THE ETHICS OF CAPITALISM 1
Over the past few decades, the world’ economies have been driven bythe dynamism of produce, resources, finances and the general globaleconomic crisis. This has not only impacted the developing economies,but also the strongest economies, such as those of China, the U.S andU.K. Some of the negative impacts of the same have been risingunemployment, radical steps to control products, such as laying offworkers, political and economic partnerships and free marketideology, amongst many others. As the situation gets more complex,there have been arguments as to whether the steps that are beingtaken by those controlling the global economies are ethical or not.Notably, the entities controlling the economies, includingindividuals, governments and businesses, are playing by the rules ofcapitalism. This has led to the question as to whether it is thecapitalism ideology to be blamed or not. While answering thisquestion, economists have first to address the issue of the ethics ofcapitalism, which sets ground to judging whether those controllingthe economy through this economic model are doing so unethically.This paper assesses the ethics of capitalism.
Before Karl Marx came up with the Communist Manifesto in 1848,much of the western world’s economic system was aligned towards thethought that property and businesses should be privately owned andcontrolled (Marx, 2012). As such, the profits that were made wereattributed to the wise decisions that the owners of these propertiesand businesses made. However, after the publication of Marx’sideology, which held that such an economic system would lead touneven distribution of wealth and economic power, economists beganwrestling with the implications of capitalism.
Ina capitalist system, the means of production are privatelycontrolled. This implies that individual have economic freedom, giventhat they had exclusive rights to control factories, businesses, andrelated economic organizations. At the same time, they have the totalsay on what should be produced, and how it should be produced.Intrinsically, the principles of this economic system are freecompetition and supply & demand.
Judging by the fundamentals of this economic system, I believe thatits core objective is to generate profit. As such, it can only beexpected that the dynamics of business within a capitalisticenvironment are regulated by profit. As such, the goods and servicesproduced are not exclusively for the satisfaction of the customer,nor are they to serve the interest of the employees. Instead, therole of customers and employees is to influence the trends ofproduction, based on the needs of the producers to make profit. Forinstance, if a carmaker wishes to expand his factory’s revenue, hewill produce a certain number of automobiles, using a specificdesign, and sell them to the market. This would work in his favor, ifhe enjoys monopoly within that market niche. According to Cowling &Tomlinson (2012), one of the elements that promote the flourishing gobusiness in a capitalistic system is a monopolistic market.
Onthe same note, the workforce that is used in capitalistic productionis organized to make profit for the owners. Given there is no othergoal than profit generation, the capitalistic system has beenpreferred in societies where businesses are competing to satisfy theneeds of a select few, who are the owners. As such, there are threemajor premises that define the capitalistic market. These areself-interest, exploitation of the elements of production, andachievement of profitable milestones. Unlike the communist system,where the production is centralized and the profits are shared amongmany entities, the capitalistic system looks to satisfy the coreneeds of a select few. Regardless, Dibbens & Williams (2012)argue that by having this characteristic, the capitalistic systempromotes sanity in the market, and stimulates the control of theeconomy in a simpler manner.
Having established the core objectives of the system, which is profitgeneration issues that are more complex are inherently associatedwith practicing capitalism. The issue of ethics emanates fromdifferent layers of the societies that embrace capitalism. This hasled to the formulation of economic regulations, specifically designedto control profit-generation and elements that are associated withit. At the heart of these regulations are political processes.According to Heater (2013), capitalism is one of the major forcesthat have weakened political systems across the world. This argumentis justifiable, by referring to the political systems of countriesthat embrace capitalism. In countries like the United States,business owners have a great say when it comes to elections. Giventhat America is one of the most decent democracies in the world, thepoliticians are controlled, to a certain extent, by the richest, whoown the means of production. This is itself an ethical issue when itcomes to justifying ethics in capitalism. The free market ideologyhas led to the capitulation of distinct values of the capitalistsocieties, such as education, healthcare, science and even religion.As such, it can be argued that capitalism is responsible for themalfunction of social values.
However,while maintaining this argument, it is necessary to refer tolong-term changes that are initiated by capitalism. This helpsprofessionals in social and economic matters to systematicallyevaluate the system, so to prevent the thwarting of social values.Given the subject of the matter encompasses ethics and economics, allthose who are involved in it are vulnerable to the implications. Assuch, history teaches the economists and sociologists the implicationof the substitutes. For instance, communism has been responsible forsome of the direst disasters in the history if humanity. Communistregimes, most notably Romania under Nicolai Ceausescu and China underMao Zedong, led to the death of millions of people throughstarvation. This is itself a serious ethical issue, which raisesissues of mentality in social order and economic systems. Thisunderlines the famous saying that not everything that is legal isethical, and not everything that is ethical is legal. The questionboils down to the way that the society is run by those who have beenentrusted by the people to take the responsibility.
Fromthe consumers’ perspective, they increase the demand of theproducts, which is in turn influenced by their moral awareness. Forinstance, if the public consumers feel that product A is better thanproduct B, they will influence increased production of the latter.Likewise, the producers will be under pressure to implement policiesthat will mitigate any losses in profit that are attributed to theincreased production of a certain product. This explains the moraltools that characterize human civilization, which are ethicalprinciples that focus on the reciprocal rights that in the long runserve everyone’s interests. This draws greatly from the old sayingthat goes “do unto others what you want them to do to you”. Assuch, while it is characteristic of rivals to point fingers, a web ofinterests that trigger different reactions defines the matter.
Ultimately,the society has to put in mind the well-being of the futuregeneration, regardless of the economic system they are using. Thismeans that it is the ethical responsibility of the society to decideupon an economic system that does not compromise the future. This isdefined in sustainability, which Friedberg (2013) defines as theintegration of economic, social and environmental domains, to satisfythe needs of the present without jeopardizing those of the future.Going by this school of thought, it can be argued that the humanisticimplications of the capitalist system are morally sound, andethically defendable.
At conception, it is no question that capitalism was based on socialand economic morals. However, over time, given the turbulent natureof global economies, there are serious concerns raised over theexistence of morality within the framework of capitalism. This isbecause those controlling production, who are the drivers ofcapitalism, are from time to time accused of going beyond their linesand making life unbearable for the consumer, who make up of thelargest percentage of the society. Regardless, while demonizing theprinciples and application of capitalism, the interests and actionsof both the producers and consumers have to be considered, as well asthe options provided by substitute systems. This leads to theconclusion that the issue of ethics in capitalism is relative, as itdraws upon the implication of the system on the wellbeing of thesociety and sustainability for future generations.
Cowling, K., & Tomlinson, P.(2012). Monopolycapitalism. OxfordUniversity Press.
Dibben, P., & Williams, C. C.(2012). Varieties of capitalism and employment relations: informallydominated market economies. IndustrialRelations: A Journal of Economy and Society, 51(1),563-582.
Freidberg, S. (2013). Calculating sustainability in supply chaincapitalism. Economy and Society, 42(4), 571-596.
Heater, D. (2013). Whatis citizenship. JohnWiley & Sons.
Marx, K. (2012). Economicand philosophic manuscripts of 1844.Courier Corporation.