Next Monday is the third and final debate in the First Principles debate series sponsored by Demos, the Ayn Rand Center, and It's A Free Country. Today, Ezra Klein of the Washington Post (representing Demos) and John Allison, chairman of BB&T and professor at Wake Forest University, preview their debate around the question "Capitalism: Is it Moral?"
Klein began by saying the very question is based on a category error.
Klein: Asking someone if capitalism is moral is like asking if the scientific method, or a wrench, or my toilet, or the telephone is moral, or for that matter, is happy or sad. It's not a person, capitalism, it's not even a society, it's an economic system and it can be oriented towards ends that we would consider moral or not moral. What capitalism is, broadly speaking, is effective.
Not in the purest sense of the word. Allison said the U.S. system cannot be called capitalist, it is rather a mixed economy.
Allison: But every time we have problems in the economic system instead of government regulation or government interference in the market. So whenever the things go wrong we get more regulations which actually reduce our standards of living so we don't' have a free market in the U.S. we have a highly regulated economic system in many factors and the regulated part of the system is where we typically have the biggest problems.
Klein agreed that Americans do not live in a purely capitalistic system, and suggested that pure capitalism would actually result in fewer profits.
Klein: In a truly working capitalistic market, profits go down to zero, because there should be so much competition you really shouldn't be able to have any margin, because any time you do have a margin somebody should be undercutting you till really it's razor thin.
The Brian Lehrer Show had a debate about inequality recently with liberal economist Joseph Stiglitz and the chairman of the Council of Economic Advisers under President George W. Bush, Glenn Hubbard. What the two agreed on is that inequality in America is rising--the top one percent now makes 25 percent of all the income each year, where they made only 12 percent in the 1980s. Is that the product of an increasingly capitalist America since the Reagan presidency? Allison said no.
Allison: I don't think that equality is a measure of ethics. That would be like saying it's unethical for Michael Jordan to be a better basketball player than me. I think the measure of ethics is whether a system is consistent with man's fundamental nature. And as human beings our fundamental nature is that we have to be able to think independently, to be free to think, to be productive, to be creative.
Klein ended by saying that the problem with Ayn Rand's philosophy of capitalism rewarding those who merit rewards is that, well, there's a lot of luck in life.
Because one thing that can happen in an overly meritorious society is that somebody gets all of the rewards and essentially develops a monopoly on too many of the resources and then those resources aren't there for other people to make their contributions as well.
This is just a preview! For more, attend the First Principles Debate on May 2!