Just read part of the 1848 Communist Manifesto and Adam Smith's Wealth of Nations for my Business Ethics class. Below is part of my essay in response. I didn't have time to write as much as I wanted. :)
"Newton,
Englehardt, and Prichard (2012) stated, “Adam Smith was absolutely
correct if he is taken to be describing capital formation;
but when it comes to the distribution
of the wealth the free market has created, his mechanisms have no way
of ensuring justice” (p. 3). So capitalism is indeed an excellent
way to create capital. So why doesn't a society adopt a Marxist approach to the distribution of the wealth that capitalism has
created? There is a significant problem with the communistic approach
to re-distribution of wealth. The re-distribution methods espoused in
communism undermine the motivating forces behind capitalism. In other
words, while in the process of re-distributing wealth, communism
eliminates the very mechanism that is creating
wealth. The result is that capital creation will diminish, eventually
dropping the standard of living of everyone in the economy, but most
often the poor, who are the very people communism claimed to be
trying to help.
When working with theories and models, it is of crucial importance
to know if the model accurately represents reality. Capitalism and
communism are both models for the handling of economy. Which
represents reality best? Capitalism is based on the observation that
humans are generally self-seeking. Self-interest motivates a
willingness to work in people who otherwise would be unwilling to
work. Hyeonseo Lee is a woman who escaped from North Korea. She
described an incident that had a profound impact on her. She saw
people dying from lack of basic needs, and everyone else just passed
by them. “Nobody helped them, because they were so focused on
taking care of themselves and their families” (Hyeonseo, 2013).
Sometimes, those of us who live in a very prosperous society where
taking care of others seems like second nature can forget about what
happens when everyone is suffering. The model of capitalism fits what
we observe of basic humanity. People are willing to work to better
themselves. In the Bible, Proverbs 16:26 observes, “The appetite of
laborers works for them; their hunger drives them on”. But if
others will take care of them, their motivation for work lessens. The
Bible warns against handouts. Thessalonians 3:10 says, “The one who
is unwilling to work shall not eat.”
Communism, on the other hand, argues that people are willing to work
for a common good, even at a relative loss to themselves. “True
communism depends on human nature being basically altruistic”
(Communism vs. Capitalism, 2013). There may be some truth observable
in this to a point. But as I studied in other textbooks, people
assign value to their altruistic work, thereby actually gaining
personal value in exchange for what they give away. What happens when
this personal value is gone? One can observe that people are
generally unwilling to make sacrifices that hurt themselves unless
they can see some gain from it. For example, if everyone in a society
works an 8-hour job each day, and all are taken care of by the
government with an equal “wage”, it is likely that everyone will
continue happily. However, would someone in this situation be willing
to work a 12-hour day while everyone else works only an 8-hour day?
Not unless he can see a benefit from doing so? That benefit may be
personal betterment, (such as overtime in capitalism), betterment of
another, avoidance of punishment, etc. But if he cannot see any
result from it, and if he is given a choice, human nature indicates
that he will avoid it. However, capitalism appeals to this specific
element of human nature. A person is willing to make a sacrifice for
the betterment of himself or the betterment of another from which he
derives personal value.
Therefore, the model of capitalism best matches reality and human
nature. It may not be the perfect model, and it certainly does not
solve all the ills of mankind. But capitalism meets the reality of
human nature. It understands human nature, and builds upon it a
system proven to generate wealth.
I would add however, that the best implementation I am aware of is
capitalism guided by Biblical / Christian morality. Capitalism alone
certainly allows for certain groups of people to take advantage of
other groups of people (communism also allows for this). Capitalism
guided by moral principles may be the best approach. The best
examples of the implementation of capitalism that I am aware of are
where capitalism operates inside a set of cultural expectations that
are distinctly Biblical / Christian morals. People may not realize
the origin of the values they hold, but they happen to match. These
values help to keep the selfish tendencies of mankind in check. For
example, the United States has a highly-developed business ethics
system which brings capitalism and biblical morality together into a
society and economy that has been one of the strongest on earth."
Quoted block from Module 1, Completed Assignments. David Lorimer. 560 – Business Ethics. Aspen University. Professor Sherrie Campbell. Submitted 03/23/2013.
References:
Newton, Englehardt, Prichard. (2012). Taking Sides: Clashing Views in
Business Ethics and Society, 12th/E. McGraw-Hill ISBN: 9780073527352
.
Lee, Hyeonseo. (2013). My escape from North Korea. Retrieved March
22, 2013 from
http://www.ted.com/talks/hyeonseo_lee_my_escape_from_north_korea.html
.
