Last week was interesting for me. UK’s politics suddenly fuelled with debate on ‘responsible’ or ‘popular’ capitalism; the former being raised by Labour chief Ed Miliband, while the later came out from the PM’s very own statement. Both argued for a more sensible form or capitalism, or as @BBCBusiness puts it ‘moral capitalism’. Odd that they finally came to an agreement of sort.
In the same week, FT published an article by Prof. Jeffrey Sachs, of Columbia University, entitled Self Interest, without morals, leads to Capitalism Self Destruction. He too argued that capitalism is in danger of losing its credibility, as demonstrated by Eurozone crisis to social movement in Wall Street, and now is the time to take radical actions.
Moral is not new to Capitalism, at least in the form envisioned by Adam Smith. In fact ‘moral’ predates and part of the ‘self interest’ and ‘invisible hand’ concepts developed by Smith in the 18th century. Smith’s Theory of Moral Sentiments was not only his earlier and more superior work, but also laid a foundation for the operational efficiency of a self-interest servicing market he advocated in more famous Wealth of Nations.
In the work, Smith critically examines the moral thinking of his time, and suggests that conscience arises from social relationships. His goal in writing the work was to explain the source of mankind’s ability to form moral judgements, in spite of man’s natural inclinations towards self-interest. Smith proposes a theory of sympathy, in which the act of observing others makes people aware of themselves and the morality of their own behaviour.
The quote from Wikipedia above is an opposite and far cry from what is practicing by many ‘champions’ of Capitalism. These are the people who benefitting more from the supremacy of capital than most of the people. The 1% group, in the jargon of Occupy Wall Street activists, or ‘the super class’ that dominates political and economic powers, have shown no sympathy towards the ‘underclass’ and the squeezed-in-between middle class. They live a life far different from the majority of us; who everyday have to deal with job cuts, increasing health bills, expensive children education or difficulty in paying taxes.
The Telegraph recently runs an article on the Overclass in the United States and UK, portraying growing exclusivity of the super rich. This article is partly based on the new book by an American Sociologist Charles Murray, Coming Apart.
Murray exposes how the new United States upper class, which he labels a “cognitive elite”, has developed an hereditary stranglehold over the top professions and management positions. The brightest people tend to marry each other, then ensure that their offspring get to the best schools and universities, with the result that, to quote Murray: “The parents of the upper-middle class now produce a disproportionate number of the smartest children.”
Their exclusivity doesn’t stop there, they even live in the same enclave.
These gilded families then inter-marry and socialize together, living in the same areas, creating a phenomenon which Murray labels “super zips” – the 800-plus richest and most desirable postal codes in the United States, where the cleverest and richest congregate.
This of course has nothing to do with moral, as it is perfectly humane for people of the same likelihood, common interests or background to come and live together. However, their lack of sympathy – in the word of Moral Sentiments, is what troubling and creating the dissatisfaction among the masses. The case of hefty bonuses for senior bankers, minutes after their banks rescued with public money, is what being resented. Hence the issue of moral.
Occupy Wall Street and other social movements in the developed world is an antithesis of current practices of capitalism. People in the streets want a change, a radical one. And the fact that now politicians and mainstream media are covering it more prominently, means that the voice is now being heard. Whether it will change the practice, or capitalism itself for that matter, is another issue.
Perhaps only time will tell.
Originally published on luqyantamanni.wordpress.com, January 22, 2012: view original.
