In yesterday’s edition of The Age, Ross Gittins referred to various reflections on the moral flaws of capitalism by Dr Michael Schluter:
- Capitalism pursues an exclusively materialistic vision, “unrighteous mammon”.
- Capitalism offers reward to lenders without responsibility.
- Capitalism limits the liability of shareholders, allowing debts to remain unpaid on insolvency.
- Capitalism disconnects people from place.
- Capitalism provides inadequate social safeguards.
Dr Schluter’s first and last points are undeniably correct. Capitalism and Christianity are clearly not the same thing. A follower of Jesus cannot be a lover of money. Capitalism does not care about the weaker members of the community, and some form of intervention is required to provide adequate social safeguards. The other three points are more debatable.
A typical capitalist finance system does allow lenders to receive interest without becoming partners in the borrower’s business, but there is usually a relationship between the extent of risk and the expected return. While shareholders have limited liability, they do stand to lose all of the money they have contributed to a company in the event of insolvency. Capitalism does mean that everyone does not own a piece of ancestral land, but the countries where most people do own a piece of ancestral land tend to be very poor countries with low agricultural productivity.
More convincing – and convicting – is Dr Schluter’s argument that capitalism is responsible for the breakdown of families and communities, leading to damaged households.