Let’s end our subordination to endless profit and growthNovember 2009
We can no longer assume unfettered capitalism is for the public good. Change is needed, says David Loy
Despite all its benefits, our economic system institutionalizes greed in at least two ways: it inculcates and enforces the truisms that corporations are never profitable enough and people never consume enough. To increase profits, we must be conditioned into finding the meaning of our lives in buying and consuming.
Consider the stock market. It functions as an ethical ‘black hole’ that dilutes responsibility for the actual consequences of the collective greed that now fuels economic growth. On the one side of that hole, investors want increasing returns in the form of dividends and higher share prices. That’s all that most of them care about, or need to care about. On the other side , however, this generalized expectation translates into an impersonal, but constant, pressure on corporate managers to maximize profitability and growth, preferably in the short run. Globalization means this emphasis on profitability and growth is becoming increasingly important as the engine of the world’s economic activity. Everything else, including the environment and the quality of life, tends to become subordinated to this anonymous demand for ever more profit and growth.
The generative idea of capitalism is capital: using money to make more money. The other side of capital investment is debt. A capitalist economy is one that runs on debt and requires a society that tolerates large amounts of indebtedness. But the debt is always bigger than the original loan, since those who invest expect to get more back than their original investment. This is another way of understanding the general pressure for continuous growth and expansion – because that is the only way to repay the accumulating debt. The result is a collective future-orientation: the present is never good enough; the future will (or must) be better.
Who is responsible for this? The system has attained a life of its own. We all participate in this process, as workers, employers, consumers, investors and pensioners, with little if any personal sense of moral responsibility for what happens. Such awareness has been diffused so completely that it is lost in the impersonal anonymity of the corporate economic system. In other words, greed has been thoroughly institutionalized.
This situation calls for a double response. The system works by pooling and manipulating individual greed, so we need to investigate and transform our own personal motivations. However, institutionalized greed also requires an institutional response. The recent economic crisis highlights the need for strict supervision, but something more may be necessary: perhaps corporate charters need to be restructured, so that corporations exist primarily because they serve the public good, rather than private gain. We can no longer assume that pursuing the latter also promotes the former.
David Loy is chair of ethics, religion and society at Xavier University in Cincinnati, US
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