Capitalism & ethics

Abstract

Capitalism is “often thought of as an economic system in which private actors own and control property in accord with their interests, and demand and supply freely set prices in markets in a way that can serve the best interests of society” (Sarwat & Ahmed, 2015, p. 2). As a financial system, capitalism continues to wield titanic social, cultural, and political influence globally. Since the nineteenth century, it has been the dominant economic system in the world. “It could be said that, during the nineteenth century, capitalism took over the world. Developments in trade, finance, manufacturing, farming, energy sources and population growth in Western Europe converged to create a new kind of economy whose rhythms were no longer primarily dictated by pestilence, the seasons, climatic cycles or wars of religion and of succession” (Tribe, 2019, p. 123; see also Akrivou & Sison, 2016; Collier, 2018). Almost two centuries later, the world is dominated by the dual powers of information and communications technologies, on the one hand, and, on the other hand, the clash between capitalism and various socialist-inspired economic systems, in an increasingly sophisticated and normally stealthy battle for global dominance. In addition, pestilence, weather, medical pandemics, antibiotic-resistant diseases, and the interruption of production and supply chains in energy, food, goods, medicine, and medical devices, as well as new threats to peace and democracy, to mention some of the most important, continue to wreak havoc on a grand scale as the power of justice and peace is trammelled or corralled (Weiner et al., 2017). To these grave concerns must be added the long-term consequences of the global financial crashes of recent decades which continue to engender ever-expansive insecurity and a corresponding deep suspicion directed towards those at the top.

During the 1970s, Keynesian principles associated with the theories of John Maynard Keynes lost ground and yielded to neoclassical doctrines as the dominant orientation in economic policy. Later with “Reaganomics” and “Thatcherism” the rationale of economic liberalisation took root in Western economies and became the mantra of success and economic development. In this vein, supply-side economics, as the dominant theory, urged Western governments to foster free trade, allow for a tax reduction of industries, and to deregulate financial markets. The dismantling of trade barriers and advanced globalisation triggered an unexpected production shift to low-cost countries with less regulated labour and fewer environmental requirements. Although these developments with their concomitant evils such as sweatshop labour, environmental degradation, and unfair distribution of wealth have been criticised from different angles (e.g. Piketty, 2014; Savage, 2021), globalisation has been lauded by neo-classical economists due to reduced labour costs, cheap supply, and overall increased prosperity (Pinker, 2018).

In the new millennium, innovative technologies have started to change the business world leading to new challenges for capitalist societies. Thus, for example, classical labour relations, hitherto based on the idea of life-long employment are endangered by new forms of labour, such as the gig economy or the platform economy which, in turn, lead to a new phase in the globalisation process. Whilst classical globalisation meant competition within and between producing countries, this new form of globalisation, thanks to the ever-expansive global possibilities of the internet, “will involve foreign people who are bringing direct international competition on pay and perks into offices and workplaces” (Baldwin, 2019, p. 200). This critical development will, in the long term, also change the face of capitalism.

This Special Issue, therefore, presents a series of papers by leading scholars in two categories, macro- and micro-perspective. Richard De George, in a wide-ranging paper which serves as a type of introduction, engages with both defenders and opponents of capitalism and socialism. The clash of ideologies is, in his view, most clearly demonstrated in the dangerous confrontation between the USA and the Soviet Union during the Cold War as well as in the continuing “Cool War” between the USA and China. De George points to further complications in efforts to arrive at a definitive evaluation of capitalism, socialism, or other systems due to the rapidly evolving nature of things, the world, new conflicts, and inequality at all levels. This compelling heterodox paper ends with a series of conclusions based on the analysis offered in the article.

Valeria Andreoni, Sophia Kuehnlenz, and Imko Meyenburg present a macro-perspective article entitled “Capitalism and Crises: A Comparative Analysis of Mainstream and Heterodox Perceptions and Related Ethical Considerations.” Its main aim is to consider the perceptions of capitalism and related crises from a mainstream and a heterodox perspective. Broadly defined within the neoclassical structure, the mainstream approaches support the idea of the long-term stability of capitalism and describe crises as exogenous events. The heterodox perceptions, on the contrary, perceive crises as an internal feature of capitalism and propose to reframe the global economy within the limits of the socio-environmental systems. By discussing the main perceptions of capitalism and crises and by considering their ethical implications, the paper contributes to the current debate on the stability of capitalism and provides a starting point for an analysis of the feasibility of alternative economic structures.

Paul Oslington, in a macro-perspective paper, entitled “Alasdair MacIntyre and Adam Smith on Markets, Virtues and Ends in a Capitalist Economy” offers a perceptive, reflective analysis of MacIntyre and Smith on markets, virtues and ends in a capitalist economy. Essentially, the article asserts that MacIntyre's ethical framework can be rendered more powerful and useful to business ethicists by incorporating insights from Smith and, in particular, his “account of market virtues and teleological account of markets as extended co-operation directed towards the common good of wealth creation.” Leaving aside the question of interpretation of Smith and MacIntyre, Oslington holds that his analysis opens new pathways for dialogue between business ethicists and economists.

Germán Scalzo, Javier Pinto-Garay, and Martin Schlag, in a macro-perspective article entitled “Whose work? Which markets?: Rethinking work and markets in light of virtue ethics” attempt to find ways by which neo-Aristotelian virtue ethics can be applied to work and markets in today's world. Drawing on Alasdair MacIntyre's philosophy, the paper aims to address the ever-widening gap between good work and markets. In summary, this article attempts to close the gap by drawing on MacIntyre's neo-Aristotelian view of the economic dimension of good work. In particular, it claims that the economic dimension of work can be defined in terms of excellence and virtues. In search of the macro application of their theory and principles, the authors point to MacIntyre's insistence on market practices also being defined in terms of excellence.

Philip Stiles, Eleanor Toye-Scott, and Pradeep Debata in a pertinent macro-perspective paper entitled “Technology, Capitalism, and the Social Contract” tease out the implications of the rise in digital technology and the critical changes to forms of work with implications for worker rights across all levels of society. Unsurprisingly, rapid advances in technology have resulted in calls for a new social contract. Stiles and his co-authors put forward three possible consequences for capitalism and the social contract. We can only hope that the leaders of the industry, the owners of capital, and those elected to govern will at least make some good decisions that favour the just progress of democracy and capitalism for the benefit of workers and the wider society.

Patrick Honohan, in a micro-perspective article entitled “Rules versus Principles for Ethical Market Behaviour,” draws on his own practical experience in the years following the Global Financial Crisis, a decade ago, that witnessed the failure of principles-based financial regulation in favour of a growing trend towards mechanical rules. Honohan argues that both are needed and, whilst acknowledging that regulatory discretion has inherent risks, nonetheless, in view of the growing complexity of products and markets, suggests that what is called for is a tilt in favour of greater discretion to the regulator rather than over-complicated mechanical rules.

Madeleine Fuerst and Christoph Lütge in a micro-perspective paper entitled “The Concept of Organisational Integrity: A Derivation from the Individual Level using a Virtue-based Approach” argue that virtue ethics builds an indispensable framework for understanding the origin of the concept of integrity. The authors transfer these findings to an organisational level. The paper attempts to define and then operationalise organisational integrity. This provides the foundation for future scientific research and a basis for developing practical guidance for organisations and managers.

Anna John, Johan Coetsee, and Patrick Flood, in a micro-perspective paper entitled “Unilever: A New Form of Social Capitalism?”, explore the case of Unilever as one of the leading exponents of sustainability and care for the environment. Their article, in an effort to address a lack of understanding of mechanisms to assist companies to achieve leadership in sustainability and, perhaps more important, to maintain it over time, seeks to address this critical deficiency. Specifically, it aims to unpack the social capitalist mechanism which enables companies to embrace the sustainability ethos.

In the closing article of this special issue, Philipp Bagus, Antonio Sánchez Bayón, and José Antonio Peña Ramos, in a macro-perspective paper entitled “Capitalism, COVID-19 and Lockdowns”, seek to show that capitalist ethics is capable of dealing with the challenges of pandemics and that it comes with important advantages such as the prevention of overreactions. The authors apply both utilitarian and rights-based ethics to the case of epidemics in general and COVID-19 in particular. First, libertarian natural law ethics is used to assess government interventions in the Corona pandemic. Secondly, the authors argue that these interventions cannot be justified from a libertarian point of view despite the possible objections that are discussed such as the “potential threat argument.” Moreover, the utilitarian argument in favour of government lockdowns is evaluated. The negative effects of lockdown on mental health, addictions, domestic violence, etc. are also considered in this article. The authors conclude by stating that the utilitarian argument in favour of lockdowns is far from convincing, as the economic calculation is not possible.