Is There Such a Thing as Ethical Capitalism?

In response to a growing realisation that neo-liberal capitalism is morally and literally bankrupt, Britain’s political leadership have attempted to provide visions of ethical capitalism for us to aspire to.  Today’s article explores the question  ‘Is there such a thing as ethical capitalism?’ and why it is being asked now.
What is Ethical?

Ethics is a form of philosophy which seeks to categorise, codify and champion concepts of right and wrong.  Not an easy task when what is considered right and wrong is almost, if not always, a matter of perception.

Some will seek to demonstrate the existence of an objective, universal morality with such arguments as ‘murder is a crime in almost every civilisation’. Yet, in most civilisations, soldiers are considered heroes.  Therefore in some cases, murder isn’t only not wrong, but right.  For other people, pacifism is absolute, taking a life is wrong in any circumstance without equivocation.

There are myriad other examples, but all simply indicate that the only thing universal about ethics, is its universal subjectivity.

That is not to say that ethical and moral codes cannot be put in place.  They can.  But there will still be swathes of people who fundamentally disagree with them.  So, while a set of agreed rules exists in most societies, an agreed set of ethics does not.

Ethics can also be seen as binary, or spectrum.  A binary view of ethics would say that something was either right or wrong, ethical or unethical.  However, using a spectrum view, there is a sliding scale ranging from the most heinous unethical extreme at one end, to the apex of moral good standing at the other.  In short, binary ethics asks ‘If’ something is ethical, spectrum ethics would ask ‘How’ ethical something is.

What is Capitalism?

Considering it is purported to be the global system we live within, there is a stunningly limited understanding of Capitalism.  Despite this being the prevailing world economic system, it is not taught until University in the United Kingdom.  This means the vast majority of the population have never even had a structured, informed conversation around the mechanics and iterations of Capitalism, let alone whether it is ethical or not.  People don’t know what it is, what it does, what it means, where it came from or what it replaced.

Capitalism is a socio-economic ideology, a theory and the current global economic paradigm.  It originated in The West and gained a foothold in the 1700-1800’s and ultimately replaced Feudalism.  It was a radical view at the time promising individual liberty, an opportunity for every (white) man (women exempt for another long while), and the opportunity to own property and participate in trade and enterprise – rather than accept poverty and the rule of the King.

It is not just an economic theory, but a social philosophy.  It has gone through various incarnations, or developments, from Mercantilism, Industrialism, Keynesianism, and the latest – Neo-Liberalism.  It exists in established democracies and totalitarian dictatorships.

I have had conversations on the topic of a world without capitalism with intelligent people who, without irony, have stated that capitalism has always existed and will always exist because people will always want to exchange things with each other.

To be clear, you can have an economy without it being Capitalist.  You can have trade of ideas, labour, skills and products without Capitalism. Capitalism is not synonymous with any of these things.

I mention this not to belittle, but to demonstrate how successfully and misleadingly Capitalism has been branded as natural, inevitable, permanent and, arguably the most intriguing, ‘post-ideological’.  It is none of these things.

A Matter of Context and Perspective
The context set by Capitalism is competition.  It is a win/lose game.  This context assumes that competition is the prime driver of progress. But is it?

Technological and scientific progress relies on the broadest population of educated, innovative, critical thinkers with access to means of contributing ideas, skills and capabilities to achieve breakthrough results.  Yet in order to safeguard the profit from any venture, it makes economic sense to have the smallest group of people involved as possible, operate secretively, and use patents and licenses to prevent others from ‘stealing your idea’ and making the profit from it that you would seek to.  In order to progress more quickly, one would need to override or compromise this economic imperative.

There has been fascinating work recently covered in TED talks on this matter and I’ll use one example: cancer research.

Jay Bradner, a researcher at Harvard University, and his lab discovered a molecule JQ1 which they thought might explain how cancer cells know they are cancer cells – and wanted to explore if this finding could be used to outfox cancer.   His microbiology lab chose to refuse to patent JQ1, and instead to publish their findings, post them out to 40 other labs, and open source the development of their work.

The results were astounding.  Results were achieved in record breaking time and the drug is already being rolled out.

This case demonstrates that scientific progress does not rely on competition, but collaboration.

Far from progress being caused by Capitalism, in many areas progress has been made in spite of Capitalism.  Considering the incredible pace of scientific and technological advancements with these limits in place, the mind boggles at what would happen to so called human progress if the collective mental and physical power of the 3 billion people currently starving in the world, were available.

The Bradner case also highlights another issue. Do we want our society to make people choose between personal wealth and making the best decisions on critical matters like curing cancer?

Supporters of Capitalism might ask ‘why should people not benefit financially from their skills and capabilities?’, yet it could equally be asked of Capitalism ‘Why should we penalise people for collaboration?’ or ‘Why would you incentivise behaviour which holds us back?’

Be it economic stability, education, health, famine, poverty, security, the global commons, climate change, civil liberties, human rights, technological and scientific progress – any mode of economy needs to be consistent with social goals related to these elements.  Why?  Because if it is inconsistent, then you place individuals and organisations in a position of conflicting social and economic priorities.  Either they honour the social goals, the economic goals, or they search for some compromise – and there is often not a compromise to be found.

Actual success and economic success are not one and the same thing.

This is why context is so important when addressing the matter of ethical economy, and the context of Capitalism places unnecessary ethical dilemmas into our lives.

We can now move on to perspective, which is vital in addressing questions of ethics, particularly in the case of Capitalism.  One of the hardest argued cases for Capitalism is the aforementioned progress.  Capitalism, it is said, propels people to work hard, in order to succeed financially, and therefore wider society benefits from the increased productivity of the population.  It is also alleged to lead inexorably to individual liberty, freedom and democracy.

Now, from a superficial ‘Western’ perspective this might ring true, and therefore make Capitalism appear ethical. The post industrial revolution period of history has seen extraordinary leaps of progress in science, technology, human rights and democratic participation.  So for many people, compared to Feudalism, Capitalism is an improvement.  People cite democracy, universal healthcare, education and the welfare state as representative of this progress.  Let us assume for the moment that they are.

A person born into a non Western family, country or region of the world could have a quite different perspective.  From Foreign Direct Investment, to The Debt Trap, to coups of democratic leaders in order to install dictators who would ultimately generate a profit for western corporations, to Structural Adjustment Programmes used by the IMF on African and Latin American countries shifting production to foreign trade rather than domestic need, to the morally defunct trade in weapons, to a toothless UN general assembly and a pointless US dominated UN Security council.  All of these policies, decisions and institutions were created in order to perpetuate and stimulate ‘progress’ on one side of the world, at the direct and indirect expense of survival, let alone progress, on the other.  So from this perspective Capitalism would be the barrier to democratic, social and economic progress. It might appear grossly unethical.

There is another perspective.  There is the perspective of the Citizens of the World.  This perspective is exemplified by global movements such as Occupy and others. From this perspective, it is unconscionable that progress for one group continue to be made at the cost of, and with little or no benefit to, the majority of people on the planet.  This makes it unethical to those benefiting and suffering at the effects.

The Least Unethical Thing?

For those people who see the ethos of Capitalism itself as unethical, the question ‘Is there an ethical or more ethical form of Capitalism’ is a moot point.

Nick Clegg, Deputy Prime Minister of the UK government and leader of the Liberal Democrat party has been known to trumpet the idea of what he calls a John Lewis economy.  Not only is this offensive to those who find the principles of Capitalism morally redundant, it is not clear if it means anything at all.  John Lewis is a department store; it operates within a capitalist economy.  Aspiring to a John Lewis economy is like aspiring to Scout Club Christianity, or Air Cadets Defense Policy.  John Lewis is a company, the world isn’t.  A wistful, ‘oh wouldn’t it be nice if all our companies acted like John Lewis?’ does not translate into a just and ethical economic model – what of currency control, trade agreements, migration – what would John Lewis do?

Furthermore, even if we take the statement at face value, assuming it to mean a more equitable, responsible, fair capitalism – the concept is still problematic if Capitalism itself is considered unethical.  In this light, talking about John Lewis Capitalism, is comparable to talking about Theresienstadt Nazism or expounding the virtues of ‘separate but equal’ over slavery.  They may well be moving in the direction of ethical on a spectrum scale, but what is the point of making such an unethical thing, slightly less unethical? Surely, one could conclude, our collective time and energy would be far better spent in the act of creating an ethical scenario, than seeking – cynically or otherwise – to dampen the worst impacts of an unethical one.

For Whom the Bell Tolls
Is there such a thing as ethical capitalism?  Probably not.  More importantly, despite the failure of political and other institutions to do so, broader social movements are setting the horse back before the cart.  They are asking ‘what kind of society do we want?’ Questions about the most ethical or suitable economic system to support that comes after.

As before, in the dying days of Feudalism, human society is once more at the point where its economic model no longer fits the ethical or social ambitions of the majority of its constituents.  There is friction, fracture and frustration.  Discontent hangs in the air, as does the unspoken terror that is (in stage whisper) ‘change’.

Those who refuse today to entertain the conversation or idea of a post-capitalist economy, are no different to the feudal barons and peasants who could not foresee or were hostile to the dynamic newcomer Capitalism in centuries past.  For such people, humanity has reached the apex of its ability to generate economic and political ideas.

To hold a view of humankind as static, or finite in our ability to innovate and create is to fundamentally close one’s mind to the facts, as demonstrated by human history.  It has been said before, that the economy is a great servant but a terrible master.  This is demonstrated perfectly by a glance at the current state of our world.  It seems we have forgotten that we, human beings, invented this economy. If it has ceased to serve us then our best efforts should be made to design another.

A day will come when whatever new model replaces Capitalism also ages, withers and no longer fits our future society’s ambitions, and the process of socio-economic evolution will continue.  This is the reality of human existence, and in my view, the wonder of it.  Let us take this opportunity to be not the desperate hangers-on to a dying, unjust regime, but the instigators of evolution and the architects of our social and economic destiny.

Take Action

May 4th – The 99% Rise Against Austerity – mass protests across the country against ideological austerity

May 22nd – Where’s Daddy’s Pig: The Second Leg – join the Artist Taxi Driver as he pushes a toy pig 3 miles from Downing Street to the Bank of England to protest the pigs at the trough of our political and economic system.

Positive Money – excellent resource on money; how it works, how it’s made, and so on.

The Institute for New Economic Thinking – think there are no alternatives to Capitalism? Haven’t heard any others? Well check this out.

16 thoughts on “Is There Such a Thing as Ethical Capitalism?

  1. Great introduction to the problems of ethical/green capitalism but I’m wondering, after reading the last paragraph, what could possibly ‘replace’ socialism?

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  5. Two things spring from your article for me, one is a bit tongue-in-cheek: imagine a world where in the example of Jay Bradner that you quote, one of the companies or organisations, having received working information about the newly discovered molecule, JQ1, and knowing that Jay and his team, for the benefit of all mankind, were NOT going to patent it, decide to pull a crafty stroke and patent it themselves and benefit from the financial gain that it will give them! In this instance it did not happen – but I’m sure that there have been instances where in vaguely similar situations this sort of nefarious and underhanded “stroke” has been pulled, probably as a direct result of insider information or industrial espionage; for the advantage of money and capital asset.

    In my second example the outcome of any deviousness results in the stoppage of some new wondrous invention or product, and the curtailment of a gift for mankind or even massive profit for the inventor/producer if a decision is made to patent it. The exact opposite of the example I give above in that the advantages of the invention are lost to mankind. This may or may not have actually happened in MY given example – the invention during the last 130-odd years of an alternative to the petrol or oil-driven combustion engine, perhaps running by the use of water as “fuel”…

    Capitalism thrives on these sorts of situation; benefits those who exist merely to ensure that it thrives and that they benefit from its existence – and, of course, anyone else that subscribes to its dominance via the market, shareholding and (dare I say it) off-shore banking facilities! And you are SO right to say in one of your other articles, that it ensures the “trickle-down” effect that many people accept as being advantageous to them personally, but NOT the majority of us!

    • in fact capitalism it will exist as long as inteligent people will try to use the sistem ( for its own interest) and not fight it

  6. A really great essay thanks so much for sharing it. I’ve been really struggling to get my head around what exactly ‘neo-liberalism’ meant – I think you just provided me with the last piece of the jigsaw and cleared that up for me! …And a whole lot more as well – although I might just need to read it over again! : )

  7. BRILLIANT article. You have definitely grasped the issue and shaken it up. I will share on Facebook!

    I did fine two minor editing changes to suggest for clarity of reading early on …:

    “wrong is almost, if not, always a matter… ” Move comma from after not to after always

    “morality with such arguments such as

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