Let me
first of all draw attention to the words of a remarkable economist and moral
philosopher, so I can fetch more insights from his arsenal of thoughts and
imperishable wisdom? Adam Smith wrote and I quote
“As every individual…endeavour as much as he can
both to employ his capital in the support of the domestic industry, and so
direct that industry that its produce may be of the greatest value; every
individual necessarily labours to render the annual revenue of the society as
great as he can. He generally, indeed, neither intends to promote the public
interest, nor knows how much he is promoting it. By preferring the support of
domestic to that foreign industry, he intends only his own security; and by
directing that industry in such a manner as its produce may be of the greatest
value, he intends only his own gain, and he is in this, as in many other cases,
led by an invisible hand to promote an end which was no part of his intention.
Nor is it always worse for the society that it was no part of it. By pursuing
his own interest he frequently promotes that of the society more effectually
than when he really intends to promote it. I have never known much good done by
those who affected to trade for the public good.”
Confidently we can refer a butcher, brewer,
tele-communication provider and the baker as industrialists or entrepreneurs.
But for the sake of this discuss I would prefer to refer to them as
capitalists. The subject of discuss is that it is not from the goodwill of these
capitalists that the public expects its means of livelihood and sustenance but,
from the regards of these capitalists to their own personal interest. To
query the morality of this sentence is akin to querying the morality of
capitalism.
Certainly the principal aim of every investor is
to make maximum profit, therefore, he has to decipher and work out how to
either train or find quality workers who will produce durable product; he must
discover to cut cost so as to make affordable products; he has to develop
strategies to market and distribute his product so it can reach as many
potential buyers as possible, he sure must also figure out ways to finance his
business so it can successfully meet up with future growth. All of these
largely depend on the mind of the businessman, and are mostly powered by his
quest for security and personal interest which practically isn’t immoral as
long as he doesn’t violate the laws of justice.
The aggregate product of the dedication of the
capitalist to thoughts, persuasion, and strategic reasoning is the virtue that
our lives and prosperity depends on. In other words, it is truthful that it is
not from the benevolence of the capitalist that others expect goods or services
but from the regard of the capitalist to his own interest which in another
sense is also a demand for product or service by consumers. This is the moral
meaning of the law of supply and demand. It should be noted that producers make
bigger than life losses when the demand of the consumers are not adequately
met, thereby leading to consumers looking for alternatives. The demand of the
consumers is also the interest of the producers. For what reason under the sun
will a baker bake bread that consumers won’t and never consume?
In a free market system everyone is morally compelled
by his own ambition to achieve personal goals. The market system advocates
that no one demands the labour and wealth of another without willing to offer
or trade something valuable as an exchange. If any party to the trade doesn’t
gain or achieve anything in return, in terms of product, goods, or service;
that will be immoral.
The rule of capitalism according to Adam Smith is
that trade occurs by mutual consent and to mutual advantage. It has been
observed that the most important recipe for building and advancing the human
society isn’t out-rightly love like we religiously say, or even friendship,
rather mutual benefits and team work.
The sole aim for production is for consumption.
This is a sort of exchange between the producer and the consumer, people engage
in exchange simply because they desire what others have that they don’t
possess. Exchange is achieved without coercion; rather it is built within the
structure of justice and morality. The baker must bake the bread that suits its
patron else they won’t come back and every business person knows that his
continuous profit lies in his ability not just to make customers, but also in
his canny ability to make them come back again and again else, he won’t be long
in business.
“Though the earth, and all inferior creatures, be
common to all men, yet every man has a property in his own person: this nobody
has any right to but himself. The labour of his body, and the works of his
hands, we may say, are properly his. Whatsoever then he removes out of the state
that nature hath provided, and left it in, he hath mixed his labour with, and
joined to it something that is his own, and thereby makes it his property.”
By critically analyzing the words of John Locke,
an ace philosopher, it becomes clear without any iota of doubt that nobody has
all the rights to himself. In the same way a producer has the right to reason
logically and then produce, but whose right is it to endlessly depend on aid or
the benevolence acts of others like many African nations do? No man or state
gains independence of any sort by always depending on others. To tell the
truth, to depend on the benevolence act of others is to shortchange oneself
from personally creating unlimited wealth. Or with what prism of morality are
we going to justify that some should get something for nothing? That would be a
gross act of injustice and also the peak of immorality.
When we erroneously misconstrue the chase of a
man’s interest or goal to produce and become wealthy with “selfishness”, then
we become dishonest. There is little or no reason to think so and many reasons
to think not. Though we may rightly say that the primary purpose of those in
markets is to make profit which in itself is a purpose of self, didn’t even the
great law of Christianity say a man should only love his neighbour the measure
he loves himself. In spite of that, is it practically possible for anyone in
business to achieve this so called “self interest”; without meeting the needs
and interest of others, either by providing goods (be it bread, meat, gas or
wine) or services, without employing workers thereby creating wealth and
alienating poverty? Come to think of it, besides that Bill Gate’s utmost goal
was to put goods and accessible computers on the tables of many made him one of
the world’s richest that also engendered him to give massively to the interest
of the underprivileged-who probably were not a part of his initial goal. What
can be more moral? Just as two blind men can’t help themselves, the same, two
waiters of benevolence act can’t.
Capitalism is a market system based on moral
philosophy and justification. Capitalism supports the universal law of sowing
and reaping. It is not morally wrong to put your money where your mouth is, or
to have dreams that provide the needs of others and pursue it for the sake of
personal interest that no one else can properly attend to. No one feels the
pain of another except for the bearer of the pain. It would be rather ruthless
to reap where one did not sow.
Extract from The Wisdom of Adam Smith, Benjamin Rogge (Ed) 1976. Indianapolis: Liberty Fund.
Rand, Ayn. What Is Capitalism? In Capitalism: The Unknown Ideal (1966). New York. Signet (Accessed from the IPN’s Ideas For A Free Society CD).
Rogge, Benjamin A. (Ed) 1976. Monopoly versus Free Trade {by Adam Smith}. In The Wisdom of Adam Smith. Indianapolis: Liberty Fund. 129-142.
An interview with Adam Smith Professor Edwin West (1922 – 2003).
Twenty Myths about Markets by Tom Palmer, Senior fellow Cato Institute. Delivered at conference on The Institutional Framework for Freedom in Africa, 2007 Regional Meeting, Mont Pelerine Society , Nairobi, Kenya. (Accessed from the IPN’s Ideas For A Free Society CD).
Two Treatises of Government (1824 ed.) (Accessed from the IPN’s Ideas For A Free Society CD).
Wikipedia. www.wikipedia.com/capitalism.
The Moral Basis of Capitalismby Robert W. Tracinski. www.capitalismcentre.org
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