Do you believe that Capitalism is moral? Justify you answer.

Capitalism can be defined ideally as an economic system in which the major portion of production and distribution is in private hands, operating under what is termed a profit or market system. (Shaw et al. 2013, p.118) As compared to other forms of economic systems, capitalism benefits the society in various ways (and based on utilitarian argument, this will be morally preferred because the balance of good over bad is the greatest). Few would deny that capitalism is the most productive and efficient economic system, especially after the collapse of Soviet Communism. But some critics still contend that capitalism is not a moral system. Yet morality is impossible unless one is free to choose between alternatives without outside coercion. Since capitalism is based on freedom of choice, it provides the best environment for morality and character development. In addition, business success not only requires but also rewards virtuous behavior by participants in the market. A social system such as capitalism is a system of relationships and cannot be moral or immoral in the sense that a person can be – only individuals can be moral agents. However, a social system can be moral in its effects if it promotes the possibility and likelihood of moral behavior by individuals who act within it. It follows, then; that there is a moral imperative to create a political and economic system that permits the greatest possibility for self-determination and moral agency. Capitalism is that system. (Younkins, 1998) Capitalism is itself only a means and requires individual participants to decide on the ends to be pursued. No economic system can make people good. The best that an economic system can do is to allow people to be good. But morality and virtue require that individuals be free to be immoral and of bad character. Only when an individual has choice and bears responsibility for his actions can he is moral. Capitalism, more than other economic systems, allows the exercise of individual free will. Thus, though capitalism cannot guarantee a moral society, it is necessary for one. According to Adam Smith (cited in Shaw et al. 2013, p. 121), free competition will prevent blind self interest from turning into a “mob of ruthless profiteers”. Competitive forces restraint a company from charging higher because other companies will compete by lowering prices to attract customers away from the company that charges excessive pricing. Companies pursuing blind self-interests are therefore penalized. The moral justification of capitalism is not that it serves the public. Capitalism does achieve the "public good" (appropriately defined), but this is an effect, not a cause; it is a secondary consequence, not an evaluative primary. The justification of capitalism is that it is the system that implements a scientific code of morality; i.e., which recognizes man's metaphysical nature and needs; i.e., which is based on reason and reality. A secondary consequence of such a system is that any group who lives under it and acts properly has to benefit. (Peikoff.com, 2014)

The criticism of capitalism is all about Greed. Capitalism is not about greed. Greed is fundamentally a matter of the human heart, not of any economic system. I would say there are greedy socialists and communists too. There often be concluded that the rich get richer at the expense of the poor. Krugman (2014) argues that “talented children in low-income American families do not have the same chance to make use of their talent to get the right education, to pursue the right career path as those born higher up the ladder. Extreme inequality means a waste of human resources”. Capitalism is not a zero-sum game. In market economies, wealth is not static, but is constantly being created. Though 3 billion worldwide remain in poverty, capitalism has lifted 4 billion out. Capitalism also said to leads to overconsumption and materialism. Materialism is hardly unique to capitalist cultures. No one is more materialistic than a socialist. Capitalism also makes people unequal. Said another way that it creates winners and losers or some might have a lot, some have a little in contrast. In other words, capitalism leads to inequalities in wealth. Capitalism allows for and even encourages inequality in a society. Capitalism allows some people to get rich but also allows others to become poor. Capitalism allows products to be produced even if they are not in the public good. For example, it allows cars that get very low gas mileage to be produced even though they help cause global warming. “As the rich took larger shares of income and wealth, they gained more command over ideology and hence politics. Reducing the size of government, cutting taxes on the rich and reducing welfare for the poor, deregulating the economy, and failing to regulate newly evolving credit instruments flowed out of this ideology” (Wisman 2012, p.921). Worker-capitalist relationship is also morally undesirable; superiority of the capitalist over the workers John Stuart Mill (cited in Shaw et al. 2013, p. 140) wrote “To work at the bidding and for the profit of another is not a satisfactory state to human beings of educated intelligence, who ceased to think themselves inferior to those whom they serve”. But in another point of view, having a lot is not wrong so that the possession of wealth is not wrong, but the means of accumulating it may be. These objections assume there is something fundamentally wrong with inequality. People have different gifts and abilities. People invest different effort and diligence. God does not hate inequality, but rather injustice and oppression. (Dr. Dave White, 2012) Capitalism allows industries to pollute the environment. In pure capitalism, a government would not be able to prevent companies from, for example, dumping toxic waste in a river. Pure capitalism allows people to lack basic needs such as health care. Unregulated capitalism allows for things like the Great Depression and the financial crisis of last year because it doesn't prevent businesses from acting in destructive ways. The criticisms of capitalism also involved the rational choice to make. A rational choice can only be made when a person obtained a full and details information regarding the company without any hide information within. In contrast, it s hard to get a full understanding about the information because it is said to be costly to understand everything in the information. Besides, it sometimes contain some manipulated advertising that attracted customer with advertising method which lead to a non rational choice of making. As a conclusion, to prevent the bad happened from capitalism, one must act well in situation. Capitalism can be good or in bad depends on the person acting within.

Reference list

1. Dr. Dave White, (2012). 4 Criticisms & 10 Virtues of Capitalism - Dr. Dave White. [online] Available at: http://www.drdavewhite.com/2012/11/26/4-criticisms-10-virtues-of-capitalism/ [Accessed 14 Sep. 2014].

2. Krugman, P 2014, Inequality is a drag, New York Times, 7 August 2014, viewed 13 September 2014, <http://www.nytimes.com/2014/08/08/opinion/paul-krugman-inequality-is-a-drag.html?module=Search&mabReward=relbias%3Aw%2C{%222%22%3A%22RI%3A18%22}&_r=0>

3. Peikoff.com, (2014). What is capitalism? The moral justification of capitalism.. [online] Available at: http://www.peikoff.com/opar/capitalism_moral.htm [Accessed 14 Sep. 2014].

4. Shaw, WH, Barry, V, Issa, T &Catley, B 2013, Moral Issues in Business, 2nd Asia Pacific edn, Cengage Learning Australia, Melbourne, VIC.

5. Wisman, JD 2012, Wage Stagnation, rising inequality and the financial crisis of 2008, Cambridge Journal of Economics, vol. 37, no.4, pp.921-945.

6. Younkins, E. (1998). Capitalism and Morality \_. Impact.