Morality and Capitalism
by Richard Girard
"The abstract concept 'society' means to the individual human being the sum total of his direct and indirect relations to his contemporaries and to all the people of earlier generations. The individual is able to think, feel, strive, and work by himself; but he depends so much upon society--in his physical, intellectual, and emotional existence--that it is impossible to think of him, or to understand him, outside the framework of society. It is 'society' which provides man with food, clothing, a home, the tools of work, language, the forms of thought, and most of the content of thought; his life is made possible through the labor and the accomplishments of the many millions past and present who are all hidden behind the small word 'society.'"
Albert Einstein, "Why Socialism?", Monthly Review, New York, May, 1949.
"Self-interest, or rather self-love, or egoism, has been more plausibly substituted as the basis of morality. But I consider our relations with others as constituting the boundaries of morality. With ourselves, we stand on the ground of identity, not of relation, which last, requiring two subjects, excludes self-love confined to a single one. To ourselves, in strict language, we can owe no duties, obligation requiring also two parties. Self-love, therefore, is no part of morality. Indeed, it is exactly its counterpart." --Thomas Jefferson in a letter to Thomas Law, 1814.
"No society can surely be flourishing and happy, of which the greater part of its members are poor and miserable. It is but equity besides, that they who feed, cloath and lodge the whole body of the people, should have such a share of the produce of their own labor as to be themselves tolerably well fed, cloathed and lodged." Adam Smith, The Wealth of Nations, Book I, chapter 8.
The American economic system has gone from being the envy of the world thirty years ago, to being viewed by the world as a train wreck looking for a place to happen. For sixty years the American dollar has been the world's currency of choice. Now, thanks to the greed of American based multinational corporations--and the economic irresponsibility of three Republican administrations, who in the words of Vice President Dick Cheney said "Reagan proved that deficits don't matter;" the dollar's value is now two steps above that of toilet paper.
I say Republican, because when Jimmy Carter left office in 1981, the national debt stood at $914 billion dollars ($914,000,000,000.00, Bureau of Labor Statistics). When Ronald Reagan left in 1989, the national debt stood at almost two and three-quarters trillion dollars. George H.W. Bush left the national debt at over three and one-half trillion dollars. Bill Clinton balanced the budget in his second term, and achieved consecutive years of a budget surplus for the first time since the Eisenhower Administration (1956-7). What George W. Bush has done with the budget will again nearly double our national debt to some ten trillion dollars.
Our economic decline can be tied to our lack of critical thought about the moral basis of our economic system. In our society's exaltation of greed and selfishness, we have forgotten that Adam Smith was above all a "moral philosopher," and would have been disgusted by those who think what he wrote of in The Wealth of Nations is amoral.
One of these areas where critical thought is lacking is the Horatio Alger myth. Most of us will never be millionaires, no matter how hard we work, scrimp and save. (I am using the term "millionaire" as short-hand for the top 1% of the population who currently hold 40% of our nation's wealth, double--according to the Census Bureau--what the top 1% held in the late Seventies.)
Critical thinking about morality and capitalism is also lacking on the accumulation and retention of wealth. The concentration of the wealth of a nation, reduces the opportunity to become a millionaire yourself. People whose reason for being is acquisition of wealth for its own sake (who I will refer to in this piece as plutocrats) will jealously protect their own wealth, while trying to limit other's ability to become wealthy. Plutocrats will actively work to hinder anyone who, through ingenuity and hard work, threaten the plutocrat's ability to maximize their own wealth. The retention of wealth across generations further limits upward mobility, and plays into the Founding Fathers worst fears of establishing an aristocracy.
A third area where critical thinking about capitalism and morality fails is the concept of the "self-made man." This idea is an unrealistic, debilitating myth. As Dr. Einstein points out above, every person stands on the shoulders of those who preceded them, and in many cases on the shoulders of contemporaries: secretaries, clerks, attorneys, laborers, co-workers, mentors, bankers, bosses, etc..
Unlike Dr. Einstein, I am not a socialist. I agree with James Madison's observation in The Federalist Papers No. 47, that if men were angels, any form of government would work. Karl Marx's solutions to the many intrinsic ills of capitalism are dependent on working men and women (the proletariat) consistently being far more enlightened and altruistic than anyone can realistically expect.
I also strongly disagree with the belief of that school of philosophers, including Augustine of Hippo and Thomas Hobbes, who assume that human nature is inherently evil. Human nature constitutes a daunting paradox: alternately kind and cruel, generous and penurious, courageous and full of fear, caring and apathetic, wise and foolish. To quote Thomas Jefferson, in a letter to C.W.F. Dumas in 1788, "I have such reliance on the good sense of the body of the people and the honesty of their leaders that I am not afraid of their letting things go wrong to any length in any cause."
If Marx was overly dependent on the angelic behavior of the proletariat, laissez-faire capitalism is overly contingent on market forces and Adam Smith's metaphorical "invisible hand" to maintain competition and prevent abuses of the system. This unholy trinity of laissez-faire capitalism, market forces, and Smith's invisible hand, is a dogmatic faith that far too many Americans accept unconditionally.
Yet, I have never come across a single historical example where this trinity has, at a national level: 1) created and maintained a large, vibrant middle class; 2) established ongoing, widespread economic competition; 3) generated a continuous, society wide growth of a nation's wealth; 4) and insured a virtuous government responsive and responsible to all of its citizens; for more than two or three generations. Men are not angels: therefore all societal systems (economic, social, etc.) require a working system of checks and balances, not just the government.
A system of economic checks and balances must involve the limiting of corporations and their influence on government at every level. Thomas Jefferson and James Madison wished to propose a constitutional amendment that would have limited corporations and their ability to pursue political or consolidate economic power. This included making it illegal for corporations to own other corporations, to give money to politicians, to otherwise try to influence elections. Corporations would be chartered by the states primarily to serve the public good. Corporations would possess a legal status not as natural persons, but instead as artificial persons, having only the legal attributes which the state saw fit to grant to them in their charter. (Dr. Michael P. Byron, "Jefferson was Right," from his 2002 campaign for California's 49th CD, www.byronforcongress.org/pages/Jefferson%20Was%20Right.htm, reprinted on the Liberal Slant website). Jefferson went to his grave believing Congress' failure to pass this Amendment was a danger to the nation he loved and helped found.