The Morality of Capitalism

 Posted by on 1 March 2008 at 5:18 pm  Activism, Politics
Mar 012008

WSJ’s blog “Deal Journal” posted the following inquiry under the title “Is Capitalism Immoral?” yesterday:

Here’s a question to think about over the weekend: Is capitalism immoral?

Stefan Theil seems to think that is what is being taught to European school kids. In an article in the January/February edition of Foreign Policy magazine, Stefan Theil concluded that Europe, particularly France and Germany, are teaching their children a “philosophy of failure,” based on the idea that capitalism is immoral, savage and unhealthy. Theil – whose day job is European economics editor for Newsweek – cites a 2005 poll in which only 36% of French citizens said they support the free enterprise system; 47% of Germans said in 2007 that they support socialist ideals. Theil mentions that anti-American attitudes may be, in part, anti-capitalist.

Theil, who studied French and German financial textbooks as a fellow for the German Marshall Fund, compiles a couple of quotes from the books that guide Europe’s impressionable young into what he calls a “deep anti-market bias.” One German textbook intones, “The worldwide call for…more deregulation in reality means a grab for the material lifeblood of the modern nation-state,” and a French one teaches, “Globalization implies ‘subjugation of the world to the market,’ which constitutes a true cultural danger.”

Well, now you know why foreign companies have such a hard time buying anything in Germany or France. (And why France’s Suez and Gaz de France were forced to merge with each other rather than accept foreign buyers, and why NYSE-Euronext has a big Paris base, as does Alcatel-Lucent.) But you knew that already.

In contrast, it would seem easy to conclude that “Western-style capitalism” is actually only practiced by the U.S. and Britain. Those two countries are the biggest sellers of their own homegrown assets, according to a report this week from Canada’s Secor Conseil.

But the U.S. is hardly immune to protecting its national borders, particularly when it comes to China, as CNOOC will tell you. Or how about the long to-do about China’s Huawei’s involvement in Bain Capital’s $2.2 billion bid for 3Com. It’s America that’s having trouble with the bid, and America’s not, as far as we can tell, anti-capitalist. (That’s why Ayn Rand lived here). And some of the policies that Thiel considers anti-capitalist, like a “rich-people tax,” are espoused not just by Germany’s Angela Merkel; they’re also supported by American Democrats, including Presidential candidates Hillary Clinton and Barack Obama.

So Deal Journal Readers, what would be the ideal U.S. textbook entry addressing the morality or immorality of our globalized capitalist system?

My apologies for posting the entry in its entirety, but I wanted to include the mention of Ayn Rand, since that included the false claim that the US isn’t anti-capitalist.

Here’s what I posted in the comments:

“What would be the ideal U.S. textbook entry addressing the morality or immorality of our globalized capitalist system?”

I’d recommend Ayn Rand’s essay “What is Capitalism?” from _Capitalism: The Unknown Ideal_. Rand clearly and persuasively argues that capitalism is the only moral political/economic system. Only capitalism respects the inescapable metaphysical fact that a person must reason in order to live. By recognizing individual rights, particularly by banning force and fraud, capitalism protects each person’s capacity to act according to his own rational judgment in pursuit of his values. To varying degrees, every other economic system makes the pursuit of the values required for life impossible. (Today, that’s most dramatically illustrated by the starvation of North Korea under communism.)

However, America is not a capitalist nation: we have a mixed economy in which the government routinely violates individual rights with welfare programs, antitrust laws, environmental regulations, corporate subsidies, drug laws, and more. As much as Ayn Rand loved America, she would not defend the status quo.

The comments so far are mostly horrid: either openly anti-capitalist or pragmatist. So I’d encourage people to post something arguing for the morality of capitalism.

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