However, prosperity enables individuals to cultivate their talents, abilities, and virtues. Thus, capitalism, the best system for wealth creation, permits individuals to spend less time on physica1 concerns, leaving them more time to engage in higher pursuits.
Voluntary Exchange Encourages Moral Behavior At the same time, the achievement of prosperity tends to reward moral behavior. They must respect the natural rights of other individuals, which includes honoring contracts, not engaging in fraud, not using coercion against others, and honoring representations made to the local community.
Moreover, businessmen should not support government economic interventions, such as price supports, tariffs, and subsidies, even though doing so might result in higher profits. To do so would involve the use of coercion, one step removed. Living up to these virtues will aid businessmen in the pursuit of profit. The free market rewards polite, cooperative, tolerant, open, honest, realistic, trustworthy, discerning, creative, fair businessmen. Lying to and cheating other businesses, misleading consumers, and mistreating workers all have serious adverse consequences.
In the long run, profitable businesses tend to be operated in accordance with the basic ethical principles most people hold dear. Socialists do not typically oppose capitalism because they believe it is an economic failure but because they feel that on some level it is immoral.
The fact that capitalism champions the profit motive and depends on and rewards self — interest is seen as selfish. We should ask, then, what the moral status of the profit motive is.
What does it take to profit in a free economy? One profits by gaining something for oneself through trade. Under capitalism, no government bureaucrat commands and controls your economic choices. A person gets what he wants only by offering something of value to others in exchange for labor, service, savings, or a valuable idea or product. It requires a person to accept responsibility for her own life—to engage in thought, effort, independence, and productivity to create and contribute something useful.
Moreover, the hallmark of capitalism is justice: each of us is paid only what we have earned according to the uncoerced judgment of those who trade with us. Apple makes even more, averaging a 60 percent profit margin on its products. The majority of production costs go to materials, like screens and chips. Only a fraction goes to workers. This year The New York Times has also released some articles talking about the labor practices of China and the production of Apple products.
Terrible working conditions exist in the countries that do still have massive manufacturing industries, which make all of our products.
If capitalism worked as it was supposed to, these laborers would be making much more money. The problem is, capitalism is working as it is supposed to: create as much wealth as humanly possible, and Apple is certainly doing that. Capitalism and its prioritizing of wealth accumulation has a profound psychological effect on people. But that which mediates my life for me, also mediates the existence of other people for me.
For me it is the other person. How much does a minimum wage worker deserve to make? Their worth is dependent on how valuable their job is, not the virtue of the person. I know this from 5 consistent years of minimum wage work. The question begs to be asked then, what is the goal of a society? To create an environment where human needs are met, people can live with freedom, sufficient opportunity to become a well-rounded individual, to provide an environment where there is an established quality of life, and to pursue their interests.
I argue that capitalism does not create this kind of society, neither in the United States nor around the world. Please check your inbox and click on the link in the confirmation email to complete your newsletter subscription. It is no accident that Milanovic shares the 18th-century opinion of Bernard Mandeville, contested by Adam Smith , that success depends on individuals behaving as greedily and egotistically as possible.
In this way, however, Milanovic fully accepts the postulates of the old paradigm, pushed to their extreme by neoliberalism, as well as its pretence toward neutrality and the division between ethics and economy. The neutrality of this paradigm has been contested, though, by the Nobel prizewinner Amartya Sen. From his debut as a scholar, Sen has criticised the hypostatisation of the economic agent as an isolated individual, exclusively self-interested, obsessively seeking the greatest possible gains and perfectly rational on the practical plane.
Perhaps, then, something very profound makes the difference here: if the emphatically ethico-political character of the present upheaval calls the dimension of value into question, this gives the denunciation of social and political problems a strong moral meaning while providing morality with a higher critical content. We cannot remain on the surface of the current turmoil, considering justice and equality mere questions of compensation and redistribution.
Rather, we must recover the deep structures that articulate our systems of production and our productive roles—our duties, our powers and our social prestige. The goal of full and high-quality employment then comes to the fore—a goal which today eludes even centre-left governments.
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