Przemyslaw Jaroslaw Galusiakowski 1

Can Capitalism be Morally Justified?

On the 15th of October, 2011, in solidarity with the Occupy Wall Street protest, Londoners began their own peaceful demonstration establishing their encampments in central London. This is how the Occupy London protest was born. Thousands of people became united and have been demonstrating their dissatisfaction with the current socioeconomic system as well as the demand for immediate changes. The statement issued by them mentions inequality, social injustice, corporate greed and the influence of private companies on the government as unacceptable (BBC, 2012), undermining the basic assumption which has underpinned capitalism. One can, however, pose a crucial question - is capitalism really all about exploitation and inequality, or can its foundations be morally justified? I believe so, as in my opinion it is based upon morals and cannot function without them. Its basic characteristic is freedom, which is stricly moral as people do what they choose to do (Narveson, 2003), and which is not allowed in any other known system. The Occupy London protests can be justified as the problems they point out actually exist and noone can deny it, however, I do not think it is a matter of an immoral system per se, but of people and organisations abusing it. In my essay, I will try to justify my opinion on this matter. Let me start with a short definition of the nature of capitalism. According to Jan Narveson, professor of philosophy at the University of Waterloo, capitalism can be defined by two different ideas. First of all, we can describe it by the notion of the free enterprise; that is, the economic system in which individuals and voluntarily acting groups such as corporations are able to own and direct the use of productive resources, and to engage in free exchange with others, on mutually agreeable terms (Narveson, 2003, para. 4). Secondly, speaking in narrower terms, it can be referred to as a simple situation when the majority of society's productive resources is controlled by a very small group of individuals or institutions (Narveson, 2003). While Occupy London protesters prefer to stick to the latter definition, I believe that the former is truly what capitalism is all about, while the narrower definition refers to the system into which the original idea of the system has evolved. William Shaw, former Chair of the Philosophy Department at San Jose State University, provides us, in turn, with the key features of the system, all of them positive in my opinion, such as companies, profit motive, competition and private property (Shaw, 2011).

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There is a lot of criticism about capitalism as a system. One of the main points the critics and the protesters make is that it deepens economic inequality. I must agree that the disparity of income in the capitalist economies is terrifying. Economic inequality exists and is a weak point of the capitalist system because capitalism is not flawless, and no system is. However, no system is so beneficial for the poorest classes as capitalism is. None of them provides talented individuals with so many opportunities to climb up the social ladder as capitalism does. In fact, the systems who appraise equality as their major attribute fail in this field even more. Centrally planned economies like the Soviet Union not only failed in trying to reduce inequality, but also damaged the economy in terms of effectiveness and productivity. Moreover, as opposed to its predecessors such as feudal societies and hereditary monarchies, capitalism rewards skills and abilities, not only the blood relation to a wealthy family (Brooks & Wehner, 2011). Another issue brought up by the Occupy London movement is corporate greed and the concentration of economic power in the hands of a minority. The protesters made their point, and it turns out to be completely true in the modern market economies. The problem is serious, and it was noticed as early as the nineteenth century by Karl Marx, philosopher and political economist, who stated that capitalism helps breeding oligopolies, which result in very low competition in the market and the elimination of small firms (Marx, 1848). It is an upsetting phenomenon as it violates one of the key characteristics of capitalism - free competition. Shaw in "Business Ethics" provides us with alarming statistics, such as "the annual revenue of General Motors is greater than the GDP of more than 148 countries and that of Walmart outweighs the combined GDP of all of Sub-saharan Africa" (Shaw, 2011, pp. 145). Moreover, the present capitalist political system supports corporations and the rich. Money is donated in the form of pay offs in exchange for favourable legislation, tax loopholes and other subsidies (Shaw, 2011). The protesters try to fight that and I think it is the right thing to do. Nonetheless, capitalism as a system cannot be entirely blamed for that. The original system expects and encourages individuals and corporations to compete as they provide society with better products and services (Shaw, 2011). The last, but by no means the least problem the Occupy London protesters, along with the big critics of capitalism, including Karl Marx, are trying to raise is that of exploitation and corruption. As Marx argued, the bourgeoisie exploits the proletariat by paying them less than the actual value of their labour is worth (Marx, 1848). Other critics suggest that the wealthy treat lower classes as poorly as

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possible depriving them of everything they can as long as it is legally allowed (Shaw, 2011). I partially agree with this view, capitalism can lead to corruption and exploitation because, as I stated, it has some flaws. Particularly in the last decade, one can highlight many different scandals linked to the capitalists' greed and the exploitation of people and their wealth, for example, scandals involving the former NASDAQ Stock Exchange chairman, Bernard Madoff and his frauds based on a Ponzi scheme, or the illegal inflation of profit made by Enron's officials. Nonetheless, the system is not to blame, but people because where there are humans, as Brooks and Wehner (2011) argue, corruption and exploitation of the weaker can be found, regardless of the economic system they live in. It is thus, the case of some inherent flaws of human beings, so "the answer is not less capitalism. It is better capitalists" (Brooks & Wehner, 2010, pp. 35). The Communist Party of Great Britain (Marxist-Leninist), a radical socialist party known for the extremism of its preached views and collaboration with communist governments, including North Korea and China, issued a statement entitled "Lessons of the Occupy Wall Street Movement". This directly encourages the working classes to revolt against capitalism which, according to the party, has turned out to be a failure (CPGB-ML, 2011). One can, however, elaborate a lot on the flaws of the communist system, but I doubt if one can do so on its benefits. Communism is not an alternative to capitalism as it cannot be morally justified by its core value which is equality. First of all, speaking in terms of income inequality, there is no one proper way to redistribute income among the population. It cannot be redistributed equally to everyone, regardless of their efforts and skills, as it is unequal itself (Brooks & Wehner, 2011). Secondly, as George Orwell wrote in "Animal Farm", "some animals are more equal than others" (Orwell, 1945) - there is always a group of people who govern the rest, otherwise anarchy would reign. Communism, as a matter of fact, did a great damage to society, for example in the Soviet Union, and corruption was far greater than that which we experience in capitalism and those who did the best were simply devoid of any moral scruples (Brooks & Wehner, 2011). Capitalism, however blamed for the entire evil of the world, is still inherently moral, and simply condemns such behaviours. How is it that capitalism is linked to morality? Its primary objective is to recognise human needs and nature and to satisfy them by offering a wide variety of means to do so. It preaches that all individuals should be in charge of their lives. The main value of capitalism is "public good" and every person, who tries to implement its rules in their life, has the right to be rewarded and their freedom ought to be defended (Peikoff, 1991). This freedom is connected to everything related to capitalism - we have

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no imposed requirement to invest or to work, and whether we will be rich or poor, it is more or less up to the individual. Furthermore, capitalism involves cooperation between individuals and organisations. All the units within the system have to collaborate with each other in order to achieve what they pursue. Cooperation, in turn, results in trust and the ability to rely on others, which are very important for one's functioning in society. The system requires ethical behaviour from us and from others - we are obliged to pay our debts, otherwise there are sanctions (legal and social). Finally, capitalism encourages the creation of many significant virtues such as hard work, perseverance and creativity, which can make our lives internally richer (Narveson, 2003). Thus can capitalism be morally justified? Yes, I believe so, however, "no economic system can be expected to teach us morality" (Brooks & Wehner, 2011, pp. 35) as it is simply beyond its main objectives. The economic system serves our needs and should provide us with the possibility to increase our living standards. Capitalism, except for some of its black marks, successfully does this duty. It provides an unprecedented number of people with opportunities to improve their existence, while no other system has managed to do that. Nonetheless, it still has to be based on the obligation of the individuals and corporations to live up to the ethical standards the system sets as without it no socioeconomic system can function properly and both the society and the system itself become degenerated (Brooks & Wehner, 2011). The Occupy London protesters have the right to be dissatisfied as capitalism provides them with this freedom, and I believe that a constructive critique can only lead to improvements.

REFERENCES:

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1. BBC (2012, Jan 18). What next for Occupy London protesters? BBC. Retrieved from: http://www.bbc.co.uk/news/uk-england-london-16623378 [Accessed 26/02/2012] 2. Brooks, A.; Wehner, P. (2011). Wealth & Justice. The morality of democratic capitalism (pp. 2755). Washington, D.C.: American Enterprise Institute 3. Communist Party of Great Britain (Marxist-Leninist) (2011, October 31). Lessons of the Occupy Wall Street Movement. Retrieved from: http://www.cpgb-ml.org/index.php? secName=statements&subName=display&statementId=46 [Accessed 28/02/2012] 4. Marx, K. (1969). Communist Manifesto. Marx/Engels selected works (vol. 1, pp. 98-137) (Trans. S. Moore). Moscow: Progress Publishers. (Original work published 1848) 5. Narveson, J. (2003). On the moral justification of capitalism. ISIL. Retrieved from: http://www.isil.org/resources/fnn/2003summer/jan-narveson.html 6. Peikoff, L. (1991). The moral justification of capitalism. Objectivism: the philosophy of Ayn Rand. Retrieved from: http://peikoff.com/opar/capitalism_moral.htm [Accessed 26/02/2012] 7. Shaw, W. (2011). Business Ethics, Seventh Edition (pp. 130-150). Boston, MA: Wadsworth