My summer is coming to an end. Looking at my schedule next week, I am on campus and in my office everyday. I have meetings scheduled for most of the week, starting with today’s BBQ with the faculty, but don’t get me wrong, I love it.
It has been a good summer. I taught a little, wrote some syllabi, and began developing a new program for WPC. Social Entrepreneurship has motivated me to think about Capitalism, which I have spent all summer reading, thinking, and writing about.
I teach a course on Business Ethics, and during that course we discuss Utilitarian philosophy. This is a consequentially based philosophy that determines whether something is right or wrong based on its consequences. It is a philosophy that looks for the greatest good for the most amount of people. Utilitarianism and Democracy go hand in hand, and is generally viewed as a good thing. However, without some type of moral foundation that defines right and wrong, Utilitarianism validates itself not by justifying the end and means, but by justing the means by the end. Thus a Hitler can say his genocidal actions were for the greater good of Germany, thus making the extinction of a people right.
Obviously that is an extreme example, and none of us would take that path. In contrast to a greater good the term meritocracy emerges. The definition of meritocracy deals with elitist leadership based on ability. When applied to economics it contrasts with a greater good, by focusing on earned success. A success based on ability. The problem with meritocracy is the developing of social systems that eliminate opportunities that lead to the greater good, and replace them with systems that lead to cronyism.
Cronyism is a nepotistic system. Something I did not know about the word nepotism is that its origins are from the history of the Catholic Church. It seems that pope Alexander VI provided opportunities for his nephews. However, these nephews were actually his biological children. He was a pope, thus not supposed to have children. Cronyism and nepotism are elements of a system that is unfair. It eliminates opportunities for all, and gives them to the few who do not deserve them.
This is what people usually ascribe to Capitalism. Obviously, when you have an economic/political system that is probusiness, specifically pro-big business, that will lead to cronyism. On the other end of the spectrum, Robin Hoodistic socialism is not the answer either. It eliminates the meritocratic fairness that the American dream is all about.
Thomas Jefferson said, “To take from one, because it is thought his own industry and that of his fathers has acquired too much, in order to spare others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to everyone the free exercise of his industry and the fruits acquired by it.”
Alexis de Tocqueville, a French visitor to the United States in the early 1800’s stated that Americans are “contemptuous of the theory of permanent equality of wealth.” However, American is recognized as a country of opportunity, one where a person can earn success.
Our government’s responsibility then is to support a system where people have an opportunity to be successful. Where people can develop the skills needed for, if they choose to work hard, a successful career. When the government chooses to create elitist policies to undermine that, then the process becomes skewed. Capitalism is not for creating a probusiness agenda that “aims at maximizing the profits of existing firms,” it is for the creation of a promarket economy that allows people an opportunity to work hard and create a good living. Zingales sates, “Free and competitive markets are the creators of the greatest wealth ever seen in human history.” Opportunity and earned success lead to a better life style.
What do we then do with that success? Arthur Brooks states, “The views of Tocqueville and Jefferson follow an ancient truth: that to take resources from those who legitimately earn them and give them to another who does not is not fair. If it is voluntary, it is charitable. But if it is coerced, it is unfair. Aristotle put it best: The worst form of inequality is to try to make unequal things equal.”
There was an incredible statement made yesterday in the WSJ by Anthony Davies and Kristina Antolin. “Perhaps we dehumanize the poor when we treat them as nothing more than problems to be solved, and we dehumanize the rich when we treat them as wallets to be picked.” They don’t stop here, they continue, “Wealth and poverty are catalysts for bringing the rich and the poor together in community, and community is the hallmark of the Church’s mission on earth.”
There you have my philosophy. I believe in the free market, with government acting as a referee; I believe in a system that supports an equal opportunity to work hard and earn success; and I believe in a system to gives to those in need via charity not coercion.
And that is my thought for the day!