Friday, September 17, 2010

Rescuing capitalism

On Thur, Sept 16, 2010 at 04:52:35
Derrick asked this question:

I recently read a report on a request made by the Russian Minister of Finance who asked that Russians smoke and drink more as the country needed the revenue. Is this not as a result of their adoption of the capitalist system, a system that has been faulty since its exception?

Communism did not work and the West did its utmost to see it failed, the Capitalist system is no better as it benefits only a small segment of the population and the myth of the creation of wealth which is now the holy grail is all smoke and mirrors and has value as long as the paper Dollar retains its value.

When it comes to finance we have people who are awarded the Nobel prize for the creation of systems that are supposed to improve how systems work, I have yet to see this actually effect anything, in fact things keep getting worse.

We are told how well we are doing while pensioners don't know how they are going to survive.

We are also told the markets know best, best for who? A shareholder's interest is never a countries interest, self-interest is the only consideration.

What do we need to break the cycle of greed, a 3rd World war? But then war is profitable.

I understand Greek Philosophers had thoughts on matters of finance, does Philosophy have solutions or is man so flawed that we are too far into the abyss to pull back?

Derrick's question is timely. I have been seriously considering whether I want to continue as Editor of Philosophy for Business, the e-journal which I launched in November 2003, in an atmosphere of heady optimism that a 'reformed' version of Capitalism, or 'Capitalism 2.0' was just around the corner. The philosophers would show the way.

While the readership of the e-journal has steadily increased, the flow of articles has significantly declined. There are undoubtedly business ethicists out there, marketing their expertise, but they've gotten smart. They know the things that companies and corporations don't want to hear, so they don't tell them. All the talk is of how, by increasing the company's ethical quotient, or boosting its CSR strategy, or even developing the 'emotional intelligence' of managers and executives, profits will inevitably increase. Cast your bread upon the waters.

Don't mistake these remarks for cynicism. I think that the business ethicists are doing the right thing, the only thing they can do, by working for evolutionary change and not trying to start a revolution. If things seem to be going very slowly one has to remember that the system has massive inertia. Change will come, but it will come slowly. At least, that's the optimistic forecast.

But too slowly for the likes of me. The great slogan of defenders of Capitalism (of which I am one) is 'freedom'. I believe in freedom. You can't have freedom without the marketplace, where goods, commodities and services are freely bartered and exchanged. That's the way it works. This isn't caving in to human 'selfishness' but rather the only way the game can be played. There's a place for ethics, provided you recognize that ethics and CSR are things you have to budget for. In some years you have more to spend and in other years less.

What really hurts me is seeing how unfree this same system has made us. If someone offers you work you don't waste time thinking whether you really need the money (unless you are lucky to have an inheritance or private income). It doesn't matter if you are a senior executive or do the postal round. Now, as a response to the recent downturn, belts are being tightened once more, we are being asked to work harder and longer — while we avert our eyes from those unlucky enough to be cast on the scrapheap.

We are prisoners of our own expectations — for example, that the only healthy state for an economy is growth. You must consume more, so that the money can go round, job opportunities increase etc. This is all economic witchcraft. Why not consume less, work less, have more time to dream, more time to philosophize?

Our wealth is one another, our friendships, our human capacities, the world of culture that human beings have created. When will there be an economics of that? Could there be, or is it more realistic to assume that the very concept of being 'economical' is at fault, that human beings are at their best when they are extravagant, when they don't count the cost? When was the last time you treated yourself — or your partner, or family — to something you couldn't afford? If you ever did, did you feel guilty afterwards? Shouldn't one feel more guilty at allowing such base considerations as money to influence one's decisions? (Actually, I think we do — based on my own experience.)

I sympathize with the Russian Minister of Finance. Alcohol and tobacco are two of the greatest benefits bestowed on humankind and at the same time two of the greatest curses. They are not just 'addictions'. They make you feel good. I can't think of anything more important then feeling good about oneself and about the world. You'll say that the country 'doesn't need' even more resources expended on the illnesses caused by smoking, or the social disorder caused by drinking. But maybe there is a balance that hasn't been reached yet. The economic benefits of a ten percent increase in smoking, say, marginally outweigh the cost of the increased burden on the health services. I can see that.

In his question, Derrick refers to the Greek philosophers. One of the fashionable trends in contemporary business ethics — reflected in the number of articles on this topic published in Philosophy for Business — is the application of Aristotelian virtue theory to the business world. The focus on the virtues needed for the 'good life', and in particular, the virtues needed to be a good business person, is one that I welcome. (See my Ethical Dilemmas, in particular Unit 10.)

The problem is that if you are looking to redress the imbalance between the rich and the poor, Aristotle and Greek philosophy generally is the wrong model. The Greeks had no problem with the idea of social inequality. Slaves were an essential part of the well-ordered polis. Unless you give a totally false, 'Christianized' gloss on the notion of 'virtue', there is no necessary corollary that exercising the virtues, or the business virtues will lead to a 'fairer' world, where we can all be free and equal together.

But I agree with Derrick that the world is in a mess, in so many ways, as it always has been (although that's no comfort).

My response is unoriginal, one that you will have heard many times before. If you can't change the world, if things move too slowly regardless of your best efforts, then at least you can work on yourself. If you are well-off, in a good job, then stop being so complacent. Become aware of your over-dependence on the system, which rewards you now but tomorrow may kick you out through the back door. If you are poor, then stop complaining. Consider all the ways there are of improving yourself without amassing useless material possessions. Ask how you can be helpful to others rather than just looking to others for help.

I am going to publish my answer to Derrick in the next issue of Philosophy for Business, which is due to go out at the beginning of next week, provided I can scratch together another couple of articles to go with it. If you are a philosopher or business ethicist reading this, then the offer of the Editorship is genuine. There's no salary, but then there's not a lot of work to do. Mainly, you will be badgering (or, if necessary, bullying) colleagues or people you know into writing articles. It would look good on anyone's CV.

If you're interested, email me on Initially, you will be invited to guest edit one issue. This is an experiment we've successfully tried in the past. If you pass the test, and still have the appetite for more, then the job's yours for as long as you can continue the flow of quality material. Think about it. It could change your life — it certainly changed mine.


  1. Dane (the little man)October 13, 2010 at 3:40 AM

    Hm. I'm what you might call an amateur philosopher myself (I say "amateur" only because just in the recent year have I delved deeply into philosophy, and also there's the fact that I'm just fifteen years old). Me and a few college buddies of mine have been pondering how, if at all possible, one could reform the capitalist system in such a way that would not cause massive recessions and depressions. I like this question-and-response simply because it summarizes nicely the problem we face as a nation when we look at our economy.

    Personally, I think we could take it a step further than working on the individual level by pushing for a return to a resourced-backed economy, where our legal tender actually meant something. And how may we achieve this? It's something I believe to be true and something you touched on: ideas have inertia.

  2. I think, Geoffrey, that you really avoid Derrick's initial question, and when you do mention it you mention in such a way that a plan to get more Russians to smoke and drink (without their being aware that the point of this is to boost the Russian economy) is on all fours with the Tuskegee experiments of the last century, in which the participants were unwittingly infected with syphillis so that they could be studied ('for the greater good').

    The advantages and disadvantages of economic and social practices is not a philosophical problem: even if it were shown that people in lands like the US were happier/unhappier than those in countries that are much more 'socialistic,' there would remain a question whether mere happiness, unspecified as to source, duration, or outcome is the end of human striving.

  3. Robert Paul said:

    "The advantages and disadvantages of economic and social practices is not a philosophical problem.... there would remain a question whether mere happiness, unspecified as to source, duration, or outcome is the end of human striving."

    And this question you mention would also be a philosophical question....and hence a philosophical problem.

    I would certainly agree that the issue at hand should not be be dealt with solely on philosophical grounds. There are important questions of economics, sociology, etc; however, to say such an issue is not a "philosophical problem" is to misunderstand the fact that any question dealing with the plight of humans at all can and should be phrased, in part, philosophically.