Saturday, October 1, 2016

Capitalism is Not a Moral System; Corporations Are Not Moral Entities

Enthusiasm for capitalism sometimes edges into moralism. Why?

I was raised on Forbes, Friedman, and Rukeyser- each one a tireless cheerleader for the moral and practical rightness of capitalism. Back in the cold war days, with Reds breathing down our necks, this was understandable, though if the Communists had such a terrible, unworkable system, why be so worried about it? And how did our marquee accomplishment of landing people on the moon with a massive public / bureaucratic / military program justify a capitalist system? There were clearly other agendas going on, which typically did not come up in the discussion.

The basic case goes back to Hayek and the Austrians- a temperamental antipathy to egalitariansm, the French revolutionary spirit, and particularly to government doing anything significant, because that will land us in bondage to the bureaucrat, who is by definition corrupt. The Russian system, then and (ironically) now, exemplifies this bondage- the process by which the government's control of the economy and media fosters an amplification of political power into despotism and the creeping disenfranchisement of everyone else- workers and owners alike.


On the other hand, slavery and capitalism are hardly antithetical. In the US, slaves were the single most valuable form of property in the pre-civil war South, greater even than land. They were sold and bought like so many bales of cotton and listed, separated, and passed down in estates. They were tortured, mutilated, chased down, and terrorized, all in the service of successful business. They were the soul, one might say, of that system of capitalism which was fervently defended by people who cherished freedom above all things, such that in the Civil War one-quarter of all military eligible men in the South died.

So while capitalism may be a practical system, it is not inherently a moral system. Like Darwinian natural selection, it may build wonderful things, but it is a blind, pitiless and quite amoral mechanism for doing so. Both systems harness greed, competition, and destruction to weed out the weak and enrich the rich. And their blindness means that they may take vastly more time, and induce vastly more suffering, than required to get there. Indeed, even if one brings sanguine thoughts and upright morals to the business world, it will grind them down, for Gresham's dynamic makes sure that, to meet the competition, you stoop to their level and their methods. Nice guys finish last.


Capitalism is thus in principle and in practice, amoral, and efforts to associate it with apple pie and the flag are pure (class-ist) propaganda. Confusion certainly arises from the fact that corporations are made up of people, who are themselves good and moral, so the whole must have some moral character, right? Unfortunately, the whole in this case is less than the sum of its parts. If the system itself is amoral, then the morality of its components is of little avail. And the leadership of the system tends to go to the least moral, most psychopathic types of people, since they are best suited(!) to that system.

Critiques from the anti-corporate left include the Occupy movement, Bernie Sanders, and basic empirical observation of what is going on around us, now and in the past. The left makes its business to poke holes in the narrative of friendly, moral community-upholding companies. Which in turn spend zillions of dollars portraying their moral rectitude in white-washing, green-washing happy-people advertisements. We need to take a more mature approach to this whole relationship.

One problem is assuming that companies are or even can be moral and decent corporate citizens. That is a simple category error. It is certainly nice if a company behaves decently, but the reigning corporate philosophy and legal / fiduciary duty is to increase shareholder value, whether that and the means of getting there is moral or not. And to obey the law, or at least not get caught. Or if caught, to corrupt the justice system and the political system to the extent that it doesn't matter. And so forth. Some business models foster better behavior than others, but even in the most customer friendly, repeated-interaction, transparent kind of business, there is room for assymetric information and reward for immorality.


The point is the we should not rely on corporations to be moral beings, at least under current systems of governance. We need our other institutions to be the moral actors in the system. If global warming is screwing up the future of the entire biosphere, the solution is not to moan about how evil fossil fuel companies are, but to legally circumscribe them to serve the public purposes, such as raising carbon taxes, regulating their direct impacts, and raising investment and incentives for clean energy.

The fossil fuel industry is corrupting the very system that has the role of holding it to account- the political system, which is our expression of our moral and other long-term interests. Surely that is evil, but again, addressing it is a matter of organization and politics, not of trying to convince Exxon to change its stripes from the predatory organization and purpose that it embodies.

The fossil fuel industry is additionally corrupting the very media that we rely on for information and organization in the effort to mount moral political changes that would regulate its activities and reshape our energy system. Surely that is evil, but again, no change happens without conflict with the incumbant, conservative (if wildly non-conserving) powers who like things just as they are.

The upshot of all these digressions is that the access that corporations have to our public affairs is a relic of a past where we assumed (or were brainwashed to think) that they were civic entities with a public spirited morality. That is not the case, and we need to act accordingly to separate them rigorously. They have interests, surely. But they are not public interests. They have legal personhood. But no moral personhood, and thus no proper role in our collective moral deliberations, or media in the form of a blanket constitutional right of expression.

But here we are with our popularly elected legislators and executive officials sucking at the corporate teat. As though that were where the money was. All the while, the government prints money in the billions, but can't seem to stage an informative election, or make election days into holidays, or publically fund the central exercise of democracy.


  • Capitalism with a smile- was a political and cultural construct.
  • More mistaken cheerleading for capitalism. Certainty is not, generally, a good criterion.
  • Another recession retrospective. And why is economics so partisan?
  • Stupidity has a large new market, and perhaps the colossal failure of "smart" mainstream economics has something to do with it. Which was, ironically, infected with the same right-wingism that now doubts the "experts". Their own experts! Makes you wonder what their aims were all along.
  • A good side of business- the first cool cell phone.
  • Secrecy is bad policy, on salaries.
  • Trump is a conflict of interest nightmare.
  • And a total fraud.
  • We are not doing enough: gas consumption reaches all time high.
  • Part of a series about the income guarantee.
  • China is headed for a fall.
  • Shadows of MMT are falling on conventional economics.
  • Yet Japan failed to stick with its fiscal policy.
  • Mass migration patterns.
  • Gun nuts keep misfiring.

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