have been much debate on the ethics and morality of capitalism and some insistence on changing the rules (Miliband) through more government intervention. This is based on the argument that the system depends on the ethical behaviours of executive ceo’s honesty and integrity, most of which is responsible for the financial crisis of 2007. An example, the unethical conducts of giving mortgages to unqualified borrowers to earn large fees and accounting frauds in the 2000s by large companies such as Enron, Health south and WorldCom. Also moral issues on the fairness in terms of profit making, freedom in terms of individual’s choice between starvation and the acceptance of whatever wage offered and the effects of competition between large companies have been questioned.
These incidents have drawn heavily the disadvantages of the free market system, as companies cannot be trusted to allocate resources on the best interest of society. Milton Friedman asserts capitalism to be based on greed and does not reward virtue. What the system lacks is ethical decision making as Okri (2008) states, “individualism has risen almost to a religion and appearance made more important than substance”.
However, the advantage of the free market system outweighs the disadvantages. Capitalism compared to other economic system produces more wealth and rewards individuals with wealth through hard work (conservapedia, 2012). Also the greatest benefit of capitalism is human choice. Individuals are free to pursue areas of interest, which provides security and creates the opportunity to escape poverty and create wealth for themselves and others (Butters, 2009). Immoral practices will always be present any economy, it act of moral judgement is
Also smith states that “self-interest by moral judgment based on fairness and justice would lead to promoting the best interest of society guided by the