Moral Capitalism

Peggy Noonan has a fascinating column on the relationship between public morality and capitalism, a column which deals directly with the WorldCom/Enron/Xerox/etc financial scams.

I have been reading Michael Novak, the philosopher and social thinker and, to my mind, great man. Twenty years ago this summer he published what may be his masterpiece, "The Spirit of Democratic Capitalism. " It was a stunning book marked by great clarity of expression and originality of thought. He spoke movingly of the meaning and morality of capitalism. He asked why capitalism is good, and answered that there is one great reason: Of all the systems devised by man it is the one most likely to lift the poor out of poverty.

But, he asserted unassailably, capitalism cannot exist in a void. Capitalism requires an underlying moral edifice. Without it nothing works; with it all is possible. That edifice includes people who have an appreciation for and understanding of the human person; it requires a knowledge that business can contribute to community and family; it requires "a sense of sin," a sense of right and wrong, and an appreciation that the unexpected happens, that things take surprising turns in life.

Since capitalism relies so much on the trust and transparency between seller and buyer, the incidents with WorldCom and Enron are especially egregious. What they are not, despite the cries of some, are basic flaws with capitalism itself. Novak was correct that capitalism requires a framework of essential morality to operate correctly. That is why conservatives are so interested in preserving America’s moral fiber… because without it, the systems that make American great would begin to collapse. It’s not a lack of regulation or a flaw in capitalism that created this mess: it was a failure of these companies to respect the basic morality of truth and accountability.

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