The Moral Psychology of Capitalism

by Andreas Saugstad

The economic system dominating the world today is capitalism. When the Berlin Wall fell and Gorbachev started his Perestroika in the 1980ies, something joyful happened: the world was released from oppressive communism and an oppressive use of ideology. At the same time, however, a side-effect of this seems to have been a renewed focus on capitalism as an economic and social order, and the Americanization of the world could continue at greater pace than ever. Capitalism is now not just an American phenomenon: we find it more or less in Europe, Russia, China and South America. How does capitalism affect us? What is its impact on ethics and morality? What is the relation of capitalism to moral psychology?

What is Capitalism?
“Capitalism” according to my Oxford English Dictionary is “an economic system in which the production and distribution of goods depend on invest on private capital and profit-making”. Capitalism is a social order where profit regulates the financial life and also the social structure. The opposite of capitalism is communism. In communism and socialism the economy is planned, i.e. the government takes care of investment, and the distribution of goods depends on principles of equality. Capitalism, on the other hand, is based on free market, free trade and free initiative. Encyclopedia Britannica defines capitalism as follows:

“capitalism – also called Free Market Economy, or Free Enterprise Economy, economic system, dominant in the Western world since the breakup of feudalism, in which most of the means of production are privately owned and production is guided and income distributed largely through the operation of markets.”

Both the Oxford Dictionary and Britannica define capitalism in relation to economics, and this is of course essential in relation to this topic. When Karl Marx criticized capitalism, he proposed an alternative understanding of economic systems. But at the same time, capitalism is much more than a system which can be described in terms of economics and finance. Capitalism is a philosophy; capitalism is an ideology; capitalism is a social order.

Capitalism has a sibling in political philosophy called liberalism. Liberalism is the philosophy defending a minimalist state, as little governmental interference as possible and freedom of the individual. When certain basic rights such as the rights to private property and physical safety for individuals are protected, the government and its laws should not interfere, liberalism says. When this philosophy is projected into the sphere of economics, capitalism naturally evolves as an idea: free enterprise and freedom of the individual become the ideals for business and production.

Material and economic conditions de facto shape our thoughts and our society. Capitalism interferes with belief-systems, politics, religion and -I think -our moral psychology.

Critics of Capitalism
As Harvard professor Cornel West recently said in radio program that “the top three individuals own more than the bottom 48 countries”. Whether you defend capitalism and neo-liberalism or not, it is a fact that this is a result of decades of capitalism in the world. The salaries in poorest countries in the world are 60 times less than the average salaries in the richest countries. Every day 34,000 children under the age of five, die of hunger and preventable diseases, while Bill Gates wants to enlarge his house which is more than 11,000 square meters. Such inequalities have made thinkers like Noam Chomsky, Johan Galtung, Ralph Nader and Subcomandante Marcos to protest against capitalism. Galtung has investigated the deep culture of capitalism -for instance the collective unconscious of the American society. Still it must be said, the critics of capitalism (such as many Marxists) tend to focus on structural aspects of the system, not that much on its psychological aspects. While the structural aspects of any social order should be investigated and analyzed, I shall here focus on what I call the “moral psychology of capitalism.”

Disorders in Moral Psychology
Moral psychology is the study of human psychology in relation to moral life. It is a subject on the border between psychology and philosophy, and it studies emotions, intentions and practical judgment and its relation to moral development and ethics. But some of this discipline is strictly speaking devoted to immoral psychology: how psychology can be perverted and malfunctioning, and how this can affect our moral competence and performance. What I propose, is to study the effects of capitalism on our moral psychology and the relations between the emotional and motivational aspects of human life and capitalism. Many years ago Bertrand Russell proposed that one scientifically should study the relationship between hunger, suffering and political rebellion. In a similar way one may study how capitalist societies influence the morals and individual psychologies; something I here do by philosophical speculation, which also can be supported by systematic empirical sciences. (We need both!)

In one sense capitalism may just be an expression of our natural tendencies; on the other hand it may increase certain motives and feelings. There may be a mutual relationship between social structure and psychology, and the causal relationship between these two factors may be complex. Nevertheless, I do think it is possible to both speculate about this relationship as well as study it systematically through the methods of social sciences and psychology. Many people are, perhaps without thinking of it, affected by the deep culture of capitalism and the psychology of an increasingly competitive world. Let me here suggest some psychological traits I do think may be associated with capitalism.

The Virtues and Vices of Capitalism
There are, as I see it, both virtues and vices of capitalism, but I do think there are more vices than virtues. The main virtue is that free market reinforces initiative. Look at America: in this land of the free market, there is so much initiative, in many areas of society, while we do find such drives all over the world, perhaps we do so especially in the USA. One might wonder if capitalist societies may have tendency to foster ambitious individuals with high achievement. The American capitalism may provide a social framework for creating dynamic personalities, something the US has never lacked.

Still there are some vices and dark sides of capitalism. Here are some I think exist, based on my folk psychology and observations:

Elitism. Elitism is the view that some people belong to elites while others do not. Elitism order people in in-groups and out-groups: Either you are in or not; either you are a Harvard alumni or you are not, either you have certain status symbols or you don’t. In capitalism, there is no welfare system which secures an egalitarian social structure, thus capitalism directly or indirectly supports social hierarchy. If we believe that all human beings are of equal value, how can we accept the elitism of capitalism? When the economic differences in a society are so great as in the USA, people want to move upwards on the social ladder. This seems to create elitism, because it is when you belong to the elite that you can have privileges and material comfort. Elitism says better-than not being-with; it is a most destructive value. Elitism is one of the most subtle kinds of evil that exist, it means looking down on other people because of lack of money, social status or lack of education. Elitism is a key trait of racism, fascism and nationalism, and if I am right in claiming that capitalism reinforces elitism, this in itself gives reason to be skeptical to capitalism.

Egoism. Egoism means being selfish on dispense of others. Capitalist societies are based on free markets, and this freedom implies survival of the fittest. While I cannot back my claim up with any conclusive evidence, I do not think that capitalism itself reinforces truly altruist behaviour. In many cases we may be prosaic because it is for the benefits of ourselves in the long run. But authentic altruism may decrease when a society becomes hyper-capitalist. Every man must fight for himself and his life.

Competition. Therefore competition becomes a form of life. In a capitalist society, a business dies if the competition is too strong. This also goes for the American university system: here “publish or perish” is the law, and the survival of the strong is praised. In a recent article published in ZNet, Susan George of ATTAC in France points out that the central value of neo-liberalism (which is the philosophy of new capitalism) is competition. Competition is important for neo-liberalists because it separates the sheep from the goats, Susan George says. So competition may be central to making a non-egalitarian society and promote the first trait I mentioned -elitism. The Chinese philosopher Lao Tzu ended his Tao te-Ching with these words: “Above all, do not compete”. I think this is wise, as brutal competition is the opposite of friendship, love and mutual respect. But to promote non-competitive values, we need a society which provides a framework for such virtues.

Taking possession of. The French philosopher Jean-Paul Sartre worked on the philosophy of interpersonal relations. One his observations was that we as human beings often have a tendency to try to get power over other human beings. Instead of seeing the Other as an equal human being, we try to impose our own mind on the other, so that a mental, interpersonal power-structure can exist. This becomes a kind of master-slave relation at the psychological level. In a competitive, elitist society I do think such relations are more easily created than in a slightly less competitive society.

Dehumanization. Still, this is not the worst scenario. In the case of modern globalized hyper-capitalism, where profit becomes the only value, people are not even competed with, they are are overlooked qua human beings, as when workers in Sri Lanka are paid 27 cents per hour at Nike’s factories, or young workers in China work 16 hours a day, in practice treated as slaves. This is a case of profit over people, as Chomsky might have said. The Other simply disappears.

Virtues Repressed by Capitalism
Philosophers have come up with many suggestions as to what defines true morality. Many of these theories are interesting and can teach us something important about ethics. As I see it, the main virtue of morality is love. Love can be discussed and thinkers from many different cultures may emphasize different aspects that are important when we try to understand the nature of love and morals. But some key features of love are: compassion, empathy, equal respect for all human beings, as well as caring about others, not just oneself. As I see it, the features of capitalist psychology described above, seem to be opposite of love. As Bell Hooks has said, it is difficult for love to exist in a capitalist society. How can elitism promote human worth? How can egoism be morally approvable? Should we not collaborate rather than compete? Can true friendship live in a social reality with elitist structures? Friendship and authentic being-with-others is based on dialogue and discourse, not competition within a social hierarchy.

It seems to follow almost as a logical truth, that the vices of capitalism are opposed to love and being a moral human being. If this is true, this social structure should be criticized. The weak will suffer in a competitive society ruled by money. Jesus told a famous parable about the Good Samaritan. I think an important lesson to learn from this parable is that love has to do with how we treat those who suffer and the weak and less fortunate. But capitalist societies don’t seem to care enough for the weakest. When Bush now is doing a $1,200,000,000,000 tax cut, the practical consequences will be less money for social security, free health care etc. It may create a raw society and decrease the public conscience of love and solidarity. Some liberalists and capitalists say that they promote solidarity and aid for the poor, but that they think this should be done through private initiative. Well homo capitalismus, my news for you is that this has been tried out in America for years and years, and it doesn’t work. People go to hell with a bottle of cola in their hand, what they need is radical changes. I do of course not want to generalize, but those who today promote radical programs of love and solidarity are mostly leftists or social democrats, not capitalists.

Conclusion
Capitalism does indeed have virtues, but as I see it, the vices override the virtues. As Johan Galtung says, the American capitalist order may be labeled “structural fascism”, a system of “structural violence”. Fortunately, the American society has many other different values, which makes many of the people very pleasant. (This is also such a pluralist society that many kinds of people and ideals exist side by side, some people are very much marked by capitalism others perhaps much less). The psychology of Wall Street I do not like, but the America of Ralph Nader, Noam Chomsky, Martin Luther King jr. or Dissent magazine I admire enormously. The Hollywood narcissism is dangerous, while those American scientists working to find treatments of cancer, AIDS and other diseases should be respected very much. Nevertheless, the psychology which has started to penetrate business, the media, entertainment and much of the academic world today, the result of a “capitalization” and Americanization of the world, gives reason to look for alternatives.

The alternative is not Soviet communism as some may think. Many alternatives to free trade hyper-capitalism exist: modified capitalism, welfare states -so-called social democracies, or versions of non-totalitarian socialism. The welfare state system, something in between capitalism and socialism, has been tried out with good results in Scandinavia and Canada. My political philosophy is a leftist version of social democracy: a welfare system where we take care of the weak and poor as well as give the strong and progressive space and opportunity to develop their skills and initiatives. In this period of Bush and new free market liberalism we should reflect upon our choice of political leaders and ideologies. Politics and economic systems do not just affect social structures and society at large, but also the human deep psychology.