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Aristotle is the great, great grandfather of modern economic theory. He was the first to raise the important question of whether or not economic markets were moral, amoral or immoral. Aristotle came to the conclusion that markets should be moral. In his book Politics, Aristotle argues that markets should be used for the good of man. Items should not be traded just because they bring you wealth, but because they benefit society and individuals. If you happen to become wealthy in the progress, there’s nothing wrong with that, as long as you do it by a moral means.
If Aristotle was the great, great grandfather of modern economic theory, Adam Smith would be the midwife. Smith, too, believed that those participating in the markets should use morality as a guiding principle to producing, buying and selling of goods.
The Issue: Aristotle and Smith would be in shock at the result of culture today if they saw how we waste natural resources that don’t need to be wasted. They would be appalled to see that we reward companies that waste natural resources and punish those that attempt to move us forward in conserving non-replenishable resources.
Why do we continue to build cars that get 20 miles to the gallon when we have the technology to build cars that get 40+ miles to the gallon?
The bigger question is why are we not rewarding companies that do attempt to move us to more fuel efficient vehicles? Even more important, why are we not rewarding companies that are attempting to move us completely off fossil fuels and attempting to build vehicles that use alternative, renewable, and clean energy sources?
In a truly capitalist society that Smith had envisioned, we would not be digging for coal to fuel the generators that allow us to plug in our televisions to see who is going to get voted off the island this week.
The Solution: We need to stop rewarding corporations that refuse to be innovative and good stewards of the market. We need to start giving tax bonuses to corporations that promote good stewardship and produce innovative and resource saving products.
The Issue: Globalization has opened the market to third world and emerging countries. Treaties, the like the North American Free Trade Agreement, have greatly increased US imports that have provided quality goods at affordable prices.
The side effects of free trade has been the off shoring of US jobs, exploitation of third world and emerging country workers, and corporations moving their manufacturing jobs where they can take advantage of lax environmental laws.
The Solution: We need to end free trade agreements (free is a misnomer, these agreements come with a heavy price) and implement fair trade agreements. We need to support economies (including our own) that do not exploit their workers, but rather economies that pay a livable minimum wage, promote safe working environments, take efforts to protect natural resources and protect the environment from dangerous pollutants. Workers, also, need to be allowed to organize and bargain for quality health care, fair pay and healthy working environments – both physically and mentally. These are the economies we as a nation need to do business with.
The Issue: Corporate lobbyists have managed to convince government officials that corporations are entitled to the same rights as people. Too often, lawmakers from both parties have allowed corporations and their lobbyists to draft and outline bills that eventually become law. These laws are often designed to not just maintain the status-quo, but often used to tilt the playing field to their advantage.
When they hedge bad bets, they are often deemed too big to fail and require tax payer money to not only cover their losses, but to line their own pockets and pad their profit line for shareholders.
The Solution: In a truly capitalist society, the playing field would be even, thus allowing entrepreneurs to create small businesses without the fear of large corporations using their money and government influence to stifle creative competition. It’s not just competition that creates innovation, it’s competition on an even playing field. Nothing creates innovation more than competition where corporations aren’t allowed to protect themselves by regulating small enterprises while deregulating in their own self interest.
In a multi-trillion dollar economy, no corporation should be allowed to grow to the point of too big to fail. No corporate entity should be allowed to control more than 15% of their market share in a given industry. No corporation (like cable or electric companies,) should have a monopoly on any one set of customers. If you only have one choice, then you really have no choice at all (where I live I have more choices about who picks up my garbage than I do about who supplies my electricity or cable). If we are only to be given one choice, then it needs to be a state run choice that is non-profit with government oversite.
The Issue: Corporations argue that they should be limited in the amount of damages they can be sued for under the guise of protecting the economy. By limiting their liability they are allowed to protect themselves from bad business decisions and unroot the most basic principles of capitalism. By removing the risk of making bad decisions, they are rewarded for not looking out after their company and shareholders interests. Corporations, also, argue that they should be treated to lower taxes due to their risk taking, yet they always seem to find ways to negate that risk while further moving their tax rates.
The Solution: We either need to remove caps for liability in lawsuits, or for those that we deem to deserve such protections should be taxed at a higher rate for such protection with monies placed into a fund to protect against any future damages to loss of life, property or environment. If you are willing to make a high-risk bet, then you better being willing to pay if that bet doesn’t payoff.
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