SUSTAINABLE MARKET ECONOMICS

Sustainable Market Economics



Sustainable Market Economics

“Let Capitalism Rip”: Ethics and Morality

Free Markets' Perspective

The concept of a “Free market” was given by the Spanish and Peruvian lawyer and economist, Juan de Matenso in the sixteenth century. A free market is defined as a market, where prices are set freely without outside interference, and other external factors on the basis of supply and demand. The idea of a free market is closely linked with the economic policy of nonintervention, according to which, government intervention in the economy should be minimal. The role of the government is to protect the rights, as well as the establishment and maintenance of the tax system, which ensures the existence of the state (Crane & Matten, 2004, pp. 166-179).

In terms of political economy at the opposite of free market economy is a planned or command economy, where decisions about production, distribution and pricing are the prerogative of the state. Mixed economy is an intermediate option between a planned economy and free market. Government plays an important role in the Free Market; it is responsible for enforcing the law by punishing those who disturb the freedom of others, especially regarding property rights and enforcement of agreements, i.e. contracts.

Ethics and Morality of the Allegation

“The best imaginable force for improving human wealth and happiness” (David Cameron Jan 2012), this is how the Prime minister describes a capitalist economy, while supporting the 'let capitalism rip' allegation. David Cameron talks about a “socially responsible and genuinely popular capitalism” (Newstatesman.com), in his allegation for letting the capitalism rip. According to Cameron, the best way out to recoup with the emerging crises does not only mean making payments for the deficits and encouraging growth, but he recent times calls for a concerted approach to make a commitment towards enhancing the sustainability of the societal markets. In this perspective, Cameron supported the view that markets should be free and fair.

In the perspective of a free market or capitalistic thoughts on a “free” market, the allegation can also be evaluated in the light of the theories and models presented by Adam Smith and Karl Marx. The mode of capitalism, as is supported by Cameron, does not take into account the fact that a free market would possible lead to an environment of market inequalities (ww.newstatesman.com). Karl Marx also showed that self-interest of the people would lead to the failures of capitalism in which it would be necessary to create justified market economics where each member may benefit equally (Bowie, 1991, pp. 17-41).

In these days of economic crisis, there is no shortage of voices blaming capitalism and therefore, the markets of the world is suffering, while capitalism, understood as an economic and a social order, is being demonized. However, instead of condemning outright capitalism, we must reform it. In this regard, the allegation is worth some comments. First, there is not a prosperous country whose economy is non-market. Second, it should not be forgotten that technological progress is the engine of economic ...