eat organic tomatoes and someone has to provide it to them for example. That is where you and I can come in to make a buck. That is why I prefer capitalism as it is not about anything but enlightened self interest and the idea that people are generally good.

            The whole economy can go down but there is still plenty of room to make money.

  2. jani C

    Ethics in management is necessary, and strong enforcement by government. This is what will cause only the strong to survive. Here’s a case that should never be allowed, and they got away with it because its somewhere else:

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