Book Review: The Morality of Capitalism

Updated: Feb 12

"Free market capitalism is creativity in service to humanity."

JT Bogden - Many people do not think about capitalism's real contribution and value. Although, most hear more from capitalism's opponents who are quick to point to perceived flaws and problems in order to espouse their competitive system. The sound bytes echo over the airwaves as news media drive the spin home; corruption, greed, and deals that are out-of-this-world. In this post, the morality of capitalism is explored. Originally, this post was scripted for inclusion into a book being written by me several years ago. The Morality of Capitalism is not a single person's view but instead a set of essays from economists, marketers, political scientists, etc... from whom a broad perspective is offered.

The Morality of Capitalism

Morality is a dialectic conversation within the mind of an individual as they search out the distinctiveness between right or wrong, good or evil, and redeeming or demeaning. Morality results in an internal character condition within the individual that reflects in their decision-making. An individual's moral condition is impressed upon a system, institution, or process by management or the seat the individual may hold. Moreover, a system, process, or institution may reflect a moral posture by design as well as by management. For example, institutional theft, taxes, is the confiscation or restriction of wealth instituted by those invested in political power, not invested in the production of wealth, and is considered to be the worse kind of theft. Institutional theft often operates behind the mask of process obfuscation. Thus, when organizing a new process, system, or institution care must be taken to ensure there is redeeming value. Leaders must engage in dialectic conversation and examine the dialectic posture and any paradoxes carefully.

There is a moral paradox between selfishness and selflessness. When people are selfish disputes arise over exchanges deemed unfair and resentment towards those who become rich. Similar disputes arise when both parties are selfless. In a hypothetical example, the buyer may not make a purchase if the price is too low for fear of taking advantage of the seller. However, the seller may not raise prices out of fear he may be gouging the buyer. The problem is a conflict of interest in either scenario and not a dilemma of rich vs poor cast often as a privilege; the haves and have nots. The solution to the problem is equal rights for everyone. In this way, everyone has the opportunity to pursue wealth (Yushi, 2011). Success is another issue.

Regarding success, in free markets, some people become more wealthy than others and some lose their shirts. Markets do not generate equal outcomes nor do they require equal capitalization. Thus, a seeming paradox is set up between inequality and equality. Equality is necessary in order to trade, innovate, choose and reap rewards earned but the expectation of results generated is a risk. People possess equal rights to participate in the free market but equal results would be an economic absurdity even though that is upheld as a moral value by those who support socialism. The scandal inequality thought is the gap between the wealth of people in economically free societies and the wealth in unfree societies. Freeing people economically will create enormous wealth and close the gap. Moreover, it would do so as a positive consequence of justice by eliminating the unequal treatment of people in countries misruled by cronyism, statism, militarism, socialism, communism, corruption, and brute force. Economic freedom means an equal standard of justice, equal respect for the rights of all to innovate, produce, and trade (Nokonov, 2011). Capitalism is not just an alternative to these other systems. Free-market capitalism is the natural economy when all human contrived systems and controls are removed.

There needs to be a distinction between the forms of capitalism that are often equivocated as one by social intellectuals. ' Crony ' capitalism is a system found in many nations and governments. In many nations, the aristocracy came about their wealth by birth or by alignment with the state and not through the means of production of wealth. Thus, these people, friends, relatives, and/or supporters inherently wield political power and are the ' Cronies '. Being in such a privileged position they take it on themselves to reward some companies and harm others often using taxpayer money in the process for activities like bailouts, stimulus, pork-barrel spending, and other activities. This is a corrupt system and should not be confused with Free-market capitalism that refers to a system of production and exchange that has these qualities:

  • Based on the Rule of Law and guiding discipline of profits and losses

  • Equality of Rights for all

  • Freedom to choose

  • Freedom to trade

  • Freedom to innovate

  • The Right to enjoy the fruits of one's labor, savings, and investments

  • Freedom from Institutional Theft; confiscation or restriction of wealth by those invested in political power rather than the production of wealth.

Free-market capitalism is often resented by the elite due to an inherent loss of status, power, and control. Free-market capitalism gives levity to the middle class and produces advances to humankind that do not have the magnitude of impact under other systems.

Looking Deeper Into Free-Market Capitalism

So far, as we examined capitalism we considered the ' essence ' of Capitalism as a system that promotes equality, freedom, and opportunity. We also considered the ' being ' of capitalism as a market where production and exchange occur. Now we are going to look deeper at the ' virtue ' of capitalis