The Moral Foundation of Capitalism

As most of you who read this know, I am an Objectivist to my very atomic core. The Objectivist Standard, the publication put out by The Ayn Rand Center for Individual Rights, has an annual essay contest for persons between 18 and 35 years of age. For 2010 the theme is The Moral Foundation of Capitalism. Never before, in the history of our nation, has a theme ever been more timely.

When I received the email from TOS outlining the essay and giving me links to see the rules, etc. (I strongly urge any of my readers who would like to write about this to visit the many links in my blog) I was immediately saddened that I could not enter the contest. This is something that I have given much thought to over the past 30 years as I struggled with being a Christian and an Objectivist. It is only in the last 10 years that I have found a happy medium where I finally see that they are not mutually exclusive. Thus, I feel I have a better than average understanding of morality and capitalism.

First off, let me share the most important thing I ever learned about government. You cannot legislate morality. Let me repeat that, you cannot legislate morality. Also, let me stress this point, there are no grey areas. There are no morally ambiguous places in which to hide from that which is right and that which is wrong. If you have right and wrong, white and black, then you know that you need black and white to make grey. So, from that we extrapolate that for a grey area to exist, there is a right and there is a wrong. If you know right from wrong, then you have to agree there are no grey areas. There are only grey areas if you wish to hide from that which is right. Remember, justification is when you lie to others about the things you do. Rationalization is when you lie to yourself about the things you do. Both are where we seek to hide from ourselves and others.

In our Judeo-Christian society we accept the Ten Commandments, the Great Imperative (The Golden Rule). We realize that if we treat others as well as we treat ourselves, with the respect we give ourselves, then we will never break any of the Ten Commandments. The same goes in business. If you do not deal with your customers, employees and vendors in good faith you will not succeed. Period. The same goes in governing. If you do not deal in good faith with the governed, and break the sacred contract with them, then you will fail and people willing to honor that contract will be put in to power. So, from these examples we can see that dealing openly and honestly with others is a good, moral idea.

Now, I have heard, my entire life, that capitalist are selfish, greedy, morally vacant pigs who want to rape our women and enslave our children. It is perhaps fortunate that I first heard this spouted from the mouths of hippies and thus knew it to be wrong. Hippies are the living embodiment of the idea of wanting to eat your cake and have it, too. Children are taught that sacrifice is moral and good, that sacrifice will make you a better person, build your character. We are taught that only through sacrificing are we moral. Capitalism is the greatest of all moral codes, then, in that it gives more to the people, which, we are told, is what is moral. The greatest good to the most people.

Merriam-Webster defines capitalism as an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.
In other words, a free market society in which the market defines the value of an object.

That same dictionary defines greed as a selfish and excessive desire for more of something (as money) than is needed.

In other words, a desire to get something for nothing or to get something for no effort. Either way, it's a disgusting and repulsive desire.

I have found most capitalists to be anti-greed. They see it as ruinous and dangerous to a free market society. And, they are right. Greed connotes backroom deals, bribery and outright theft. Does this sound at all familiar? Based on that alone I would tend to think that greed is almost as anti-capitalism as is Socialism. Something for nothing. Free Lunch. Anyway you put perfume on that pig, it still stinks to high heaven.

A good capitalist must deal with everyone in good faith. Faith is not a word that many are comfortable with any more. This is not a religious essay, so when I say faith, I do not mean angels singing and a bright bolt of light from the heavens. I mean faith in the sense that your word is your bond, and others recognize that, know that you will do what you say you will do and deal with you honestly. Honesty begets honesty among honest men. And this is where the morality comes in to capitalism. You must deal honestly with your employees, your customers, your vendors and everyone or every dealing you have with anyone is tainted with your broken word. No one will ever, truly trust you again to deal with them honestly, and they will begin to deal dishonestly with you. Honest employees, customers and vendors will quietly go away and you will be left with nothing but greed.

In the novel Atlas Shrugged, John Galt, the hero of the novel, states that any philosophy that tells you to sacrifice your happiness for the happiness of another is obscene. I don't think that Ayn Rand stated that strongly enough. It's beyond obscene, it's vomitous. It is possibly the most immoral “lesson” ever taught to children. Let me illustrate this.

In a typical capitalist business the employee works for remuneration from the employer, usually in money and certain benefits as provided by the employer, all in the hopes of attracting and keeping people of ability. This system of employment has worked for millennia. Why? Because honest men recognize that when they do their jobs well and correctly the chances for them to move up the ladder are greater than if they sit back, slough off work and laze about. However, the lazy louts will then unionize so that they can sit about doing nothing and still get paid for it. They pay their dues and the unions faithfully get more money, more benefits and more concessions from the capitalist pigs for doing less and less work.

Unions are now irrelevant. Why? Because we have federal regulation that legislates the morality of doing business honestly. Was it the honest capitalist who caused unions to come in to being? No, it was the immoral greedy pig who wanted his workers to work without being paid, slaves, who caused unions to proliferate. He did NOT deal in good faith with his employees. However, the honest capitalist was also forced to accept unions for a faith he did not break. He was punished for being honest. He didn't create the conditions in which the unholy brew of unions was fermented, but he was the one who had to pay the price for it. If we look again at the definition of moral, of or relating to principles of right and wrong in behavior : ethical, we see that it is NOT moral or even ethical to ask a person who has done nothing wrong to accept the punishment for someone who has done everything wrong and still expects to profit from the dishonesty. Unions do nothing but take, while demanding that the real producer, the company they work for, continue to sacrifice more and more while getting less and less from their employees. That is not moral.

In this manner it is easy to illustrate the morality of capitalism. The true capitalist is not the caricature of the fat man in a fine suit burning money to light his cigars. The true capitalist is the man willing to put in an honest days work for a decent amount of pay. He does not seek to get paid for what he hasn't done, but will accept that pay for work he has performed. A true capitalist is not expecting more than he deserves. He expects to work. He expects to receive pay for that work. He expects to be remunerated for a good or service in proportion with the effort put into the creation of that good or service. He does not expect something for nothing.

Capitalism provides reasonably priced goods and services provided by fairly paid workers, who are then able to purchase goods and services from other capitalists. How is that immoral? I would imagine that the progressive liberal mind would say that it cannot be moral because you are not taking something from an able person at the point of a gun to give it to an undeserving slacker. To them it is immoral to ask for remuneration for your good or service and that you should provide it free of charge to anyone who demands it from you. And yet they want the rich producers to stay rich to provide them with money, taken by the point of a gun, for them to give to unproductive, lazy looters who have done nothing to deserve it. Nothing about that sounds moral or even right to a rational mind.

In business there are certain things which we are forced to accept. Several things that we all know to be immoral, yet no one cries out against it. In construction you can expect to deal with bribes, union muggings, and mafia pay offs. We all know it happens and it's all just put down to the cost of doing business. We all know what happens to the moral man who refuses to pay up. He no longer gets jobs, despite his honesty. We soon see that honesty does not pay.

From the day we start speaking we are told to tell the truth, not to lie. From the day we are born we see lying, we see the acceptance of lies, stealing and outright thievery. We are told one thing, and shown another. So, when we get to an age where we begin our practice of capitalism, i.e. getting a job, we are shown that we are not supposed to be so honest be it clocking in for someone who didn't show up, to stealing office supplies or money from a till. We are exposed to the euphemism and the half-truth and white lie.

And we wonder why almost everyone accepts that capitalism is a lie?

It is not the capitalist dealing in bad faith with his employees, it is the employee stealing from the capitalist, getting away with it and after a time, it becomes acceptable to lie and steal from “The Man”. It is not the capitalist not being moral, it is the employee, the greedy pig, wanting something for nothing and being immoral. So, to make themselves feel better they project their own sins upon their employer so that they can sleep at night knowing what they do of themselves.

True capitalism is being honest and dealing honestly with others. Because you know that you have to if you are going to make a living. An honest living. Capitalism is possibly the most moral of all economic foundations. Take the recent troubles with Toyota Motors in Japan. They did not truly deal with the sudden acceleration problems they had with their vehicles. Suddenly no one wants to purchase a Toyota vehicle. When it is further shown that they showed a callus disregard for the problems brought to them by their customers, people stopped buying Toyotas. They tried to lie about the problem to their customers. Their customers took their money elsewhere. If they had taken the problem seriously, instead of thinking that trying to bury it would save them money, they should have thought about the effect that lying would have on their profit sheet and what would happen when their dishonesty came to light, as it usually does. That is greed, something for nothing, expecting more than is needed. That is not moral. That is not capitalism.

We hear about the companies who are giving their employees more than they deserve, we hear about the wonderful nap chairs, break spaces, etc., that companies are giving their employees. We never hear about the company that was able to continue to give out Christmas bonuses to their employees to show their appreciation for their hard work. We never hear about the companies who were able to hire another person because of the hard work their employees put in that made the customers happy and thus made it possible to put another person to work. That is moral. That is capitalism.

What is moral about opening a child care center for your employees? Sick children cannot attend child care and your employee is still going to miss work because their kid is sick. You're just making sure they show up on time and give yourself an excuse to keep them overtime to do a project you were supposed to do because the company provided child care stays open an hour past business hours. It's good public relations, however it's not moral or capitalistic.

What is moral about providing nap chairs for your employees? You pay your employees to sleep during work hours because they were too busy drinking the night before to get the sleep they needed to stay awake when they were supposed to be working? That is greed, not capitalism.

Morality is giving an employee a pay raise because they have done a good job and you know that giving them more money and responsibility is a good deal in capitalism because you will get more from them and they get more from you. It's an honest trade of ability for money. That is moral, that is capitalism.

Morality is charging a fair price for a good or service. Morality is not having to increase your mark-up because you have to pay a kick-back to your supplier to get the widget you need to make the doohickey you sell to your customers. Kick-backs, pay backs, payola, bribes, these are greed.

Morality is paying a fair wage for the work you are asking an employee to do. Sweat shops are the closest thing to slavery we accept in this country. They are neither moral nor legal. Yet these are held up by intellectuals as “capitalist entities”. They are not capitalism. They are greed. Greed is the polar opposite of capitalism.

Morality is not expecting something for nothing or a free lunch. Morality is paying a fair price for something. Thus sits the moral man.