On Morality

“Under capitalism, man exploits man. Under communism, it’s just the opposite.” – John Kenneth Galbraith
In any lengthy debate of communism versus capitalism, both systems are often accused of being inherently immoral.  Capitalism is said to encourage people to act entirely in their own self-interest, while communism is said to lead to oligarchy and tyranny. However, when either ideology fails in practice, loyal proponents blame not the instability of the economic structures, but the unethical behavior of the players.  Capitalism and communism both ultimately depend on their participants adhering to an implicit moral code. In this post, I will discuss how the ethical requirements of both systems are not all that different. Then I will address the question: if both are contingent on a moral society, what framework can we turn to in an immoral world?
To begin, let us explore the assumptions that capitalism makes about the morality of its constituents. Despite the popular notion that the free market thrives on greed, the reality is quite the opposite. Avaricious practices may benefit an individual, but such behavior on a large scale is severely detrimental to the capitalistic society.
The most obvious example in recent times is the financial crisis of 2008, which led to the recession. To summarize a highly complex disaster in two sentences: low-income Americans took out high-interest mortgages from banks, who sold those mortgages to larger investment banks, who packaged and traded them to other investment groups, who created convoluted ways to speculate on whether those packages would increase or decrease in value, which depended on whether the original mortgages were paid back. Then, when a large percentage of mortgages were not paid back on time, the effects ricocheted through the economy*.
Pundits continue to argue over whether to blame the irresponsibility of the low-income expensive house buyers, the predatory nature of the loaners, or the narrow-minded greed of the investment banks. Though the left and the right have very different perspectives on the issue, they both argue that the system broke down because one or multiple parties did not fulfill their moral obligations. NYT columnist David Brooks describes the ethical failure of Wall Street executives in his recent post:
“[On Wall Street, the] language of meritocracy (how to succeed) has eclipsed the language of morality (how to be virtuous). Wall Street firms, for example, now hire on the basis of youth and brains, not experience and character. Most of their problems can be traced to this.”

Brooks and others argue for a shift in social ideals back to the glory days when “the best of the WASP elites had a stewardship mentality, that they were temporary caretakers of institutions that would span generations”. This sense of responsibility seems to have faded over the years, replaced by a sense of entitlement. As seen throughout the troubling economic times of the past few years, capitalism simply cannot function when the moral code is crossed out with golden ink. As early as 1919, John Maynard Keynes recognized the ethical prerequisites for a flourishing free market:

“Herein lay, in fact, the main justification of the capitalist system. If the rich had spent their new wealth on their own enjoyments, the world would long ago have found such a régime intolerable. But like bees they saved and accumulated, not less to the advantage of the whole community because they themselves held narrower ends in prospect . . . The capitalist classes were allowed to call the best part of the cake theirs and were theoretically free to consume it, on the tacit underlying condition that they consumed very little of it in practice. The duty of ‘saving’ became nine-tenths of virtue and the growth of the cake the object of true religion.” – The Economic Consequences of Peace (Section III, Chapter 2)

Keynes expected the privileged to reinvest their wealth in the economy, out of respect and consideration for the working class. This necessary conscientiousness is fundamental not only to the free market, but also to the communist philosophy. Leaders especially, who task themselves with the ambitious goal of maintaining socioeconomic equality, must be steadily selfless and focused on the good of their nation as a whole. This is easier said than done, and as history has shown time and again, any trace of immorality in a communist administration is a sure sign that their regime is damned.

Rather than being greedy in the traditional, monetary sense, socialist leaders are often tempted by the allure of absolute power. In 1873, long before the failures of communism in the Soviet Union, Mao’s China, Cuba, North Korea, and elsewhere, the Russian philosopher Mikhail Bakunin recognized that communism would lead to some form of tyranny:

“This fiction of a pseudo-representative government serves to conceal the domination of the masses by a handful of privileged elite; an elite elected by hordes of people who are rounded up and do not know for whom or for what they vote… Let us ask, if the proletariat is to be the ruling class, over whom is it to rule? In short, there will remain another proletariat which will be subdued to this new rule, to this new state.” – Critique of the Marxist Theory of State

Bakunin and others respond to the inevitability of dictatorship by advocating for libertarianism. However, in terms of morality, libertarian socialism and similar systems are even more ambitious, expecting not just the leaders, but every citizen to shed all personal aspirations and be wholly dedicated to the greater good. Those on the far left who advocate for such a government remind us that human nature is not fixed; while today’s society might not be ready for libertarian socialism, a moral revolution could prepare future generations for a transition away from the greed and parsimony of our capitalistic civilization.

This assumption — that leaders can effect a change in the moral sentiments of the masses — is fundamental to the arguments of the left and right. Conservatives argue that if the wealthy elite were made to be less greedy, the free market would function in a fair and humane way. Meanwhile, leftists argue that if the political elite of a communist nation were made to be less power-hungry, a planned economy would be just and prosperous. Both sides demand a higher standard of ethics and insist that the primary obstacle to their ideal economies is a lack of humanitarianism.

The discouraging conclusion from examining these arguments in parallel is that our society on the whole is fraught with immorality. What framework, then, should we turn to so that we may all prosper in these sinful times? Should we regulate? Deregulate? Move to the right? To the left? I’m afraid the answer is none of the above. The problems we face are deeper than economics. Before we can have any real conversation about capitalism and communism, we need to talk about morality. We need to ensure that ethics will endure by communicating their importance to each other and future generations. We need to realize that it is neither capitalism nor communism that is inherently immoral; it’s us.
*For more on the financial crisis, I recommend watching Inside Job and reading The Big Short by Michael Lewis.
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2 Responses to On Morality

  1. To have a conversation about communism is to have a conversation about morality. While capitalism is ambivalent about morality (in rare situations, surplus value can be managed in such a way that it is not stolen from its producer and in turn doesn’t lead to massive inequalities), communism is not. Allowing producers of a good to have control over the distribution of that good and the circumstances by which it is produced is not immoral. In fact, ensuring that surplus value is not extracted from said producer is undoubtedly moral.

    Communism was not the economic and political system of the Soviet Union (Chomsky discusses in the link at the bottom how the words socialism and communism were distorted by both the Soviet Union and the United States, to the benefit of both countries). The existence of a vanguard party which wields authority over a party or population, something which desperate leftists see as the only reasonable path to communism, is not and never will be a facet of true communism. The Coming Insurrection talks a good deal about why leftists cannot allow their enemies to continue to distort the definition of true communism (“Certain words are like battlegrounds: their meaning, revolutionary or reactionary, is a victory, to be torn from the jaws of struggle”). Before we have conversations about communism, it’s important to make the distinction between authoritarian regimes which pose as communists and libertarian socialism (which I claim to be the true form of communism).

    Here’s the Chomsky link: http://www.youtube.com/watch?v=yQsceZ9skQI

    • Tom Silver says:

      Thanks for reading! I completely agree that communism and morality are inextricably linked. I also agree with your assertion “Allowing producers of a good… is not immoral”. I also tried to make the distinction between authoritarian communist regimes and libertarian socialism in this post (“However, in terms of morality, libertarian socialism and similar systems are even more ambitious…”), but perhaps I could have spent more time on libertarian socialism.

      Regardless, we seem to be in agreement that for communism to be successful, its leaders must be focused on morality. The point where we diverge — and Josh and I have debated this point at some length — is whether or not capitalism depends on morality. As you mentioned, unregulated free market practices can lead to massive inequalities. However, if those at the top were never greedy and were always thinking of the good of their country, they would reinvest their wealth in their companies, raise their workers’ wages, and effectively minimize the gap between classes. Of course, we can’t expect all people to behave so responsibly 100% of the time. But these ideal moral expectations are no more ambitious than the ones of libertarian socialism.

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