The Great Debate: Can Capitalism be Ethical?

In this month’s Great Debate we ask if an ethically responsible form of capitalism is possible. Can a system built on profit and competition be utilised for the good of people without damaging the environment, or is reckless consumption, environmental destruction and inequality intrinsic to its nature?

YES / Dan Stewart

Consumers increasingly demand products their moral awareness impels them to. Likewise, politicians are under pressure to implement policies that mitigate the stresses of globalisation. These forces can come together to produce recycled, carbon neutral, free range or fair trade products, and policies that combat climate change, poverty, and global disease.

Human civilisation has all the moral tools it needs. Ethical principles that emphasise reciprocal rights and responsibilities have long characterised human societies. The Golden Rule features in more than a hundred world religious and cultural canons – “Do unto others as you would have them do unto you.” The ancient Egyptian and Greek moral code recommended not doing to your neighbor “what you would take ill from him.” Both the Old and New Testaments include the Great Commandment to “love thy neighbor as thyself”, and Muhammad’s last sermon taught the faithful to “hurt no one so that no one may hurt you.”

For many Eastern faiths where variations of the principle are found, such as Buddhism, Hinduism, Taoism, and Jainism, the Golden Rule goes beyond mankind to encompass all creatures, because sentience exists in a spectrum. According to the Hebrew Scriptures at the fount of Western religion, humankind’s role in nature was that of stewardship.

If the Golden Rule acts to guide one’s rights and responsibilities toward others, the principle of the Golden Mean helps balance to be achieved. A key concept in Chinese, Greek, and Indian philosophy, the Golden Mean emphasises tolerance, moderation, and pluralism. Aristotle’s maxim “nothing in excess” and Confucius’s doctrine of equilibrium speak to modern concepts of sustainable living.

In the 1980s, the Brundtland Commission defined sustainability as an integration of economic, social, and environmental spheres, to meet the needs of the present without compromising the ability of future generations to meet their own needs. This is simply a special case of the Golden Rule: do unto future generations as you would have them do unto you. It is a definition which extends sustainability beyond traditional areas such as energy, natural resources and emissions, to community relations and working conditions. These basic ethical principles require individuals to consider the consequences of their actions upon both their peers and their environments.

NO / Ragnhild Freng Dale

What does ethical practice mean in a capitalist context? According to the Oxford English Dictionary, ethics relate to moral principles, avoiding practices and organisations that do harm to the environment. Capitalism, as an economic and political system where trade and industry are controlled not by the state but by private owners for profit, seems to render ‘ethical capitalism’ a contradiction in terms.

Marx takes capitalism to emerge from a separation of the forces of production from surplus value, which comes to be owned by a small upper class. It can also be seen as an extension of Weber’s ‘protestant work ethic’: separating faith from everyday practice. At a public ResPublica debate last year, Sir Giles Fraser said that we have seen a “thinning” of society along with this separation – and that the idea of a common good disappears with it. The consequences of our economic transactions are no longer seen as their cause, in a never-ending production process that always must end in surplus. When there are no more resources to exploit, this system divides up and distributes small packages of social services, mortgages, tar sands and human dignity. We are left with an economy where no one is responsible or accountable, but which is ‘too big to fail’ because we can no longer imagine an alternative.

Neoliberal capitalism has further engulfed all other forms of economy: hunter-gatherer societies, nomads, and small-scale farming communities are encompassed within a mode of production that is no longer for sustenance, but creates surplus value for export – what economists like to call “growth”. In the countryside, this means a stream of resources (food production, oil, metals) and people away from the land and into the cities. In the cities, it means a constant flow of capital, labour, contracts and resources, beyond any particular individual or institution’s control, leaving human lives in as much flux as the derivatives on the stock exchange.

In 1987, the Brundtland commission proclaimed economy, society and nature as equally important pillars in a sustainable future for present and future generations. This conclusion wrongly assumes capitalism is able to care for people’s “needs”, when its pursuit of profit considers the largest circle to be the economy, enclosing a society that only has a peripheral relationship to nature. Nature becomes a servant and a provider of services, and everything, even fresh drinking water, comes at a price. An ethical approach would be much more radical: the places in the world with the lowest carbon footprints, whether small-scale farmers in Bangladesh or nomadic campers in Haggerston park, are communities that tend to imagine nature as all-encompassing, and including both society and economy.

The logic of capitalism leads to overexploitation of resources, both human and natural: disguising the fox as a cuddly animal of organic fair trade will not remove this underlying trait. Until we shift our economy away from growth towards sustenance, we will keep robbing resource bases from groups that practiced different forms of economy long before we extracted ‘value’ from their lands. A turn to a sustainable economy will require a turn to an economics where ethics emanate from a care for the environment – including people – as its first priority.