In days of stability, I had little desire to bother with conforming my mind to “econo-logic” (as my University of Sydney lecturer termed it), but now things are less certain, it is natural for me to seek a better understanding of our economic system - both how it operates and why it is in trouble. I presume I am not the only one with this desire!

Looking to get a better understanding of the current financial crisis, I had another look at Alan Saunders’ excellent Philosopher’s Zone program on ‘Bailouts, capitalism and the financial markets‘. The program looks a little at capitalist philosophy - or the philosophical underpinnings of the capitalist system - and provides a good framework for further research into just what is going on with the global economy.

John Armstrong, an interviewee on the program, clarifies capitalism as the system of organising the pursuit of money and the delivery of goods and services, as opposed to a complete vision of life.

“I think that for some time people have had a tendency to want to blame capitalism for ills in the world. One looks around the world and says, ‘Look, it’s a pretty bad place and lots of awful things are happening. Maybe the fault lies with the kind of economy that we have.’ Perhaps there is some truth in that, but I take the view that the ills of the world stem from more psychological factors rather than, say, the fact of competition or that businesses work by borrowing money and investing it and trying to sell things for people. I don’t think the problem is that we buy and sell, that we try to make profits, it lies in a completely different place, which are ‘What are the kinds of things that people want? What are their priorities? What do people think is most important to them?’ And capitalism in a sense is incredibly responsive to the pervasive morality of a society. We should see ourselves in a sense of deserving the economy that we get.”

Anderson, J. (2008) on Bailouts, capitalism and the financial markets, Retrieved 15 November, 2008 from http://www.abc.net.au/rn/philosopherszone/stories/2008/2384177.htm.

The highly pertinent question, at least for me, then, is whether the operation of capitalism itself influences the pervasive morality of society. Is this a feedback loop? I would contend that it is, and that capitalism is designed to draw more and more members of society into this loop. If people are rewarded for seeking profit, they are certainly more likely to “believe” in it as a good thing for themselves and their families.

But does the system work? What role should governments play in the operation of a capitalist system? Perhaps it is easiest to adress these questions by looking first at a recent example in the Australian political consciousness: the Howard government’s WorkChoices.

ABC’s Radio National recently aired a Perspective on The Conservative Tradition in Australia, presented by Norman Abjorensen, Lecturer in Political Science at the Australian National University. Howard, according to Abjorensen, is a conservative iconoclast. His very conservative WorkChoices legislation was designed to bring the “free up” the job market by decreasing Government involvement in salary agreements and by sidelining collective bargaining. Abjorensen said the policy was clearly designed to benefit the “haves” - the employers - and the “have-nots” revolted, resulting in Howard’s 2007 election defeat.

One of the reasons why there was so much internal opposition to John Howard’s rise in the Liberal Party in the 1980s was that many of his fellow conservatives were alarmed at his perceived extremism, and concerned that his political passions if given rein would rip away the carefully constructed veil between the Liberal Party and the money power it represented.

Ultimately, they were right. WorkChoices was a glowing example of legislation that benefited the haves to the obvious detriment of the have-nots - something conservatives had been at pains to disguise, if not avoid, for more than a century.

Abjorensen, N (2008), The Conservative Tradition in Australia. Retrieved on 15 November from http://www.abc.net.au/rn/perspective/stories/2008/2408871.htm

Abjorensen details the tensions between those who carry power within the capitalist system - in this case, the employers, and those with little power - employees. Let’s put aside for the moment the very real debate about how factually accurate that statement is, it is enough for us to know that this was the perception of the employees, or the people Kevin Rudd cleverly called “working families”. In this case, the working families perceived themselves to be at risk from a deregulated labour market, and showed Howard the door at the election.

Perhaps there is distrust of corporate power. The above example indicates that people grasp that concept, despite general politcal apathy. Certainly, in wake of the subprime crisis, people are bandying the term “corporate greed” about rather freely.

I need to think more on this.

P.S.
Here’s George Bush’s defence of free market capitalism: http://www.abc.net.au/news/video/2008/11/14/2419459.htm, as if he’s doing it any favours.