Detoxifying the market

Being rich is not enough. Capitalism may have enriched many and lifted millions out of abject poverty. It may have won the battle against Communism. But that is not good enough.

For, has not the Bible said, "What shall it profit a man if he gain the whole world, but lose his own soul?" This book is an attempt to prove that capitalism does indeed have a soul, and an uplifting moral one.

The book is a collection of essays divided into four parts"""The Ethics of Exchange," "Morality in Commerce and the Corporation," "the Immorality of State Intervention," and "Religion and Markets."

Parth J Shah summarises, explains, and expounds on the ideas in the essays in an excellent overview. Gurcharan Das' "Foreword" puts forward a cogent argument why morality is essential for business""if businessmen lie and cheat, or make defective products, they would soon be left without customers or suppliers. It is in the self-interest of businessmen, therefore, to be moral.

The same holds true for taking care of employees, building team spirit, a relationship of trust with suppliers, and serving customers with a smile""all these morally upright strategies could boost one's bottomline.

The essays fall into two categories""those that take a stridently libertarian stance, ranting against the state or against income redistribution, and the other more mainstream articles.

Walter E Williams' piece argues that "even if free enterprise were not more efficient than other forms of human organisation, it is morally superior because it is rooted in voluntary relationships rather than force or coercion, and it respects the sanctity of the individual." Murray N Rothbard waxes lyrical"""A society built on libertarian foundations is a society marked by peace, harmony, liberty, maximum utility for all and progressive improvement in living standards."

D McCloskey laments the widespread distrust of the bourgeois virtues, Jeffrey Tucker says that antitrust laws are "a prime example of institutionalised envy and theft", while James A Dorn's article is provocatively titled, "The Rise of Government and the decline of Morality."

There are a clutch of articles on corporate social responsibility, with Milton Friedman's classic with the self-explanatory title, "The Social Responsibility of Business is to Increase its Profits" setting the tone.

Not all the essays espouse libertarian theology, however. Amartya Sen's piece, as expected, is far more nuanced. For instance, he says: "Market outcomes are massively influenced by public policies in education, epidemiology, land reform, micro credit facilities, appropriate legal protections, etc. and in each of these fields there is work to be done through public action that can radically alter the outcome of local and global economic relations."

Brian Griffiths casts considerable doubt on the exaltation of self-interest as a moral principle, citing C S Lewis on the difference between a man who thinks honesty is the best policy and an honest man. He says that self-interest as a moral standard will always led to a "a temptation to trim, to conceal and to mislead", descriptions which precisely fit the recent behaviour of many well-known US corporations and banks.

Lavoie and Chamlee-Wright point out that "if the world approximates the perfect competition model, there is little reason to even discuss the issue of moral decision-making because managers and business owners have no margin of discretion."

The real trouble with markets is not that they are immoral, but that they are amoral. The market is an instrument that helps to allocate resources, and act as a signalling mechanism. How this instrument is used depends on society.

The complaint against markets is a complaint against their amorality, the tendency to reduce all human relations to those of monetary arithmetic, or to treat everything as a commodity. Becoming someone who can sell himself at the highest price in the labour market can hardly be an ethical ideal.

Moreover, the attraction of markets lies in people being able to use them to their advantage, a fact that doesn't hold true for millions of people, especially in the poor countries.

How do we then ensure more morality in the marketplace? Perhaps Keynes had the answer when he said, "When the accumulation of wealth is no longer of high social importance, there will be great changes in the code of morals.

We shall be able to rid ourselves of many of the pseudo-moral principles which have hag-ridden us for two hundred years, by which we have exalted some of the most distasteful of human qualities into the position of the highest virtues. We shall be able to afford to dare to assess the money-motive at its true value.

The love of money as a possession""as distinguished from the love of money as a means to the enjoyments and realities of life""will be recognised for what it is, a somewhat disgusting morbidity, one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease ... But beware!

The time for all this is not yet. For at least another hundred years we must pretend to ourselves and to everyone that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still. For only they can lead us out of the tunnel of economic necessity into daylight."

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MORALITY OF MARKETS
Parth J Shah (ed)
Academic Foundation in Association with Centre for Civil Society, New Delhi
Pages: 355, Price: Rs 595