The Economy Vs Ethical Capitalism

Published on 8th November 2010

The economic sphere is neither ethically neutral, nor inherently inhuman and opposed to society. It is part and parcel of human activity and precisely because it is human, it must be structured and governed in an ethical manner. It is of prime importance to foster in economic actors a sense of obligation to serve the greater good rather than just shareholders.
Stefano Zamagni, an economics professor and Vatican consultant argues that capitalism as is "obsolete" and must be replaced by a new form of market economy whose driving force is not the maximization of profits. “Capitalism,” Zamagni says in his recent presentation in the Vatican, “is an old idea, where the market was supposedly morally neutral ... where efficiency becomes an ethos. If we can instead incorporate the idea of the social element into the economy, the market itself becomes a force for civility.” 

He denounces the modern corporate business model, taking on the global Wall Street and its super bonuses, which lead to financial speculation and labor outsourcing. "In recent years, a new cosmopolitan class of managers has emerged, who are often answerable only to the shareholders generally consisting of anonymous funds which de facto determine their remuneration," he writes.

“Profit is useful if it serves as a means towards an end. Once profit becomes the exclusive goal, if it is produced by improper means and without the common good as its ultimate end, it risks destroying wealth and creating poverty.  We should not be victims of globalization but rather its protagonists, acting in the light of reason, guided by charity and truth."

In one of the more provocative passages, He says that the global recession requires not only a reform of the U.N. and international economic institutions but also the urgent need of a true world political authority ... universally recognized and to be vested with the effective power to ensure security for all, regard for justice, and respect for rights.

While critics, particularly in the U.S. are likely to shun such an idea as a utopian sort of "world government," some world leaders, like French President Nicolas Sarkozy, have been advocating since late last year for comprehensive and binding global regulation of financial markets.

In the final section, titled "The Development of Peoples and Technology," Zamagni challenges the modern gospel of progress for progress's sake and calls on individuals to take responsibility to do the right thing as both a moral and a socioeconomic imperative.

"True development does not consist primarily in 'doing.' The key to development is a mind capable of thinking in technological terms and grasping the fully human meaning of human activities," he writes. "Even when we work through satellites or through remote electronic impulses, our actions always remain human, an expression of our responsible freedom. Technology is highly attractive because it draws us out of our physical limitations and broadens our horizon. But human freedom is authentic only when it responds to the fascination of technology with decisions that are the fruit of moral responsibility." Even more than loose credit, Zamagni clearly blames loose morals for our economic ills.
By  Simon Munjama
(MBA) Strategic Management student, Kenya Methodist University

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