“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 interest.”
– Adam Smith
Capital is many things to many philosophers of economics. In the 18th Century Adam Smith saw it as pretty much anything from which an individual expected to derive revenue. A hundred years later, Karl Marx used it to define capitalism when he said capital is money used to buy something in order to sell it to make a profit. Today, Hollywood in the 1987 film “Wall Street” and later the 2013 reprise “The Wolf of Wall Street” portrays capital and capitalism as intrinsically corrupting and evil. The global media and more than a few governments often take a negative view of the United States as the embodiment of greed-driven capitalism.
There’s more than a bit of truth in each negative.
Take Adam Smith’s skepticism regarding the true motivation of human behavior and combine it with Bishop George Berkeley’s famous phrase “esse est percipi.” What results is that perception, not necessarily fact, is accepted as reality. The perception of capitalism has morphed from “progress” in the 19th and early 20th Centuries to “greed” today.
The United States is a nation built upon the principles of rugged individuals turning nature’s resources – its fish, terrestrial animals, forests, rich arable land, minerals etc. – into revenue and wealth and ultimately global influence. It’s also a nation that other nations, for better or worse, strive to emulate. Critics complain, often correctly, that the exploitation of people and resources involved in the advance of U.S. capitalism was morally and ethically wrong. The genocidal treatment of native Americans, the slaughter of bison and the depletion of whales and cod are obvious examples.
The truth is the quest for wealth drives virtually every societal level. Individuals (even those who publicly and privately denounce the wealthy) covet the fruits of capital and strive to gain wealth. Profit drives every business whether it’s a “mom & pop” delicatessen or a multinational corporation. The same is true for non-profits and religions. Only the term “profit” is exchanged for “revenue” or “income.”
There are plenty of negatives associated with capitalism past and present. True fortunes were built exploiting to near exhaustion natural resources and workers alike. Social activists condemn corporations some justifiably and some hypocritically. They consider themselves holding the moral high ground when condemning corporate heads who pocket multi-million dollar salaries and refuse to pay living minimum wages for laborers. Yet they are silent when non-profit animal and environmental groups pay their leadership seven-figure salaries, raise tens of millions in the name of saving abandoned puppies and the oceans and spend pennies doing nothing but complain. If pointing out what’s wrong with society is the NGO role fine. It’s a noble service. However, it’s only one step in finding solutions to environmental and social problems.
The truth is profits are not evil. They are just excess money. No church, no NGO, no corporation, no private household can exist unless they bring in sufficient income to pay the basic necessities. Whatever is left over and above paying the bills (profit) can either be pocketed by the greedy or used for good.
Tally up the cost of ridding the oceans of floating plastic, of spaying and neutering and treating the ills of tens of millions of dogs and cats, of preserving wild flora and fauna on land and in the water, of devising new ways to replace old detrimental technologies, of developing treatments that counter disease…of providing ways that feed, clothe, educate, and shelter those in need and every one of our families. Where is that money in those vast amounts to come from?
Certainly the churches, many NGOs, governments, corporations, charities, and generous individuals are among the answers. But the truth is only by business enterprises, particularly those that trade globally, can generate sustainable and massive amounts of capital over expenses that can make a real difference in curing the ills that plague the planet and its inhabitants.
Generating profits provides jobs, income, the ability to conduct research and develop innovations that move society forward in every field: food, clothing, shelter, education, health care for humans and animals alike, energy efficient transportation, and charitable giving. Name a field that can’t benefit from a profitable economy.
Profits gained by taking “unfair” advantage of overworked and underpaid employees or from the “selfish” exploitation of a natural resource leaving nothing for future generations builds resentment, hatred, even the very real potential for violence. It’s behavior that’s simply wrong.
Profits gained from corporations that understand and practice ethical capitalism is the answer.
Ethical capitalism? It’s defined as the application of the triple bottom line of economic prosperity, environmental responsibility, and social justice. Provide a product or service that generates sustained revenue; do no harm, in fact, help improve the environment; and insure that every individual regardless of ethnic origin, sex, faith or nationality is treated fairly and with respect and you have ethical capitalism.
The United States was founded on capitalism. Now it must provide leadership in leading the way to spreading the global gospel of ethics, capital, true and applied compassion for others as well as the world in which we live.