Capitalism and morality

[PETRUS]

Dean Baker writes in his blog today:

The Washington Post had a major column by Steve Pearlstein on the front page of its Outlook section headlined, "Is Capitalism Moral?" The piece notes the sharp upward redistribution of income over the last three decades and asks whether we should just being willing to accept market outcomes.

Of course this question is absurd on its face. The upward redistribution of the last three decades was the result of deliberate government policies designed to redistribute income upward; it was not the natural workings of the market.

For example, trade policy was quite explicitly intended to place segments of the U.S. workforce in direct competition with low paid workers in Mexico, China and other developing countries. The predicted and actual result of this policy has been to push down the wages the bottom 50-70 percent of the workforce to the benefit of those at the top.

This was hardly the free market. We could have adopted trade policies that were designed to put doctors, lawyers and other highly paid professionals in direct competition with their much lower paid counterparts in the developing world. If we had done this, doctors in the U.S. might be earning closer to $100,000 a year rather than the current average of more than $250,000 annually. This would transfer more than $100 billion annually to the rest of the country in the form of lower health care costs...

(Read more: http://www.cepr.net/index.php/blogs/beat-the-press/capitalism-steven-pearlstein-and-morality)

He continues, and touches on some other policies that redistribute wealth upwards, e.g. longer patent and copyright terms, an NLRB biased in favor of employers, too big to fail banks, and budgetary decisions.

[chervilant]

1. AND

Tort reform, 401k's, computerized stock trading (which I contend artificially inflates stock values), and a whole host of other mendacious, hedonistic policies.

[L0oniX]

2. ...

[liberal_at_heart]

3. very effective illustration.

[moondust]

4. I seldom disagree with Dean.

Last edited Sun Mar 17, 2013, 04:44 PM - Edit history (1)

But I disagree somewhat with this:

The upward redistribution of the last three decades was the result of deliberate government policies designed to redistribute income upward; it was not the natural workings of the market.

I'd say the great "upward redistribution" has been largely the result of financialization and globalization of the economy, the latter owing to advances in transportation and communications making it relatively cheap and easy to locate facilities overseas and ship products to market anywhere on the globe. Finding the cheapest labor and the most profitable market for products is what aggressive global capitalists will naturally do lacking anything to restrain them.

The role that government did play in it was to not restrain them or demand protections for labor or the environment. Of course trade agreements made things that much worse, but lacking restraint it probably would have happened even without the trade agreements.

tl;dr: Dean is saying it's because of what the government did and I would say it's more because of what the government didn't do.

[freshwest]

5. I agree with your post, not the libertarianism of the article.

[libtodeath]

6. Capitalism is the enemy of morality and compassion

it exists on greed and nothing else.

Socialism is the answer but until we the people can get power away from those with wealth it will not happen.