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11 Competitors: Repealing the Law of the Jungle

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People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.

—Adam Smith, Wealth of Nations 1

CONSUMERS PROVIDE THE COMPASS for capitalism, employees do the work, owners make the arrangements, and suppliers feed the machinery of business, but competition hones business decision making, always driving our attention toward the needs of others. When competitive pressures ease, we can more easily impose our arbitrary will on the markets of capitalism. Competitive markets—for customers, investors, employees, supplies, innovations, reputation, etc.—force accountability on business managers by weeding out poor performance. In this competitive markets perform a moral function; they keep people on their toes and always facing the music.

As argued in Chapter 6 under Caux Round Table General Principle No. 5 on Support for Multilateral Trade, moral capitalism presumes a right of competition. The expression of personhood and personal dignity through use of property permits competitive efforts to better ones condition. Competition opens doors for more robust individuality across society, without regard for restraints imposed by the status quo. Competition cumulates the various impacts people can have on the world around them; it is property in motion changing the way we live.

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Contents

Young, Stephen Berrett-Koehler Publishers ePub
Medium 9781576752579

5 Moral Capitalism and Poverty: Must the Poor Be With Us Always?

Young, Stephen Berrett-Koehler Publishers ePub

When my pockets were full of money, all my friends were standing round;
Now when my pockets are all empty, not a friend on earth can be found.

—Ramblers Blues, American folk ballad

Plate sin with gold, and the strong lance of justice hurtless breaks; Arm it in rags, a pigmys straw does pierce it.

—King Lear, act 4, scene 4, William Shakespeare

MARKET CAPITALISM AND THE PRIVATE PROPERTY it uses to create an endless flow of wealth bring great benefits. But, within national economies and in the world at large, not everyone shares in this wealth. Consider the facts on global poverty even after a decade of dramatic economic growth, during which time private sector market activity created the controversial phenomenon known as globalization.1 Communism committed suicide, and free markets were finally recognized as the economic system that best produces goods and services.2

One billion people in the world are doing well, mostly in the European Union, the United States, Japan, Canada, Australia, Singapore, Hong Kong, Korea, and in a few other countries. The face value of stock market capitalization in these wealthy countries rose from roughly some $9 trillion in 1990 to some $35 trillion before the market downturn of 2000. These stock markets hold more than 95 percent of the worlds equity capital. By the end of the decade, on the other hand, half of all our humans—three billion people—live on less than three US dollars a day. Another two billion people are poor but live in countries that are making some economic progress.

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1 Is a Moral Capitalism Possible?

Young, Stephen Berrett-Koehler Publishers ePub

The mind of the superior man is conversant with righteousness; the mind of the mean man is conversant with gain.

—Confucius, The Analects, Bk. IV, Chpt XVI

As there is a degree of depravity in mankind which requires a certain degree of circumspection and distrust, so there are other qualities in human nature which justify a certain portion of esteem and confidence.

—Federalist No. 55, Friday, February 15, 1788

THIS BOOK AFFIRMS that moral capitalism is possible. First, in Chapters 1 through 5, it justifies faith in moral capitalism; then, in chapters 6 through 12, it provides a practical guide for those who want to achieve moral capitalism in their business pursuits and professional undertakings. Finally, in a concluding chapter, it discusses how, in these times, we can cultivate leadership sufficient to build a moral capitalism.

Seeking market profit through business and the professions is honorable and worthy. Based on the ideas and principles set forth in these chapters, I believe that each of us can indeed go to work every day for any business, great or small, feeling genuinely happy and proud of our career commitment.

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4 Moral Capitalism: Using Private Interest for the Public Good

Young, Stephen Berrett-Koehler Publishers ePub

he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. By pursuing his own interest he frequently promotes that of society more effectually than when he really intends to promote it.

—Adam Smith, The Wealth of Nations 1

Where there is no vision, the people perish.

—Proverbs 29:18

THE ARGUMENT FOR MORAL CAPITALISM has two parts. First, as Adam Smith asserted in An Inquiry into the Nature and Causes of the Wealth of Nations, free markets have an inherent tendency to bring about a convergence of virtue and interest. In other words, the logic of self-interest considered upon the whole when applied to business over time leads to betterment for the individual as well as for society. Second, moral capitalism is advanced and accelerated by a sense of service, a fiduciarylike sensitivity to others.

The German philosopher Hegel concluded that private property was necessary for morals. Without seizing hold of some touchable part of the cosmos, no person could fully bring his or her values into being.2 In Hegels terms, to objectify a subjective intent, to move from mental states to physical being, to incarnate value into the evolution of the world, something tangible had to be transformed according to the dictates of our own will. Only speaking of our intentions would not always fully bring our personhood into palpable being for others to take into account and accord us the dignity we seek. People have a need, Hegel assumed, to leave their mark on the world. That happens only once some part of the world is appropriated as being especially ours, to the exclusion of control by others. Ownership of things—a right to private property—therefore, has an important place in the theory of morals in that ownership of property enhances the living presence of our dignity.

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