:Analogies for Sustainable Development/Capitalism as a Dialectic of Dynamism and Decency

Subject classification: this is an economics resource.

“ Capitalism is perhaps the most consequential thing humanity is thinking about these days, as we witness the astonishing escape from poverty of billions of people in a single generation, the spectacular frauds and blunders that nearly led to a global economic collapse, and the precipitous rise in income inequality occurring within many nations. Any country that gets capitalism right will prosper; the costs of getting it wrong are immense. ” — Jonathan Haidt, Stories About Capitalism

Overview

Is capitalism all about dynamic innovation and growth, or is it about personal greed antagonistic to basic human sociality and decency? Is capitalism about liberation, or exploitation?

Story 1: Capitalism is Exploitation

Once upon a time, work was real and authentic. Farmers raised crops and craftsmen made goods. People traded those goods locally, and that trade strengthened local communities. But then, Capitalism was invented, and darkness spread across the land. The capitalists developed ingenious techniques for squeezing wealth out of workers, and then sucking up all of societies’ resources for themselves. The capitalist class uses its wealth to buy political influence, and now the 1% is above the law. The rest of us are its pawns, forever. The end.

Story 2: Capitalism is Liberation

Once upon a time, and for thousands of years, almost everyone was poor, and many were slaves or serfs. Then one day, some good institutions were invented in England and Holland. These democratic institutions put checks on the exploitative power of the elites, which in turn allowed for the creation of economic institutions that rewarded hard work, risk-taking, and innovation. Free Market Capitalism was born. It spread rapidly across Europe and to some of the British colonies. In just a few centuries, poverty disappeared in these fortunate countries, and people got rights and dignity, safety and longevity. Free market capitalism is our savior, and Marxism is the devil. In the last 30 years, dozens of countries have seen the light, cast aside the devil, and embraced our savior. If we can spread the gospel to all countries, then we will vanquish poverty and enter a golden age. The end.

Analogy Map

Jonathan Haidt describes two parallel narratives of the history of capitalism. Each short story contains an analogous mirror opposite narrative to the other reflecting how moral psychology shapes our beliefs and values.

Capitalism as Exploitation	Capitalism as Liberation
Work was real and authentic, farmers were independent	Work was hard and tedious, Kings and Feudal Lords took all the wealth
Then capitalism was invented and pollution darkened the skies	Then capitalism was invented and the liberation began
Capitalists became more skilled at extracting wealth from workers	Property rights, the rule of law, and free markets turns on a switch in people's hearts,people want to work and create
As unions exposed the flaws of capitalism, governments provided some protections	Countries that embraced centralized planning stagnated as liberal democracies florished
Then the capitalists fought back through anti-union regulation	Despite prosperity, economic leftists continue to fight against capitalists
The rich get richer, the poor get poorer, our planet gets hotter	The egalitarians want equality even to the point of stagnation and poverty

Quote Bank

"And as market values expanded beyond the marketplace, and started taking over medicine, education, and other domains of life, many people felt lamented the crass and degrading materialism of modernity. So this is our challenge for the 21st century: We celebrate the fact that the wide embrace of free markets has lifted more than a billion people out of poverty.

Yet we know we can do better. If we can strip away the anger, the worship, and the ideology, we can examine capitalism and its ethical challenges more openly. We can see that the supply chains that keep our shelves stocked have their origins in the deadly sweatshops of Bangladesh. We can measure the polluted air and empty oceans we are bequeathing to our children. And we can have a more nuanced discussion of equal opportunity, particularly in America where schools are funded by local taxes and money buys your children a better starting line.

So let us be grateful to the butcher, the brewer, and the baker for the bounty they bestow upon us, even when they are corporations. Let us look back in awe at the political and economic changes that brought us from the first story to the second. And then let us work together to write the third story, a story that must draw on insights from left and right, and from secular thinkers and religious leaders.

Is there a story about capitalism that could be embraced by Pope Francis, His Holiness, and the rest of today’s panelists? Let’s find out." -Jonathan Haidt

Further Resources

• Three Stories About Capitalism. Jonathan Haidt at Zurich Minds. YouTube: https://www.youtube.com/watch?v=iOu_8yoqZoQ

References

Analogies for Sustainable Development