Ethical leaders, capitalism and competition
With economic downturns, the pandemic and the on-going failure of many democracies to adequately solve their peoples’ needs, it is beneficial to look at the heritage of “western” world thinking and development. As new democracies are born in the Middle East and in Africa, we are seeing the dawn of a new age that will demand leaders who are more in tune with integrity and are willing to make a strong concerted and in some cases, new commitment to the ethical roots of these great systems and practices.
Capitalism, democratic principle, and proper leadership are irrevocably linked. To preserve the best of these theories, we need to understand where they have been directed towards positive outcomes or goals and where they have been misdirected, therefore falling short in terms of the best possible moral ends. At the core of many of these failures we can see immoral decisions and actions that often violated the very tenets of the systems. In many instances, it was the people in control of these trends and circumstances who caused these issues to emerge. People (particularly leaders) have often (sometimes unknowingly) directed these systems, towards goals and outcomes, which have created or worsen societal and global predicaments.
What does healthy competition look like?
As leaders, how do we lead while upholding the values of democratic practice?
What does a study in ethical leadership tell us as we consider the roots of capitalism and democracy?
In order to “right this ship,” we need to go forward with a thorough understanding of the philosophical ideologies, the economic and political systems and the historical trends that have led us to our current position in the twenty-first century. As we start this lengthy chapter, keep the above questions in mind as guideposts to direct our work.
Analyzing Ideologies
To understand the concepts of capitalism, democracy, and leadership, it is productive to return to underlying societal concepts that have helped to create and perpetuate these ideas. It is important to understand how people think of and defined themselves, individually and collectively.
The fields of psychology and sociology point to a study of group dynamics. The work of sociologists Ting-Toomey and Chung in Understanding Intercultural Communication, as well as Gudykunst and Kim in Communicating with Strangers, describe important dynamics at the core of effective communication and leadership in an increasingly diverse world. There are individualistic and collective tendencies in groups and cultures that define the dynamics and influence our interactions with each other. Within that structure, people are impacted by the influence of what experts call “in” and “out” groups.
In group terms, the “in” group is considered the body of individuals who are most accepted or highly prized by those within the group who defines or influences how it interacts; conversely the “out” group is that collection of individuals who are not highly prized or revered. The factors that determine “in” or “out” groups vary from group to group. These dynamics set the tone for accepted norms within groups. At the core of individual identification is the understanding of how the “in” group or group in power impacts interactive practices.
In addition to acknowledging that these groups dynamics, it is important to understand that groups, can be placed into two general categories whom sociologists argue shape their communication and behavior. Those categories can best be understood under the sub-headings or terms referred to as “individualistic” or “collectivistic”.
Individualistic thinkers or groups emphasize the importance of the individual role and the immediate family. Individualistic thinking comes to dominate perspectives and action within this pseudo-society as this group trend places greater value, definition, and importance on individual perceptions, rights, and the development of one’s potential.
Collectivistic groups emphasize the role of group identification, seen through group goal success and the realization of a greater collective entity. Collectivists, therefore, see their value and very being, and of course importance, in group resolution/dynamics. In both instances, it is important to realize that both individualistic and collectivistic conglomerates have attributes of each characteristic within their fabric, even though they are defined by their predominant inclination.
To understand the impact that individualistic oriented groups have on how we lead others and also our understanding of diversity issues, it is vital that we analyze what individualistic thinkers most highly prize and what factors influence their worldview. The best place to start is to analyze the core tenets of the individualistic perspective.
First, individualistic thinkers tend to be less influenced and controlled by the accepted norms of the “in” group. This is not to say they are not impacted by those who makeup the “in” group; instead it argues that there is a tendency, in comparison with the collective group, for there to be greater allowance for individualistic perspectives and attitudes that make the “in” group’s control less strong. This dynamic suggests there is variability in how individualistic thinkers are impacted by the role of the “in” group.
The second element that is usually the basis of individualistically based conglomerates is their inherent appeal towards more universal concepts and universal language constructs. From this standpoint, individuals tend to think in terms of values that appeal beyond their group and reflect beliefs and characteristics that transcend group dynamics. Experts argue that individualistic thinkers find greater meaning that creates important group boundaries that keep individualism in check—a direct by-product of an increased level of individualism found within the group dynamic.
Third, individualistic thinkers emphasize the role of self in terms of individual success. Self-enhancement is seen in individual goals and rights. Thus, one gains greater success in one’s own pride rather than through group advances where the role of the individual is diminished.
The fourth key characteristic is the importance of self-competence in individualistic dynamics. One gains greater individual success and self-enhancement through reliance on one’s own self-competence. As a result, people who see their value in such goals will work incredibly hard to increase their self-value and self-worth through their individual skills, education, and advancements, often at the expense of others. This phenomena can occur unconsciously, as a group’s dynamics dictate that the “trade-off” of one’s success be aligned or connected with the lack of success of another.
Thus, the value of self-reliance or competence reinforces the importance of self-motivation and self-success. The last factor to consider when analyzing the individualistic perspective centers on the root of group progress or advancement. In individualistically oriented groups, progress is tied directly to the role of the individual, who is seen as the primary motivating force for change and goal attainment. For progress to be attained, the individualistic thinker relies upon the belief that the individual should “push him or herself to the front” of whatever group dynamic or scenario presented, in order to benefit themselves directly and/or promote proper progress for all.
Collective Perspective
As one might image, it is clear that the collective perspective is radically different. The collective perspective emphasizes the importance of the role of the individual in direct correlation with the aspirations and goals of the group. As a result, it makes sense that the “in” group would have a more powerful effect on individuals connected with this dynamic.
Second, in a more collective system there is an increased tendency for members of the group to allow for greater divergences of values and/or to accept a more multi-dimensional approach to accepted practices. This coincides with the inclination of this perspective to emphasize more general approaches to communication and understanding within the group, whereas individualistically influenced factors tend to place greater worth on specific approaches to communication and problem solving.
The third characteristic of collective groups places great emphasis on the role of self-enhancement found only in group goals and group successes. Thus, greater group harmony and preservation is an important feature of collective thinkers as values that emphasize group success or progress are valued rather than independence or self-improvement.
Fourth, this dynamic trend places greater value on the role of self-criticism rather than bettering one’s view of one’s self. Looking for flaws and diminishing one’s worth in terms of individual goals, is also at the core of collective worth within such group expression. And last, there is a tendency of collective thinkers to place “group harmony” or “group cooperation” over the importance individual freedom or individual expression.
Thus, individual goal-seeking, individual success, and individual progress is not fundamental to societal growth and overall enhancement. In fact, collective societies often are convinced that rampant individualism actually destroys the inherent progress of team, destroying tradition and promoting potentially catastrophic selfishness. The alternative viewpoint, then, is one that places great value on knowing one’s position in the group and fitting one’s self into the greater structure of the dynamic that one is a member of. Comfort, satisfaction and importance are defined in these terms and therefore benefit all involved.
Group Values
| Self-Direction | Stimulation | Hedonism |
| Achievement | Power | Security |
| Conformity | Tradition | Spirituality |
| Benevolence | Universalism |
Using what we have learned about the characteristics of individualistic and collective perspectives, it is now important to look at the fundamental characteristics that are at the core of all team dynamics through the lens of these two distinguishing categories. Schwartz (1992) in Universals in the Content and Structure of Values, argues that the eleven moral characteristics written above can be found in all societies, cultures and groups; but, depending on the classification of the group structure connecting to our last few slides, some values are more highly prized than others. The trends can be broken down into these categories.
Individualistic thinkers tend to value: self-direction, stimulation, hedonism, achievement and power over security, conformity and tradition, characteristics which are more highly prized in the collective mindset.
The characteristics of spirituality, benevolence, and universalism, though interpreted differently by groups, are, at their root, neither individualistic or collective by nature, but are vastly differentiated depending on which type of dynamic defines them. Though all human groups value some characteristics, it is clear that background plays a huge part in how individuals conceptualize knowledge and work with others.
Individualist Values
- Materialism
- Success
- Work and Activity
- Progress
- Rationality
- Democracy
- Humanitarianism
When we analyze the eleven cultural/group values, we can break those values down into further through two classification headings of individualistic and collective. The most highly prized individualistic cultural values can be seen in the list above. In many sociological studies that analyze differing group or team norms, western society has been largely classified as highly individualistic compared to other societies. Westerners prize materialism, success, work and activity, progress, rationality, democracy and humanitarianism.
In a 1965 study by J.W. Vander Zanden in Sociology: A Systematic Approach, these characteristics were described as fundamental to the American experience and were typical of a highly individualistic culture steeped in factors discussed in the last few slides. What has become most important culturally to Americans,
- is a heavy emphasis on material possessions,
- the promotion of individual success and the development of expanded opportunity,
- the reliance upon the importance of hard work and constant activity as a determinant of individual success or rank,
- the continual acknowledgement of the driving force of progress through time found in the merits of individual achievement,
- the reliance upon individual rationality and thinking, and
- the unwavering belief in the importance of democracy founded in individual accountability and the participation and the value of individualistic philanthropy and voluntary charity.
These values are aligned with thinking and language patterns that place great accountability and pressure on individuals to self advocate and to be individualistic in their thoughts and actions. With the increasing movement of globalization in our world, it is becoming more and more important for everyone to become aware of divergent team constructs and dynamics that we face as we build, understand and cooperate with those we lead. This includes interplay between individualistic and collective entities that take place in groups.
Collective Values
- Hospitality
- Generosity
- Courage
- Honor
- Self-respect
Collective societies tend to appreciate the five values above. Though each culture is distinctly different and respects these five values to varying degrees and levels, it is clear that collective cultures place greater significance in concepts of thinking and language that put worth on attitudes and behaviors that reinforce group survival and success.
Perhaps this can best be explained through the work of Patai in The Arab Mind (1976). In his study, collective groups specifically in the Arab culture were discussed. This collective group, viewed the importance of hospitality, generosity, courage, honor, and self-respect as instrumental to the progress of society as a whole. In all five attributes, the importance of the individual is diminished in direct correlation with group success norms found often in a rich tradition.
Collective cultures, such as Arab cultures, emphasize the importance of thinking and behaviors that put others before oneself. This is seen in values that might be interpreted to be individualistic, like the characteristic of self-respect, which seems to highlight the importance of one’s self over others. Patai argues that one’s self-respect in that culture is directly tied to others and their interpretations of the individual at hand. As a result, one’s own self-respect becomes secondary to the respect of the collective group. One’s self-respect is tied closely to what others think. It emphasizes and reinforces the unique tie inherent in these societies where one’s thoughts, attitudes, and actions coincide directly with group progress and success.
Tracing the Development of this Dilemma in the World
In analyzing the ideologies behind societal dynamics, we are able to better understand the differences between the western tradition of thinking and the understanding other areas of the world have possessed historically. The core of this conversation historically seems to center on the way that people see themselves in relationship with others.
The experts in the field, make it clear, that westerners are more prone to think in individualistic terms and that this approach has defined the various ideologies, systems and values that have lent themselves to the thoughts and actions that have become predominant in our world today. Those perspectives and traditions have produced many wonderful opportunities and outcomes for people; but at the same time, these same results, have created a series of problems that seem to continue to plague our societies and world.
In order to better understand the major evolutionary influence of capitalistic tendency and democratic influence, we can trace these thoughts to their western origins. There are six major categories to trace.
- The first is the English political tradition; a tradition that has had a major influence on many political systems worldwide.
- The second is the historical age of colonialism; a time when the western powers, particularly Europeans, helped to shape the economic and political landscape of the world.
- The third is the development of capitalism; a system that evolved with the conception that economic prosperity would be more likely with “freer” market policies.
- The fourth trend centers on the incredible development of technology; this development, acknowledged as the Industrial Revolution, led to significant changes in every aspect of human life, helping to influence the other five headings discussed in this section.
- The last two factors to study in order to better understand capitalism, democracy and leadership can be found in two specific worldwide trends of the nineteenth and twentieth centuries. The development of nationalism and imperialism are important to consider as well, as we look at how these ideologies have impacted world organization and influence. Both the concepts of being loyalty to group, location, or idea as well as the rapid expansion of influence and power in the world by a few countries, has helped to define our current state of existence.
In order to discuss the first issue, we look to the writings of the famous seventeenth philosopher John Locke. Locke, was a product of an English system that based its evolutionary understanding of the best way to govern–on the idea that the enhancement of individual rights and responsibilities was crucial. Prior to this, and as far back as the origination of Anglo-Saxon England in the Middle Ages, the belief that the strength of overall governance was based upon the fortitude of a group of leaders. Kings in England did not rule by absolute authority or conception. They were subject to the constructive input and evaluation of the nobility. It is within this framework that we see the development of Parliament. The natural evolution of these ideas, including the English Civil War in the 1640s and the emerging discussions and clashes of Parliament and the monarchy during the reigns of Charles II and James II, led to the refining and furthering of these ideas in the late seventeenth century. This is where Locke enters the scene.
Advocating a position based on the idea of a constitutional monarchy, Locke argued, that men were endowed with rights from nature and not merely from men or a government. Humans possessed “natural rights” given to them by God, the value of a human being directly correlated with the maximization of happiness found in enhanced freedom, preservation of individual prosperity and the protection of individuals from tyranny. When Locke wrote these initial ideas, England was politically divided on what the concept of “rights” truly meant in the terms arrayed above. When James II came to the throne in 1685, Locke’s ideas became more prevalent and helped to lead to the Glorious Revolution of 1688–a revolution that eventually deposed James II, arguing for a “liberal” interpretation of the rights of an individual. In acceptance of this new ideology, the English Parliament installed William and Mary as the new monarchs and Locke’s written works, including his Two Treatise of Government became more popular, influencing western development not only through England but also the United States, France and other countries.
Humans invented government
- Purpose of government:
- Protect liberty (freedom)
- Protect private property
- Government regulation unethical
- Infringes on liberty and private property
- Capitalism is ethical on “rights” grounds
- Based on liberty and private property
Locke advocated for greater liberty for the average citizen were manifested in the English Bill of Rights coinciding with the Glorious Revolution of 1688. This newly formed and adopted approach to governance and citizenry in England was based upon the belief that individuals could be trusted to use their good reason and moral conscience to maximize happiness and make good, solid decisions for all involved. The premise of Locke’s work was that natural law given by God would guide people and through this guidance people would, from their own volition, make appropriate decisions. Thus, humans were the inventors of government–protectors/preservers of the system as well as benefactors of this social contract, their liberty and private property preserved by mutual agreement. Such ideas created a predisposition towards economic liberalism, eventually capitalistic thinking, and the idea that government should be based on the principle of “for the people, by the people”. With this understanding, emerged a natural wariness of government and power.
A good sense of these ideas can be seen in the Magna Carta of 1215 and The English Bill of Rights signed into law in 1688. The Magna Carta had a significant impact on democratic practice and expansion in the world. It discusses the issues of taxation, military authority, election procedures and legal redress and exemplifies the same issues that modern democracies still struggle with today.
The English Bill of Rights and the tradition that came from this document, reveal the connection between leadership, ethical decision making and the preservation of democratic principle. The democratic tradition required citizens to view themselves as leaders. Citizens were vested with upholding the “rights and responsibilities” of everyone. This notion helped to redefine leadership, appealing to conceptions of objective “right” and “wrong” found within peoples’ good reason, coupled with a reliance on greater input from all if this process was to work as effectively as possible.
As time went on, the root of the French Revolution and the dramatic changes that would followed during the nineteenth century, would continue this trend of “rights” and the outcomes that would be based upon this predisposition.
Legacy of Rights
US Declaration of Independence (1776)
United Nations’ Universal Declaration of Human Rights (1948)
This legacy of rights is found in more modern documents. The United States’ Declaration of Independence, 1776, appeals to these “Truths” and the ability of men to govern themselves through “Good” Reason directed by ethical principle; the characteristic of this premise, based not simply in “selfish” interest, but a form of “self-interestedness” that comes from a greater awareness of one’s place in society. Other documents, such as the French Universal Declaration of Human Rights 1792, and the more modern United Nations Declaration of Human Rights statement formulated soon after World War II, echo these beliefs and have helped to shape the importance of the individual and individual-oriented conception.
In England, during the development of increased democratic principle in the seventeenth another historical event redefined politics and the global economy. This developing trend has been referred to as colonialism.
At the heart of colonialism was the incredible desire of Europeans to gain economic prosperity. The Europeans started to realize the enormous possibilities for wealth was available to them and they looked the Americas, Africa, the Pacific and Asia for that wealth. The early key to prosperity in the seventeenth and eighteenth centuries was reliant upon two very important ingredients.
The ability to find and produce new resources such as tobacco, cotton, sugar and tea for a new emerging world market. With the emergence of the role of the commoner in world affairs, seen in our discussion about rights and seemingly coming from the other trends of the early modern world. The western world economy adapted to a philosophy of mass production of these resources for public consumption over time. Thus, natives and slaves were “employed” in this system to keep prices down while harvesting these newly produced goods in sectors all over the world where they had been discovered or were easily grown.
Essential to this system was the Trans-Atlantic trade system that took labor from Africa to the Americas, to be used in the growth and production of resources that would be eventually sold in European markets and by the nineteenth century throughout the world. As this system of trade across the Atlantic came forth, two economic methodologies were working behind it.
The earlier system was referred to as mercantilism–popular during the sixteenth and seventeenth centuries and devised in correlation with the rise of absolutistic political theory. The second system originated in the eighteenth century in the research and arguments of a Frenchman by the name of Quesnay and eventual “father” figure of capitalism, the Scottish thinker Adam Smith: colonialism.
Colonialism
As colonialism emerged, the complete colonization of the Americas took place. European powers came to claim and dominate all of the Americas in search of resources and also for rapid expansion into these new areas in order accumulate new products and resources.
Objectives of Mercantilism
- The health of a nation can be measured by the amount of precious metal [gold or silver] that it possessed
- Bullion was the source of prosperity, prestige, and strength for a nation
- A country’s goal should be to create a “favorable balance of trade”
- Thriving agriculture should be carefully encouraged by a large population base who will be instrumental to colonial growth
- Colonies would provide captive markets for manufactured goods & sources of raw materials
- Luxury items should be avoided
- State action was needed to regulate and enforce all of these economic policies
The development of the first system of economic productivity traced to this era and the colonialism of the time period is referred to as mercantilism. Europeans believed that economic prosperity and market system growth could be traced to direct government control of markets by the setting of price, demand and the production of goods. Within a colonial system, mercantilism was productive as land newly retained by explorers was made available to governmental regimes rather than private interests.
Markets were emerging and it was imperative that countries set the precedent for economic development through state action and in some instances, direct monopoly controlled markets. They did so by following a belief that true economic viability came from what could be called “bullionism” where the health of a nation was measured by the amount of precious metals, namely gold and silver, that a country possessed. Spain led in this objective through much of the sixteenth century. The more bullion the government had, the more buying power that country possessed and it was assumed during this period, that this would create economic success and prosperity.
These aspirations were not completely true as the seventeenth century saw a series of depressions where markets faltered and the possession of bullion did little to off-set the dramatic need for goods that were not readily available. The goals of mercantilism, beyond bullion acquisition, was the formulation of a formidable trade balance where the country’s goal was to export more than was imported. Kingdoms were urged to avoid luxury items and focus, on goods needed to propagate a strong economic system.
The production of goods were taxed and tariffs were established on produced goods more than that of natural resource production. Agriculture and the reliance upon a large population for a domestic labor force was encouraged for self-sufficiency’s sake through colonial possession. Thus, food and goods produced within one’s own empire would allow for a greater tax base and enhanced self-sufficiency. With that control, was the opportunity to create what can best be termed “captive markets” for the country’s profit. This was done through a series of steps. Countries created and financed their own merchant fleets and navy to protect their interests. As this system became the standard form of economic development in the seventeenth and eighteenth centuries, prosperity did not abound in all cases. The idea of international development on a more global scale (where private companies were allowed to prosper and develop would over time) surpassed the individual prosperity offered by the system.
Francois Quesnay
- No single document or book summarizes his economic system
- He was concerned about the state of the French economy, especially of French agriculture
The counter to mercantilism that eventually came to dominate the economic beliefs of the western world was the system: capitalism. Due to rapid colonialism, the precepts of free market systems, less government control and the rise of private industries/companies, began to be studied, were argued and debated in France during the mid-eighteenth century. The work of Francois Quesnay, a French surgeon and physiocrat, became most popular in this regard until Adam Smith’s developmental text, Wealth of Nations, published in 1776.
Quesnay worked for the French government in a variety of capacities, he was intrigued by economic theory and formulated the contrary belief that governmental direct control of resources, land and colonial development, was the best way to prompt economic prosperity. He grew increasingly concerned with the continual problems that the French monarchy and kingdom faced in the wake of pure mercantilism: famines, depression and great inconsistencies in resource and food acquisition as well as failures in economic development. These were tied to the misconception of the approach to foreign policy, political absolutism and control of the markets and trade by the French government was taking.
Reacting against the extreme economic theories of the time, Quesnay argued in Tableau Economique, 1759, that the root of French economic system failures was the extreme and misguided tax system which targeted the developing economic classes (particularly in the agricultural sector). The taxes seemed to diminish the ability of those the root of resource acquisition and production from prospering and kept them from continuing that prosperity within the French market systems. Productive work in all sectors had to be the “backbone” of economic wealth and prosperity. If the French wanted to increase its economic standing with greater financial resources for the government and monarchy, it needed to shift its focus to enable the emerging working and middle class to become more prosperous and therefore taxed. A more prosperous society would spending more and would spur further production and market expansion.
During the time when Quesnay theorized about economic development in France, Adam Smith, a philosopher, followed a similar path in Scotland. A product of the eighteenth century Scottish Enlightenment, Smith (influenced by the analysis of the physiocrats in France), wrote two instrumental texts of the time: Wealth of Nations and the Theory of Moral Sentiments. He attacked the mercantilism system for its controlling factors and basic assumptions about humans. He advocated for a more productive approach to government where markets were allowed to prosper in the wake of increased individual freedom and rights. He argued that the basic unit of decision-making should be based upon the concept of the nation, which he outlined as people who should be allowed to pursue their own interests. From concepts of greater freedom, the ability to pursue their own interests, and the elimination of governmental affairs in the market system, would result in enhanced prosperity for all. At the root of this discussion is the argument that increased individual freedom must be coupled with enhanced individual responsibility which he outlines in his conclusions on moral theory.
The Formulation of Capitalism
In assessing the successes and failures of mercantilism, Smith deduced that the real factors that defined economic prosperity were not to be found in the accepted notions of previous experts. According to Smith, they did not fully understand “market behavior”. Following the ideological trend of the era, Smith espoused the view that societies are more profitable and moral when they follow natural law–the belief that greater individual freedom of choice in all aspects of one’s existence, helps yield beneficial results for all. Thus, successful and prosperous societies were not linked directly with geographical benefits or export/import equations but the freedom of commoners to pursue their own personal interests through a free market or free markets’ model.
As a result, by the late eighteenth and early nineteenth centuries, the world became more heavily influenced by the notion that political (greater democratic process) and economic liberalism (greater market freedom) was productive and ethical. Smith and Quesnay based their assessment on utilitarian grounds, arguing that capitalistic thinking was the most moral system, as it yielded enhanced prospects for prosperity but also relied upon the “Good” Reason of the citizenry to follow moral principle; this in turn would yield a “net” social benefit by the adherence to citizenry responsibilities within society and the market. The government’s responsibility, should focus on enacting policies and laws that educated, reminded and promoted good moral behavior through protection of private property, enforcement of contracts, the protection of citizens from outside threats, and the building of a strong and productive infrastructure by which economic prosperity could be furthered.
The Search for Resources
While capitalistic theory influenced the world in ways described earlier, the arguments of Quesnay and Smith were fundamental to the development of modern concepts of trade and economic markets in an international sense. Many approaches have been voiced since the late eighteenth century; several were economic hybrids, which balanced governmental influence and free market sector development. It became obvious that colonialism and the economic theories are connected this worldwide view, spurred a global approach to resource accumulation but created conflicts over whose items needed to supply whose markets.
The last component of colonialism emerged during this era–namely the treatment of the native populations. As mercantilism revealed, one of the objectives of European countries desiring economic prosperity, was to use colonial or native population people as a form of economic development. Economies relied on these groups to harvest and produce goods under direct governmental control for the wealth of the “mother country.” At the heart of the workforce conversation became the issue of slavery, an emerging market during the seventeenth and eighteenth century.
Slavery had always existed history, but the development of a system of occupation of lands outside of Europe, coupled with the need for mass amounts of workers to use in the production of natural resources and manufactured goods brought this phenomena to new heights. Never before had so many people of Native American, African or Asian descent been forced by Europeans to work under these new conditions.
In the fifteenth century the Portuguese and Spanish, began to enslave Native Americans and later Africans, to obtain workers to mine and work on resource plantations within the newly discovered lands. In the new world, Europeans needed an instant workforce and first relied upon the native population in the Americas, India, and the Pacific for their manpower. They believed that they had the right to force people of the lands they had conquered or occupied to do as their government or local officials deemed necessary or allowable, Europeans created systems of landholding and production where locals were forced to work for the benefit of those in power. The production and harvest of sugarcane, tobacco, and other newly discovered New World crops as capitalism emerged, slowly created a new core of production.
Native populations usually did not fair well, they often died of diseases through the interatctions they had with Europeans. They experienced Europeans wrath, who were brutal in their work demands. They were often displaced from their homes and families and forced to work in an industry where they could not fend for themselves. Frustrated by the local population’s lack of production, Europeans turned to a new approach–the acquisition of Africans through Portuguese trade ports in Africa. Slave markets emerged all over the Atlantic region between Africa and the Americas, as individuals of African descent were captured, sold and transported to the New World to maintain the European economic system of development. It is estimated that approximately ten million slaves were taken from Africa and transported across the Atlantic for these objectives.
As the prosperity of the colonial empires increased, Europeans continued to acquire and enslave people during the seventeenth through the eighteenth centuries. Among the most highly sought after goods in this economic system were slaves, they were important to the production of sugar, fish, rum, textiles, tobacco, cotton and lumber that was coming from this new world. Slaves were instrumental to all other resources in that regard. The system that emerged involving the African slave trade became called the “triangle trade”. Slaves were taken on Portuguese, Spanish, English, Dutch or French specially designed slave ships across the Atlantic Ocean. The conditions on these ships was horrid. Disease proliferated and many slaves died on the journey. Those who survived were often so weakened by starvation or other factors that they were unable to work or died soon after arriving.
Many enslaved people had to develop new skills or were forced to adapt to their new environments, completely dependent on those in power over them. Slaves worked in terrible conditions in agriculturally based jobs with inadequate housing, extreme forms of punishment, poor diet and little or no rights. It seemed as if the system of capitalism allowed, and in some cases encouraged, the further mistreatment of those who were unable or diminished in their ability to advocate for themselves.
Colonialism and Capitalism
In many ways, we can trace the beginning of the “seeds” of modernity to the progress of colonialism. With the rise of colonial attitudes steeped in the ideas of the early modern age (Late Middle Ages, Renaissance, Reformation, Religious Wars, Scientific Revolution, Absolutism and Enlightenment), a new world had emerged that deepened European competition. From the desire to compete and produce economic prosperity at home and abroad, European countries developed economic systems based upon absolutistic ideologies and then later, began to switch to a more capitalistic framework steeped in free of markets for profit. Regardless of the economic system, globalization had begun and the western world had a strong hold on this newly developing world order, determined to be “progress.”
Technologies created that were related to resource acquisition contributed to “progress.” From as early as the 1770s, Great Britain led the way in this regard–dominating the world in terms of land possession, resource accumulation and technological development. By 1850, Great Britain was foremost in the Industrial Revolution with the belief by many, that these machines, products, and lifestyle changes would offer more progress and advancement than setbacks. This has continued until today. Perhaps the best example of technical advancement for the age can be seen in the Great Exhibition of 1851 in London, where over 200,000 separate inventions/industrial machines, were put on exhibit as a demonstration by Britain of its leadership in this new modern world and to showcase the benefit that would come from such production.
People flocked to the Great Exhibition, countries marveled at the colonial resource power, manufacturing system, and societal shift that had occurred in Great Britain and would follow throughout the western world.
Massive problems began to appear in the nineteenth century. First, Europe began to see enormous class divisions in spite of the assertion of many that progress would benefit all. Some benefited, like the new emerging class of wealthy entrepreneurs or “new” moneymakers who were formerly middle class and begun to formulate a new class of self-made business oriented, aspiring industrialists. The nobles of the time period continued to prosper and in some ways were threatened by this new emerging “money-made” wealthy group who rivaled their influence in society and government. Others made small advances and most of the middle class seem to fall into this category. These individuals seemed to acquire more access to goods and products and were given opportunities to better themselves in terms of economic success and even in some instances, education and skill training.
There were many who did not prosper and even as some experts have written, were in an equal or worse situation than before the start of the Industrial Revolution. These people were often trapped by the promise of better lives, taken from their primarily agrarian positions, and ended up in centers with jobs linked directly to the new emerging factory and manufacturing. They were not protected by the rights, ideologies or concepts of the French Revolution and were swallowed up by the system of raw material accumulation and the manufacturing sector. The lower class became the stalwart of the Industrial Revolution but benefited very little from their situation and the goods that were produced by their employment opportunities. In addition, it is a good reminder within our own age as this trend continues to occur in our modern world.
Abuse of the Labor Poverty Reinforcement Unsafe Conditions
Besides the class conflict that began to emerge within the new industrial societies, modern development also saw poor labor treatment and dreadful working conditions. Factory owners, financial entrepreneurs, and mine overseers, to name a few, were often physically and emotionally abusive towards their workers. Workers were employed at wages that were intentionally and extraordinarily low due to supply and demand in the labor market. People were required to complete jobs regardless of safety issues. Many accounts discuss the poverty families were subjected to as a result of their inability to make adequate money; thus practically every family member, including children, were employed in some manner in local industries.
One of the most common ways in which poverty abounded among the lower class were directly related to work related injuries or physical ailments caused by the employee’s environment. Workers hurt on the job were unable to work; thus, their families were forced into poverty regardless of the length of service or the expert manner of the work that had been performed up until that point. Due to these extraordinary circumstances, lower class children were not given educational opportunities that might have afforded them a chance to move beyond the plight of their parents–the cycle of destitution continued.
Another problem that became more difficult to deal with in Europe and other industrialized areas, was the issue of pollution. As people flocked to manufacturing centers, situated in previous urban centers or newly emerging urban situations, the congestion of these new living quarters combined with the increase of industrial output and waste, caused the air and water quality to decline. London went from a city of one million in 1800, to a metropolitan center of 2.3 million by 1850.
The sewage caused by overpopulated conditions made the smell unbearable and combined with the air pollution, the health conditions were not good and the citizenry, especially the lower class, suffered. The government of the country and the communities within these urban centers in the early nineteenth century, did not know how to deal with these new problems. In some instances, they did not believe that it was their problem. As such, and without adequate social support, zoning, and legal provisions, pollution raged out of control, causing people to get sick and significantly altering the quality of life of the citizens of these various communities.
Industrial Revolution
As cities became more cramped and living conditions more difficult for the vast majority of people in urban centers, other problems besides class divisions and pollution emerged. The wealthy began to shun the city to avoid problems that plagued these areas. As a result, class divisions were made worse with the middle and lower classes continuing to live in these scenarios, but without the political or economic power or influence to make definite and productive changes to better the conditions. In some situations, whole families were cramped into row house rooms where many lived in cellars or occupied living conditions that were horrific. Crime, violence, consumer fraud, and social problems of every kind skyrocketed. This increased the stress placed on families and communities, people were more prone to increasingly negative reaction to the changes that were occurring in their lives. There are some studies that emphasize the possibility of increased psychological trauma and abnormal behavior tied directly to new social and cultural patterns.
Problems inherent in Capitalism
As these problems began to emerge, many people wondered whether capitalism was moral. The problems of dominant land possession, resource accumulation and technological development in the western world indicated that there were significant issues with how capitalism had evolved. These problems slowly moved to other regions of the world. Relentless acquisition of resources by individuals and/or countries resulted in excessive and unchecked greed and abuse of power. As time went on, it became more and more apparent that the responsibilities of those benefiting from capitalistic and democratic evolution was ignored in some capacity. As population bases grew and markets expanded, it seemed easy to overlook direct moral responsibilities based on natural law, as individualistic ideological conceptions and competitive processes became more prevalently accepted and retained as necessary for prosperity. The dilemma of the by-products or what economists refer to as externalities of economic exchange began to be more obvious as well. The cost or outcome of exchange within the market systems, seemed to be increasingly creating a series of problems worldwide. Many externalities of exchange and production were discussed earlier.
The prevalent issue of externalities often went unresolved and had a significant impact on societies, their people and their ability to prosper or not. It became quite obvious that institutions and individuals would not always function from a moral premise which fostered the best of intentions for all. Instead, the system seemed to be moving towards greater “self-focus” with a greater “isolationistic” understanding that would diminish or retard the reliance on individual moral conscience and the desperately needed will fundamental to insure proper actions within governments and economic markets. Michael Sandel, famous author of Justice, discusses the importance of not allowing the market to dictate moral responsibility in his talk Why We Shouldn’t Trust Markets With Our Civic Life. Look for arguments that confirm the need to avoid system-wide ethical problems that come from capitalistic market dictation.
Karl Marx became an outspoken critic of colonialism, capitalism and democratic practice. Outraged by what he believed to be the marginalization of those who were the basis of the system itself, namely the workers and the underclass, Marx argued that the era of capitalism and colonialism had encouraged extensive selfish greed for a few, while taking away the rights to opportunity and “Good” from those who were less powerful or influential within society. He wished to reverse the trend of greater monopolization of working conditions in larger institutions and desired to encourage mobility for workers through the process of direct instruction/training through the apprentice, journeyman and master tradition training practice where worker training and independence was more highly valued, offering individuals increased freedom rather than the increased “slave-like” conditions that factories or larger institutions forced on their employees. Instead of the prospect of being one’s own master, Marx argued people sold their labor for wages that would never allow them to become a strong, independent entity within society. Thus, capitalism diminished and even destroyed the majority of people and their independence for the benefit of those who were able to gain power and institute their will on others through economic prosperity–a prosperity these individuals gained from the underclass, not of their own initiative or hard work.
For Marx, capitalism and true democracy could not be achieved until society was dramatically changed. He believed that the government needed to be reformulated away from a predisposition to protect the wealthy and powerful, whom lived off of the degradation of the poor and was oriented towards the enhancement of the rich. In Marx’s estimation, the system, both politically and economically, had defaulted on its moral responsibility to each individual, leaving in its wake, unfair economic, political and social situations. In his most famous work, the Communist Manifesto, Marx wrote that people within capitalistic societies lose their freedom, as they fail to control their ability to do their jobs and are unable to authorize the products they nstruct with their work, and the means of production (raw materials, technology, land) is taken out of their hands. This scenario forces common people into confrontational situations with their fellow workers, by their capitalistic employers who use such tactics to diminish wages and keep the working class in a constant state of flux and disorganization for their own financial benefit. Marx advocated for massive change where ownership would be replaced by moral authority from experts or peoples’ representatives, who would replace capitalists. Societal decisions should be based on the welfare of all. Ironically, the ideologies of capitalism and democracy had created a reactionary belief system that looked to quell the abuses of developments but had created great moral problems worldwide.
Change came in other ways as well. With the dawn of scientific exploration, new theories emerged about life and nature. Charles Darwin wrote Origin of the Species during this time period, proposing the concepts of survival of the fittest, natural selection and eventually in later works, the basic tenets of evolution. In the scientific and philosophical realms, this represented major change in terms of how people began to understand themselves, human kind, nature and what the point of life might be.
Darwin’s theory later became associated with the work of other thinkers such as Herbert Spencer, a British philosopher, who argued that the principles of Darwinism could be applied to humanity in many degrees. In Social Statics, Spencer argued that humanity was involved in the process of natural selection, with those ethnic groups who were naturally superior gained the edge to survive, while others were left destitute and/or relegated to lives that were inferior. Because of their genetic station, humanity followed the same pattern as all other participants in nature. The world was founded on the principles of survival and competition; Europeans were demonstrating their inherent superiority in the world, while natives or others who could not compete, their inferiority.
Social Darwinism’s Impact on Western Society
As a result, the government or any other entity/institution should not interfere in the workings of nature. According to these theorists, nature dictated the individual roles of those involved in the “progress” of the world. Thus, there could be no other more moral or realistic option for the world. There would always be “winners” and “losers”, within society and in the world itself. Thus, the social Darwinist was under no moral mandate to do anything about these apparent discrepancies or worry about the plight of social injustice or the general welfare of society overall. The fact that a more “free” market approach within the world naturally created such differentials, reinforced the notion that people who were poor or disadvantaged, as a result of gender, race, ethnicity or any other biological factor, were destined to be marginalized, as those who were superior in those categories would eventually “win” by living longer, by accumulating more resources at the expense of others and eventually by attaining more power in economic, political and social terms. This phenomena was not only reality but also preferable, as those who were more “worthy” in all realms of life, as far as their overall contribution to this progress, would be rewarded by a longer life, legacy and influence, while those who were “less worthy” would “naturally” contribute less and have a minimal impact, or in certain situations, be eliminated. Determining who was in the superior camp was often dictated by physical characteristics as portrayed by the image above.
The fourth contributing characteristic is the concept of nationalism. The French Revolution and the liberal ideas that followed this occurrence caused many ethnic groups and regional areas of world to advocate for their right to govern.
In the wake of this fervor, the ideology of nationalism fully emerged. By definition, nationalism is the concept of shared religious, culture, heritage or institutional ideology supported by strong group identification. Groups all over the world combined their desire for independence and right acquisition with the idea of loyalty to their identified group in the form of “national” interest.
Unlike the political ideology of the sixteenth and seventeenth centuries where the basic unit of patriotism was defined in correlation with a monarch or the term “kingdom”, this new trend advocated for loyalty to the group and the people who made up that political establishment. This was even the case when “true” representation or right acquisition was not apparent in these countries; it could even be argued that in many cases the idea of nationalism became a tool by which the upper class could gain support from the masses in order to hold the group together within a country.
Though this may seem radical, the idea of nationalism coincided with the rise of the masses’ rights to citizenry and the increase in their ability to self-determine their own lives—factors of liberalism. With the idea of nationalism emerging, the iconic symbols of that change became prevalent in the nineteenth century. This change in thinking included the introduction of flags, currency development, history and heritage reclamation, national sports team identification, and international competition. Though not all of these factors were particularly inherently negative, they did led to some problematic outcomes.
Nationalism and Ethnic Grouping
“Those who speak the same language are joined to each other by a multitude of invisible bonds by nature herself, long before any human art begins; they understand each other and have the power of continuing to make themselves understood more and more clearly; they belong together and are by nature one and an inseparable whole”
–Fichte
The ideas of nationalism can best be summed up by German philosopher and thinker Fichte. He described the concept of nationalist as the desire to find identify with one’s ethnic group or cultural heritage as a natural phenomena for all humanity, strengthening one’s own understanding of one’s self and building a more productive and stable society. Solidifying the ideas of “progressive or cyclical wholeness” found in German philosopher Hegel’s thought, Fichte epitomized this new trend in the early nineteenth century, leading to the emergence of nationalistic movements all over Europe, especially the German states.
The rise of the nationalistic movement in the world directly correlated with the rise of the industrial revolution and the need of states to expand in order to access much needed resources and territories. In order to gain connection to these resources and territories, countries began to see themselves in direct competition with other countries, employing the principles of social darwinism, where the strongest group would survive, while the weaker would be diminished. As the rise of nationalism increased across the world, the military became an important part of reinforcing one’s superiority and attaining the lands/resources that were needed. That is why it is important to explore later in this study, the ideology of imperialism. As ethnic and cultural groups began to identify with their own unique needs or desires, nationalism attempted to create a connection between these diversified groups, attempting to give these various interests some form of connection. By the end of the nineteenth century, it had become very apparent that a few countries had gained an advantage: Russia, Great Britain, France, Austria-Hungary, and an emerging new German Confederation. They were able to do so by formulating a strong ideology of nationalistic fervor and identification. As time would go on, this very strength would cause problems for each of these countries as they faced groups within their regions who wished to create their own form of nationalistic awareness.
As the countries of Russia, Great Britain, France, Germany, Austria and Italy followed nationalistic orientation, they also began to become more and more active in international affairs outside of Europe. The increase in European activity in Africa and Asia, and the influence in the Americas, grew as countries followed a policy of strengthening their own nations by creating empires that dominated weaker countries and people. This became known as the era of Imperialism. Imperialism, as it is referred to in the nineteenth century, was the extension of control or authority over foreign areas through political, economic, social and military means. As the modern world began to emerge, the policies of countries from Europe and the West built upon their roots of colonialism, going further into the interior of these areas, controlling regions directly and instituting policies that gave them dominance worldwide. As a result, the Western World began to set the tone for world production and order. The map above demonstrates the extent of the influence of Imperialism in the world by the year 1900. Notice which countries were in control of the largest tracts of territory.
The movement from colonialism to imperialism was aided by a number of factors. One, Europeans were motivated by the desire to prosper economically. Their intentions were clear–they strongly desired to gain wealth through the accumulation of resources from all over the world. They did this in a competitive manner, working hard to gain greater access to more and more materials and people by advocating for the assuredness that this control would continue by bringing their language, religion, customs, ideologies, and culture to these new areas in hope of spreading productive influence for all. In addition to this motive, Europeans desired to spread their nationalistic power as well. Adding other people to their empire, not only enhanced their political, economic and social influence, but allowed those imperializing to enhance their own defense should challenges from other powers arise. Third, in order to keep one power from gaining the upper hand, imperialism “righted” the balance of worldwide politics by insuring that those countries who were powerful stayed that way and kept the order for their own benefit. Last, as we will discuss later, Europeans also involved themselves in imperialistic activities, which by the way cost a good sum of investment, out of an obligation to bring the best of the western world, medicine, religious beliefs, proper morals, etc., to these natives in hope of making their worlds more efficient, more advanced and more civilized. This is referred to as the “ideology of the empire or The White Man’s Burden.
The Rise of Western Power
The European powers divided up the world by 1914 or the beginning of World War I. The white areas are those tracts that were at this point considered independent while the colored areas revealed directly controlled areas as well as home countries. One important factor to remember is that the white areas, though they may be technically independent, did not mean that they were solely operating apart from European or Western influence at this point. The Arabian peninsula is a good example of this, as both the Ottoman Empire and Britain had a strong influence on the perspectives and policies of the Arabs during this time period. As we will discuss at the end of World War I, the super powers discussed in this power point ended up in many ways dictating world policy through the League of Nations and later the United Nations because of their significant stature, making or breaking countries depending on how it influenced their interests.
As these areas were dominated by outside powers, the evolving theme of imperialism took on an additional component. Europeans and Americans began to claim that it was their obligation or duty to aid in the better development of the natives that they had conquered or controlled. Though the poem The White Man’s Burden can be interpreted in a variety of different ways, it has become the symbol of the attitude of the era–the justification for continued European or western direct control and even indoctrination, in the wake of imperialistic profit-making.
As Imperialism gained ground in the world, Europeans and Americans relied upon the by-products of their technological gains through the Industrial Revolution to reinforce their superiority. Firearms, ships, extensive networks of railroad, medicines and communication advantages, helped the west maintain their control. Thus the system that was devised by Europeans and Americans, was further reinforced by the other modern trends.
Nineteenth century ideologies produced enormous changes for the world. The political changes of liberalism, the nationally and socially based revolutions of this era, as well as the expansion of nationalistic intention through the outlet of imperialism, caused the world to be dominated by western thought and conception. Business, military exploits, technology, even culture and custom in most areas of the world were shaped by those who were gaining power as a direct result of these new trends. The world was moving towards modernity with many positive outlets: increased research in life-saving medicines, enhanced individual world knowledge, and an emerging middle class who benefited socially by their newfound status. Along with positive outcomes, there were negative outcomes. Outcomes led to extensive competition, the abuse of many people all over the globe, and the radical change of mindset from self-sufficiency production to varying shades of consumerism. Perhaps most notable negative outcomes became worldwide conflicts and the influence of these events on human life and the planet.
I have covered contributing factors to our understanding of capitalism and democracy and we can begin to see the components that have played a significant role in the formulation of world issues. At the core of the development the western ideology, which has created some troubling prospects and significant benefit. However,at times the system has turned a “blind eye” to important global issues such as pollution, individual human rights violations, poor working conditions, unfair trade practices, warring conflicts, and incredible political and economic corruption.
In the twentieth century, the extension of the ideologies seemed to be reinforced by a prevailing economic solution that advocated capitalistic practice. Capitalistic practice increased individual and market freedom to such an extent that the sole responsibility of institutions within the modern, developing society was to produce profit. This was best exemplified by the work of Milton Friedman in his book Capitalism and Freedom (1962). Friedman argued that the core of American capitalism emphasized the belief that institutions should be concerned in only promoting profits while other entities within society would determine proper morality or societal leadership. For Friedman, true economic freedom was directly linked to political freedom. He believed that the only responsibility of leaders of these institutions lay in correlation with the lawfulness of their decisions and the institution’s fiduciary outcome for its shareholders. He wrote, “salaried executives of a public corporation by implicit legal contract have a fiduciary responsibility to the shareholders of the firm that gives them the right to use corporate resources only to increase the wealth of those stockholders by seeking profits”. More and more institutional leaders became convinced that the desire for profit was foremost and perhaps all that mattered. They believed stockholders were less likely to be concerned with the moral ramifications of decisions and adamant about financial outcomes. Accumulation of wealth had become their primary motivating factor. This ideology infiltrated institutions and shaped policy for years. Watch the documentary Enron: The Smartest Guys in the Room and The World of Monsanto to see where the lack of responsibility was nurtured by a system built upon these conditions.
Over the decades, as world markets expanded certain trends have emerged. The belief that capitalism could not be economically inclusive became obvious. In order for capitalism to work well, it must promote and “capitalize” on those who are most disadvantaged. Recent trends also emphasized this conception; a formulation where “winners”, either within society or on the global level, are created often at the expense of “losers”; or people gaining what they deserve based upon the market. These conclusions were often been based on the assumption of equal opportunity and market fairness qualifiers. Some experts would argue that these two factors are disputable.
Another trend within the system is the issue of “northern” and “southern” countries. This emerging phenomena continues to be a problem for leaders as they assess the moral climate of our world. Underdeveloped countries and regions created a disproportionate trade balance, limited global market profitability and technological access restrictions.
Countries in the “south” have been dominated by “northern” regions. The “north” has been in control of financial policy and therefore able to dictate political and social policies to their advantage. This has created a situation where “underdevelopment” has been an economic advantage to the “north”. Whole regions were settled and developed to provide resources to the “north.” As trade has expanded, some of these goods have made their way to other underdeveloped countries–but those items are still controlled by institutions in the “north.”
The “north” excels in technological advances and has the power to institute its will on those countries in the “south”, leading many experts to argue that “predatory” capitalistic policy has severely damaged the possibilities of “southern” regions to be economically sustainable and to contribute strongly to our current world economic system. In the pursuit of the resources of “southern” regions, environmental abuse and exhaustion continues at a pace not seen.
Consumption of resources is further fueling these issues. In the twenty-first century, there were increased movement towards greater and greater resource acquisition and use. One only needs to pay attention to which regions are increasing their economic consumption and the economic factors are creating that movement to notice where most of the resources are created. Traditionally, the United States and other western powers have been the greatest consumers, however, China and India are now impacting the global market in substantial ways. The documentary Black Gold is a great demonstration of how the commodity of coffee demonstrates how resource allocation and control play a part in this worldwide system (you can access it through Hulu or NetFlix).
Abuses of the System
As described earlier, the impact of societal shifts to more technological advances require greater resource acquisition, which has only heightened this problem. As more resources are demanded, “northern” regions have turned to a variety of unethical practices and made questionable decisions to protect their interests in their own countries and in the areas that “southern” countries. Within societies and on a global scale, we are seeing the differential increase between the wealthy and the poor. Many experts are argue that the trend of the “stratification of social classes” is an increasingly dangerous prospect as the reality of economic solidity of the middle class seem to be eroding.
In some countries, a concept of “middle class” had never existed, thus weakening the social fabric of societies. Perhaps most telling for western countries can be found in the commentary of psychologist Oliver James. His recent use of the term “affluenza” has become a popular description of a new twentieth-first century phenomena that has culminated in all of the trends studied here. The psychological belief that “affluence” is the key to happiness permeates our societies. The competitive need for more, coupled with the belief that extravagance is preferred, has infiltrated our mindsets to such an extent that we are unable to even conceptualize any other form of living possibilities. We have, as James states, caught an “economic perception” sickness that ironically offers us benefits while creating a risk that we fail to see the dangerous by-products that could have serious consequences for everyone. Finally, these dangerous trends have “blinded” or diminished the positives of democratic practice and capitalistic theory for many people, leading many to turn to alternative systems that are potentially immoral. In short, many experts have argued that the outcomes of our unhealthy practices on a global level, have created gross misunderstandings of what democracy and capitalism fundamentally are supposed to be.
The controversial documentary The End of Poverty in 2008 covers a number of these issues.
As we trace the development of these ideologies and historical trends that resulted in the creation of the western world through the lens of capitalism and democracy, one can see that the world has a number of problems. The point is not to point out these issues but to argue that there are solutions for these problems and that ethical leadership seems to be the place to start. As experts develop solid advances and policies to move people toward “betterment,” we must promote good and ethical determination. This is vital so that progressive ideas can produce productivity while creating a world community that builds and cultivates moral values promoting peace, longer and healthier lives, and greater fairness and justice for all. To do this, we need to cultivate a resurgence of strong ethical leadership. Education is at the root of ethical leadership. We, as a world community, need to be willing to take a “real” and “difficult” look at the world to see that both the “good” and the not so “good” trends. We don’t to do this as it demands constructive time and also can severely change the way that we perceive our world and ourselves.
For westerners in particular, it can disrupt our concept that everything is in good stead and that the “western” reality is the world reality. This acknowledgement through education and greater awareness, allows us to see more clearly how we might fix problems and is often the task of the ethical leader to accomplish. It has become increasingly more apparent that our world needs to work against the historical ideological inclination that emphasizes the notion that prosperity and success as directly linked with reinforcing “selfishness”. Rather, we need to learn to temper our interests with the interests of others and recalculate a new equilibrium that works towards a new definition of “community”. This new formulation must reconfirm the good in “self-interest” as we look out for ourselves in conjunction with others; through this we fully come to realize that our prosperity and success is intrinsically linked with those around us. The realization must include a moral response to others’ needs, as defined and upheld by strong leadership. This will allow us to redefine the concept of “community responsibility” and to link moral ideology with a reemphasis on the capitalistic system positive outcomes. Ethical leadership will help to move our society away from this concept and practice of “predatory” capitalism, while focusing on the solid understanding that profits and proper ethical behavior can work together for the good for all people no matter what their location.
Watch: Dr. Muhammad Yunus won the Nobel Peace Prize for his founding and work with the Grameen Bank in Bangladesh. How does his work perhaps reflect true components of a more moral approach to capitalistic practice?
The Need to Re-evaluate Adam Smith’s Works
Adam Smith in A Theory of Moral Sentiments points out that we should focus moral values as we move towards greater ethical leadership. Smith’s analysis and assessment points out the fundamental values central to true capitalistic practice. He argued the key to moral and productive capitalism is found in one’s adherence to the concept of justice or just treatment for all. This includes long term planning which takes into consideration careful stewardship of finances and resources. This includes the willingness to share benefit and goodness with others and to develop a strong discipline of one’s willingness to do what is “Right”. These virtues were understood to be important to the overall prosperity of the economic system and have enormous moral benefits for all of society. Then, we can move forward with moral and economically prosperous leadership. The idea of social responsibility is taken further in a discussion by Jess Jackley who discusses the importance of adhering to Smith’s chief virtues of justice, prudence, benevolence and self-command.
How do we uphold true capitalistic principle?
When we look at capitalism and democracy from the standpoint of their true intentions–to promote the betterment of those who participate in the systems above–we come to understand the importance of ethical values and the need to return to those values in order to “right” the “wrongs” that have infiltrated both ideologies. Then, we can make strides forward.
In an analysis Smith’s work, Younkins write in Adam Smith’s Moral and Economic System, that true capitalism must be built upon the concept of the “prudent” individual who demonstrates self-control and cultivates habits that emphasize unselfish inclinations. This reciprocity of exchange and the moral concern focuses on a greater concern, that “free-market” systems prosper as it is understood that one’s prosperity is directly intertwined with the prosperity of others.
Freedom in political, economic and social terms reinforces the important moral concept of “rights and responsibilities” both in the individual and collective ideology.
The lower virtue of prudence guides the virtuous man in the pursuit of his own well-being. The commercial man is part of virtuous man and performs his proper function when he attends to his own happiness by pursuing fundamental goods such as property, health, and reputation. In part, he desires wealth for the approval it will attain for him in the eyes of other men who gain pleasure when they see him as successful and productive. A prudent man demonstrates self-command when he denies himself present pleasure for future pleasures that he believes will be greater. A prudent man’s habits of economy, industry, attention, discretion, frugality, and application of thought are self-interested and praiseworthy. A prudent man realizes that production is good, that labor is more productive when it is more specialized, and that the more people involved in mutual exchange, the more specialized each person can be.” (Younkins, 2005)
In conclusion, experts relay that if we curb many of the potentially destructiveand unethical trends and habits that have developed in the world, we need to return to the core of what these two important system concepts were built upon–the notion that the responsibility of proper moral conduct is important and that ethical leadership is the key in helping us redefine how we ought to live, making a difference in our collective future.
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