Capitalism is Moral

by Connor Storey

Adam Smith - economist and moral philosopher

With the rise of socialism worldwide, whether that be Jeremy Corbyn in this country or Bernie Sanders in the USA, capitalism is under threat. It is said to be an immoral economic system that makes the poor, poorer and the rich, richer. Often, the word is associated with negative connotations of greed, inequality and injustice. However, I would argue differently. Capitalism is defined as being an economic system in which businesses are privately owned, rather than being state controlled. Each transaction in capitalist societies are voluntary. If two people are trading with one another, each person must benefit from the transaction. Otherwise, the transaction would not have taken place. Only when the two people agree, the exchange takes place.

On the other hand, models such as Socialism are not voluntary. Let’s take an example to illustrate this. Let’s say that person A is eating toast on the way to school and person B asks person A if they can have the other slice of toast. Under capitalism, person A is able to choose whether they want to give the slice of toast to person B. And for the sake of argument, let’s just say person A decides to give them this slice of toast. Both A and B decided to make a private transaction that they both agreed to. However, under socialism person A would be forced ,by a third party, to give his other slice of toast to person B. Both examples show the same outcome but the process is completely different. From the example above you can see that socialism uses force to achieve a desired outcome. This is what socialism dangerous. No matter how good the intention is, the government uses force to enact it and the bad moral value of force always outweighs the moral good. That’s why socialist societies become corrupt. When power is in the hands of people persuaded by the purity of their intentions, harm is guaranteed to be done. A saying goes: “the road to hell is paved with good intentions”.

The core foundation of capitalism is founded on the principles of liberty and choice. That individuals pursuing their own interests , under their own responsibilities, is what benefits society greatest. The greatest achievements throughout history have always  been achieved by individuals. Einstein didn’t discover the Theory of Relativity because government told him to. Florence Nightingale didn’t make hospitals cleaner because government told her to. Martin Luther King, Jr didn’t fight against racism because government told him to. These individuals all pursued their own interests and the effect they had on society was beneficial, through their own voluntary action.

Since the discovery of capitalism, the world has experienced the fastest decline in absolute poverty. China is a perfect example. Following the ideas of Karl Marx (and the philosophy of communism), Mao Tse-ting became the dictator of China in 1949 and he envisioned a society where everything was communally owned. Land was seized from landlords, businesses were nationalised and political opponents were either killed or imprisoned. After about ten years of rule, the production of food plummeted and so a famine that killed millions was unleashed. By 1978, the Communist Party had to adopt economic freedom in order to improve the country’s economy. Due to the economic reform, China has become a country that now embraces private property rights, competition and profit. The country is now one of the largest economies in the world and without the economic reform in 1978 the country could still be in poverty today.

Despite capitalism being believed as an  immoral philosophy based on the exploitation of the poor. The lowest incomes have benefited the greatest from capitalism as economic freedom has enabled people to take responsibility for their own lives, whilst having the ability to create their own wealth, through private transactions.