1 Response to Greed is Not Good For Capitalism From TGC

1. Harris says:

   August 18, 2012 at 3:34 am

   I’m trying to sort out the article: as far as I can tell, Foster is actually arguing for something close to an “Optimal Capitalism”, a capitalism that works best. From his viewpoint, when capitalism has worked best it has done so by being grounded in a moral viewpoint. The utilitarianism that governs the transactional side (that is, the self-interest of the actors) rests on pre-existing moral assumptions. This is obviously not a stable relationship. Indeed, the historical difficulty is that the very nature of utilitarianism tends to erode this set of moral assumptions (religious or otherwise), as one can read in the hesitation of Christians throughout the 19th Century on the role of money and enterprise, Christians both leading enterprises and those in the Church.

   But if the author is arguing for an Optimal Capitalism then he is likewise advancing a moral critique of current practices, assuming that present work is not especially optimal. Now an interesting question underway would be what determines this optimal outcome. What well-being are we striving for? Again, the business of utilitarianism and the “doctrinal” neutrality of business practices seems to recreate the conflict. Can moral precepts function as a boundary to capitalist endeavors? Is there some set of moral bright lines that ought not be crossed?

   Perhaps here, it should also be noted that the article basically deals with the relationships between economic enterprises, and so leaves off the tougher situation of internal affairs. Greed most regularly raises its heads in how gains are to be distributed between the various levels. Why, for instance, don’t we see wider distribution of the gains from productivity in our current economy where wages of those in the middle have seen very minimal growth?

   Lastly, I found that there was a certain drift to optimism that would be experientially unwarranted. The underlying notion of most market economies is that they are self regulating through competition. Yet at the same time we also find two sets of easily observed phenomena: the regular collusion among the actors led by their own self interest; and secondly the distribution of success along Pareto’s lines (the so-called 80-20 rule, where 20 percent do 80 percent of the business). Both limit the effective role of competition as self-regulation. Cooperation and co-option seem more the order of the day.

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