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Moral Capitalism

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Moral Capitalism

Reconciling Private Interest with the Public Good

Berrett-Koehler,

15 min read
10 take-aways
Audio & text

What's inside?

What choices face ethical capitalists? For instance, do firms owe moral allegiance to shareholders or to all of us?

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Editorial Rating

7

Qualities

  • Controversial
  • Comprehensive
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Recommendation

The corporate scandals of recent years have led to much hand wringing about corporate values. Now comes Stephen Young, head of the Caux Round Table - an international network of executives focused on corporate responsibility - with simple rules for turning the hand wringing into action. Some of Young’s advice seems to be common sense: Tell the truth, for instance, and follow the law. By encouraging capitalists to go beyond following the letter of the law, Young offers a useful guide to ethical decision making. At times, though, he seems to give capitalists a free pass. For instance, Young argues that moral capitalists have little responsibility to withhold harmful products such as cigarettes and liquor from consumers who want to buy them. getAbstract.com recommends this easy-to-digest study to anyone intrigued by the ethical implications of capitalism. The book is a useful presentation of the argument that capitalism, the most powerful economic system in history, must balance might and right.

Summary

The Capitalist Conundrum: Brutality or Morality?

In recent years, extremists have hijacked capitalism with the belief that a business person’s job is to make money at any cost. Devotees of libertarian novelist Ayn Rand embrace this form of brute capitalism or Social Darwinism. Brute capitalists argue that profits reign supreme, and that the needs of customers, suppliers, investors and the public-at-large shouldn’t interfere with a capitalist’s pursuit of those profits.

Gordon Gekko, the villain of the 1980s movie Wall Street, embodied brute capitalism when he declared, "Greed is good." He overstated the case. Free markets are good, and the pursuit of profits is honorable, but when self-interest is placed above the public interest, everyone suffers. In free markets, everyone depends on the honorable actions of others. To use a simplistic example, the bread maker and his customer need each other. The bread maker needs to earn a living, and the customer needs to eat. As long as their goals overlap, they’ll enjoy a fruitful relationship. But if the baker raises prices unfairly, or skimps on quality, the customer will take his business elsewhere. This sort of mutual interest...

About the Author

Stephen Young is global executive director of the Caux Round Table and president of Winthrop Consulting and the Minnesota Public Policy Forum. He attended Harvard Law School and is a former assistant dean of the school. He attended high school in Thailand and is an expert on East Asia.

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