It seems that as Generation Y starts to come of age, the idea of a moral economic system needs to be reevaluated. The question that must be answered is, what is a moral economic system? Could capitalism be on a moral high ground?
To answer that question, I must explain what capitalism is, then why it works. Capitalism is an economic system based on free ideas and free movement. It is a vehicle for free people to do business with whomever they would like, how they like, and without interference from anyone else. Capitalism does not force any product on anyone, nor does it threaten you if you do not adhere to societal norms. It is an economy based entirely on freedom of choice. You are the master under capitalism, you can right the ship or steer it into a reef, the course is yours to chart.
This is the moral high ground to the capitalist way. The fact that you are in control of your own destiny, the individual upheld into his rightful position, commander of himself. Most importantly, it also takes human nature and allows it to become something that is used and not controlled. Anyone can acquire wealth or give it all away.
Now what about the problem of greed some of you will murmur about?
“What is greed?” Milton Friedman postulated that greed is people acting in their own self-interest. If you watch the video (and I hope that you do) a question will be posed, what system eliminates greed? Capitalism does not even try. Instead it partners with government to form courts and then fuels the human nature to do what it does best, seek self-preservation. The individual and the family can be raised from one economic class to another purely because of self-interest. Even the child of the rich man who starts off with more is a beneficiary to the fact that human nature wants what is best for its offspring. In accepting the depravity of man, and creating a system that uses our drives as an advantage instead of fighting against them, is a proof of a practical system. What is the end goal of this system?
In the end, one can achieve to become wealthy and die as a miser, or he can die in rags due to his charity. Either way it was his choice, and capitalism is the only economic system that starts with the premise that you own your time and your effort.
I would want to ask with a few questions, first of which, if capitalism is fair? Yes, capitalism is fair, but the term may be misunderstood. The principle behind capitalism is profit and loss, and understanding both are equally important in their proper role. I can already feel some saying yes because it is a zero sum game and one must lose if another wins! However, this idea is laughable and immature. Gain comes because someone provides a product for a price that another sees as a good value. He will then give up some of his money voluntarily in a trade. You could very well find a situation where the business man undervalued his product and the consumer overvalued the same item, causing both to think the other lost and he the winner! May I ask who the loser was in this example?
This is another beautiful aspect behind capitalism. The business man acts in his self-interest, as well as his consumer. The natural instincts both benefit each other. The gain in a capitalist system is directly tied to human nature. Men and women acting in their self-interest.
What about loss? Loss is a correction in market forces. It can come about by many honest means; the overvaluing of a product, or lack of marketing skill perhaps. The other form of loss is because of fraud or deceit, in these cases courts are used to resolve the issue and obtain recompense for the injured party. If government does not stand in the way of gain and loss, then this simple method of the invisible hand works to the fairest outcome possible.
What about equality I can hear some say. Well, would you prefer fairness or equality? Obtaining one is a guarantee of the bar to the other. If as in capitalism. two business men start off with the same idea, yet one of the men works at it as a part-time avocation. should they both be paid the same? They both are performing the same duty and it would be equal for the two who do the same service to be paid the same amount. However, would that be fair? Would the man working 40 hours or more each week accept the pay of the other who works 30 with a smile? Should he say but this is equal and I love equality?
If I have hit a nerve in this paragraph, good, I am achieving my intended purpose. Our Declaration of Independence says that all men are created equal, not that they are equal. We are guaranteed the same rights and the same opportunities to do with our own lives as we wish. If capitalism is to succeed, it is through fairness and not equality. It is fair for people to end with unequal amounts and for them to start with unequal amount due to love from a parent. So what is my point?
In life we have to maintain a balance of what is theoretically good and practically possible. In the case of an economic model, three things must be held in the highest regard. Human depravity is one, even the best of intentions can lead to the worst of actions. Human nature, we all have instincts that go beyond anything taught. These natural drives will overpower logic in most cases. Lastly, the ideal of fairness, how do you use the least amount of force possible to ensure people are allowed to keep what they earn.
In capitalism the human depravity is forced to fight human nature. This battle between what I ought to do and what I want to do ensures fairness and freedom, and freedom is what all men want in the end.