Capitalism and Ethical Life

rutherfordIn the park across the road the boys hang out on the benches. Throughout the day and long into the night, when the call comes in one will cycle off up the road and return with the small wrap. It’s a just in time, overheads free, networked, post post-fordist economy of primitive accumulation. A life selling crack or heroin is stripped down to exchange, profit, conspicuous consumption. It’s a quick but dangerous route up the status seeking ladder of respect and a short cut for the excluded to the capitalist good life. Demand is inelastic and insatiable. Drug taking is driven by the two impulses that propel consumerism: desire freed from obligation to others, and the never to be satisfied search for peace of mind.

As Max Weber describes it, the impersonal, economically rational relations of business follow their ‘own objectified laws’. ((Löwy, Michael (1998), ‘Catholic Ethics and that the Spirit of Capitalism’, Instituto de Estudos Avancados da Universidade de Sao Paulo, The drugs trade is their purest expression. In this park on an autumn evening a market operates in the to-ing and fro-ing of the bike and the coming and going of strangers. At its centre is the absence of law and morality. What holds together its relations of exchange is the threat of violence. It is an economy without ethics and in this respect it exemplifies in extremis the neo liberal model of capitalism that has transformed the social order in Britain over the last three decades.

An Economy without Ethics

The historic crisis of Britain’s old model of mass industrial production and the systemic failure of capital accumulation in the 1960s provided an opportunity for the right to establish a new hegemony. The 1979 Conservative government of Margaret Thatcher engineered the deregulation and restructuring of the economy , opening it up to the rapidly growing global financial markets. Its hegemony was secured by the sale of council housing and the promise of a property owning democracy. A new kind of popular compact between the individual and the market aligned the economic interests of individuals with the profit-seeking of financialised capitalism. Its individual market nexus displaced the old social welfare contract and provided a foundational structure for the new liberal market society of consumers. Change was facilitated by a state that was itself being privatised, outsourced and marketised. Where the nation state had taken a moral responsibility for the welfare of its citizens, this new kind of market state promised them instead the economic opportunity to take care of themselves.

In Britain’s low wage, low skill economy of limited opportunities, individual aspiration and economic growth were both driven by consumerism and sustained by the cheap credit of a dominant financial sector. The housing market became the epicentre of a casino economy that turned homes into assets for leveraging ever-increasing levels of borrowing. The lives of millions were integrated into the global financial markets as their savings, pensions and personal and mortgage-backed debt were expropriated by financial capital. A similar compact between the business elite and shareholder value engineered a massive transfer of wealth to the rich and became the unquestioned business model of the period.

The neo-liberal compact not only accelerated the redistribution of wealth from labour to capital; it has been central to the modernisation of capitalism in its new phase of technological development. In the financial, knowledge and cultural sectors of the economy, new practices of capital accumulation co-opted the values of the 1960s counter-cultures of the young middle classes. The cognitive and emotional capacities of the individual are its productive forces. Self expression, anti-establishment sentiment and emotional attunement to the world are forms of economic potential.

The expanding universities sector provides the communicative labour for production processes that extend beyond output to incorporate consumers in the co-creating of symbolic meaning. In this new economy, consumption involves the pursuit of experience and the aesthetic practice of assembling objects and meaning in the process of self-becoming. The economic raw materials of this effervescent form of capitalism are intangibles like information, symbolic meaning, sounds and images, sensibilities, social connections and styles of living. Its economic activities generate a cosmopolitan modernity of difference that is deepening people’s sense of individuality. Traditional moral collectivities have been undermined as individuals reject imposed and universalist sets of rules and obligations in favour of an ethics whose styles are more in keeping with the ancient Stoic philosophers and their injunction to, ‘spend your whole life learning how to live’. ((Seneca (1997), Dialogues and Letters, Penguin Books, London.))

The individualisation of class and culture around these leading edges of technology driven production and consumption has been accompanied by the destruction of more collective ways of life. The collapse of manufacturing industry, its outsourcing to low wage economies overseas and the emergence of a global division of labour have undermined the income base of the working class. In 1976 the bottom 50 per cent of the population owned 12 per cent of the nation’s non-housing wealth. By 2003 it had fallen to 1 per cent. In parts of the country the working class has lost its productive role. Sections of the population exist as a reserve army of labour either economically inactive or in casualised and temporary jobs. The decline of traditional forms of employment and the creation of class segments superfluous to the needs of capital have destroyed traditional working class cultures and their virtues.

Over the last three decades, the neo-liberal model of capitalism has created a utilitarianism whose rational, economic calculation has contaminated all social relationships. Its creative destruction, its integration of personal life into market relations, the aggressive selling of cheap credit, and the destruction of cultural and moral inheritance has led to an economy without ethics. Modernisation and the erosion of civic culture have opened a cultural and economic gulf between the liberal middle classes and the mainstream working-class population. The breakdown of trust and a sense of disenfranchisement amongst the electorate has led to a crisis in political representation. Anxiety and uncertainty are expressed in a sentimental mythology about the national past, and a populist intolerance of cultural difference.


  1. D G Bokare says

    It is sufficiently proved that capitalism and ethics do not go together. Matter is simple that capitalism is only for maximisation of profits at any cost. This takes place as there are man-made laws, such as patents, copyrights, trademarks, limited liability corporations, trade unions, etc., made in favour of some elite and greedy people by the state. The number of these people is less than one percent of the total global population. It means, one percent has been legally empowered to loot and exploit remaining ninety-nine percent. The state is influenced all the time by these greedy people by using corruption route. Marx says, “Laws that divide people are against the nature and are, therefore, immoral. What is immoral is not immortal”. This immoral situation is found in Marx’s socialism and capitalism. Since this concentrates economic powers either in case of the state (USSR) or few elites and privileged people of society (capitalists/ monopolists). Unless all the people are allowed equal opportunities and freedom from coercive methods of state or monopolists, there would never be any ethical behaviour in any economy. Solution lies in repealing all monopoly laws and decentralise all the economic and political powers. State in that situation has to the duty to ensure that no one or a group of people takes advantage of price-fixing and restricting supplies in the market. We have evolved the systems to take care of these aspects duly backed by theories of economics. It is based on a totally free market in true sense, decentralised economic and political powers, distribution of means of production (technology, finance, infrastructure etc.) to all by the state at zero rate of interest and other facilities at reasonable costs. Real free competition (not to get confused with today’s monopolistic or oligopolistic market competition) will certainly result over time in a trend of lower prices of goods and service with improvement in quality continuously. Lower prices over time will reduce and also disappear interest element of the economy. This also removes unemployment as every needy person will be given means of production by the state to start his own activity. We call it self-employment in economics. Poverty therefore disappears over a period of time. Additionally, we have the state to monitor and check on consumption and exploitation of the Nature. This therefore becomes eco-friendly economic system. Thoday we all are worried about climate change and global warming and also a fear about disappearing mankind itself if green house gases are not immediately controlled. Pope Benedict XVI has also expressed his reservations about capitalism and also about Marxian socialism in his Encyclical released on 7th July 2009. He has also talked about unethical elements in capitalism. He also suggests an alternative economic and social systems to save the planet and also ensure providing full employment, removing poverty and balancing ecology. This is possible with the above stated alternative economic system. This alternative is based on Hindu Vedic ethos. This economic theory is yet to be challenged by any one since 1993 when it was released under the title “Hindu-economics”. Not only ethical values but also higher cultural values would be created in this new system. This becomes an exploitationfree society.

  2. A. F. van der Meijden says too + lots of comments elsewhere.

    At least there’s one professor who sees what I see. It needs a a further addition. Disagreeing with the capitalist monopolists is now called terrorism.