The idea of capitalism as a moral system, or the most moral system, is very strange to me. But first, I think it's important to say that what would happen in an actual capitalist economy is hard to say for certain, because it's never happened.

One of three things would have to happen for actual capitalism to occur. They all have to do with government. While government is political and capitalism is economic, all political systems end up distorting whatever economic systems they try to have in place. In my opinion, true, free market capitalism will not occur without either:

One-World government

No Government

All the governments of the world scrapping all regulation of trade, and internal regulation of markets.

Obviously condition 1 is not going to happen, and even if it did who's to say that government would actually give a shit about capitalism. The other two options are also pretty unlikely. Capitalism, at least pure capitalism, is not going to happen.

But is this bad? I don't blame the governments for not caring about capitalism, because capitalism does not care about them, or us. It doesn't care about anyone. Economic systems are at their heart amoral - the government’s application and manipulation of these economic systems is what would truly determine any systems morality.

Let’s look at the United States. Probably the closest thing to a capitalist economy in the world today, but that doesn't keep the state from seriously distorting the markets. Some examples:

Patents and copyrights (these, sadly, have nothing to do with capitalism)
Fiat money and a monopoly on the printing and issuing of money.
Corporations as legal entities, equivalent to a person
Eminent Domain
Trade embargos, tariffs, and subsidies of domestic products (especially farming)
Income Tax
Favorable tax status or other business incentives

My favorite one on this list, and one I've been thinking about a lot, is Corporations as legal entities. This has been the norm in this country for about 100 years, and thanks to the golden state of Delaware the rules and costs of incorporation are...lax, at best. But what kind of effect would this have on capitalism? Capitalism is besotted with non-market problems referred to as "externalities". Pollution is the most common and recognizable market externality, often referred to as part of the "Tragedy of the commons". No one owns it, so no one wants to pay to keep it clean. How this relates to corporations as legal entities is that most people do not make a significant amount of money through pollution, but some corporations can and do. While the government makes some efforts to regulate or internalize the externalities through pollution payments and the like, for the most part even if the Corporation violates these rules, only the corporation is liable, not the people who actually made the decisions, as the corporation is a legal entity.

I make no claims that this is the wrong way to do things, or that this is somehow immoral. But the next time you think to complain about political correctness or people not taking responsibility for their actions, think about whom else in this country doesn't take responsibility.

A lot of these problems are fixable; a few are not. Either way this says almost nothing about the overall morality of any system. How can socialism be less moral than capitalism, as it is practiced here? How much of the redistributed wealth was earned only because of government regulations or rule in someone’s favor? Who's to say? There is a pretty strong argument for "poor people are bad for the economy and for society". Does capitalism in its purest form solve these problems? I haven't seen it. That doesn't, of course, make Socialism right, or any kind of redistribution of wealth (even if the wealth was just printed by the government anyway...). But it doesn't make either system, or any system (federalism, communism, I don't care) less or more "Moral".



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