Bushman: "On Being Ill at Ease in the World"

[LeSellers]

There's a big question about whether capitalism is coercive by nature and that question revolves around first appropriation.

Perhaps, but free markets (I do not support "capitalism", per se, but I am adamant about supporting free markets) are the only way to produce anything in this world without coercion.

If one examines the common pencil, he is struck by the intricate ballet required to get it from its millions of sources to the desk. I, Pencil

Enjoy,

Lehi

[Jeff K.]

Not so much friends but college professors ;-) Still, they weren't economists either and most of them were social historians addressing other topics like how the bicycle changed Europe or whether African Americans were still enslaved by an increasingly oppressive white middle class. I don't think I had a single professor that taught economics with anything more than a cursory mention. But I did come away with the distinct impression that self-interest was the moral (for lack of a better description) restraint of capitalism. It certainly could have been my misunderstanding but here are Smith's own words from Wealth of Nations.

Well, if they had studied Adam Smith they would have known that he vociferously argued that a moral underpinning must exist.

Quote

It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.

and again

Quote

The natural effort of every individual to better his own condition...is so powerful, that it is alone, and without any assistance, not only capable of carrying on the society to wealth and prosperity, but of surmounting a hundred impertinent obstructions with which the folly of human laws too often encumbers its operations.

and finally

Quote

Every individual... neither intends to promote the public interest, nor knows how much he is promoting it... he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, 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.

I definitely need to read The Theory of Moral Sentiments as it seems he addresses morality more in that book and economics is much more meaningful to me as an adult than it was when I was in college and my folks were paying for everything ;-) Just to clarify, I wasn't saying that Smith saw capitalism as amoral but that he saw it as inherently moral through rational self-interest (see the third quote above).

The quotes are somewhat ambiguous in the sense that he speaks of "public interest" which is not the same as moral interest. The context of each of those views was in regard to efficiency and choice.

Allow me to posit the following:

Capitalism does allow one to choose to reject morality but it does not create the preference to reject morality. Such rejection would exist under a socialist system as well (as we have have seen in other countries) the point being that the less efficient system rejects morality and produces less in the way of goods. And so we have two points.

1-Capitalism does not cause the rejection of morality, but does allow for the rejection of morality.

2-The inefficiency of other systems would likewise be open to such rejection, but produce less surplus for the decision to accept or reject.

The points are important. Many people voluntarily devote much of their surplus to doing good and living morally in a capitalist system. The surplus of an efficient system allows for such morality. In a less efficient system the individual cannot give or is compelled to give to the state which makes donations often based on political state decisions not decisions of efficiency or moral certitude.

Consider the subprime mortgage meltdown in which the state chose to increase home ownership by lowering standards for loans. The decision was political to ensure political groups (specifically fannie mae and freddie mac lobbyists which favored democrats strongly) favorable to one party would receive treatment and property. Loans were made by the thousands to those who earlier did not qualify. The loans of course were variable since it was believed that the rise in housing prices would overcome the varible of low interest. Rent versus own are not morally distinguished. Some can own, some can rent, no specific right exists for either. But once the collapse occurred, losing one's home did indeed become a possibility. Government does not work efficiency and can create an environment where moral crises can and do occur.

Capitalism allows individuals to more freely give of their surplus. Other systems compel individuals to give of their surplus and distribute it, after assuring the continued survival of the political system with its much larger inefficiencies.

The underpinning of course is that our society continues to emphasise or teach what is morally important to its people, as Adam Smith suggests.

[mercyngrace]

Mercyngrace:

I believe the term you are looking for is "Enlightened Self Interest".

The discussion then quickly becomes what is "Enlightened" as opposed to simple greed.

http://en.wikipedia.org/wiki/Enlightened_self-interest

The wiki page indicates the difference has to do with the effects not the motivation. But greed is greed. We can be smart about it however by making short-term sacrifices for long term payoffs, that's where the enlighted bit kicks in. Still, we expect the payoffs. We expect spending on schools to decrease spending on prisons. We expect a strong standing military to deter the costs of war. We anticipate that those sacrifices we make will ultimately prove worthwhile.

Enlightened self-interest was de Tocqueville's idea and he saw education as the means of enlightenment. What does it say about our system of education that we have several generations now largely incapable of delaying gratification even when it is in their self-interest to do so? We live in a world of near primal selfishness, a fact manifest in everything from our divorce rates to our national credit addiction. I'm inclined to believe the problem isn't with capitalism but with the fact that we expect an irrational people to use a rational system. You must be able to see and assess your best interest in order to make decisions based upon it.

[Brade]

You example regarding the resources is somewhat flawed in that it assumes I feel that capitalism exists without morality, when in fact I believe that morality must exist, as it must with any system. If you were to apply socialism to the model you proposed the same scenario without morality would come about. Simply call the two who control production "aparatchik".

I'm not sure my example assumes any sort of morality. The example simply assumes the conditions that must exist in order for capitalism to operate. That is, there must be people who own the means of production and many more people who do not. Assuming that God gave the earth to all men, there are more than enough resources such that every person can provide for themselves, there's a limit to the amount of space a single man can occupy, and there's a limit to the amount of value (in resources) a single man can generate; how does it ever come to be, in the first place, that all the resources of the earth are owned by a very tiny minority of the earth's population?

And just to be clear, I'm not trying to present a positive case for socialism or communism. State coercion is more objectionable IMO than capitalism.