Does Capitalism contain a policy of morality or honesty?
Posted in the Woodlawn Forum
#1 Nov 11, 2013
Does Capitalism contain a policy of morality or honesty?Capitalism is an economic system, utilised by the business sector, so it is not possible to say it contains any written policy. Policies are adopted by individuals, corporations or government, not by a system.
Perhaps you mean do capitalists adhere to the principles of morality and honesty in their dealings or whether there are Government Regulations which demand morality and honesty in a capitalist system? The answer is 'yes' to both.
Although, there is no written or stated "policy" of this nature, common sense dictates that customers expect to be dealt with fairly and honestly, if a business is to succeed. Those which do not deal with customers in a fair and equitable manner, eventually fall over and fail, so that is why we say that capitalism is "self-regulatory". Wherever possible, Governments endeavour not to over-regulate so as not to influence market forces,(the effect consumers and competitors have on the market and supply and demand), because market forces automatically and effectively dictate the necessary standards to keep businesses and corporations honest.
There are various Regulations requiring registration, annual reporting, accounting rules, etc., even if these are primarily designed to ensure taxes are paid.
There is also comprehensive legislation covered by various Trade Practices Statutes, which protect consumers from unprincipled business operators.
The credit crisis - the ultimate failure of the financial sector, which controls credit - occurred due to a lack of morality and honesty by bankers and they consequently failed. So you see the free market forces will always prevail and did in this case - resoundingly ! Therefore, morality and honesty do not need to be framed in any policy - they will always eventually prevail of their own accord.
The reason that credit was allowed to run unchecked for so long, before hitting "crisis" point, was a direct result of Govt. inteference. Had the free market been permitted to run freely, the crisis would have hit sooner, with lesser consequences and righted itself with less pain. It is an imperative not to over-regulate and upset the balance of natural "supply and demand", directly controlled by market forces. The power of market forces does always eventually "catch up" with corrupt and dodgey operaters - even if sometimes not as soon as we would like. In this way market forces automatically keep the system moral and honest.
Most business owners adopt a policy of moral ethics in their dealings with customers. They know that if they didn't, customers wouldn't return with repeat busines and would go to a competitor. Subsequently, the business or corporation would lose its client base and thereby lose income, if not ultimately fail - another way of saying market forces at work.
#2 Nov 11, 2013
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