The case for moral capitalism
To convert the business man into the profiteer is to strike a blow at capitalism … The business man is only tolerable so long as his gains can be held to bear some relation to what, roughly and in some sense, his activities have contributed to society.”
Can we create a morally acceptable form of capitalism; and if so, what would it look like? Faced with a decade of hardship apparently caused by the greed of a few, people are asking whether bankers are no more than profiteers, and whether inequality has risen too far. Even the former US treasury secretary, Lawrence Summers, and former head of the CBI Richard Lambert, have said we need to do better on inequality.
The quote above, however, comes not from anyone today but from John Maynard Keynes, in 1923, during the postwar turmoil in the financial markets. There was hyperinflation in Germany, a collapse of the Mark, chaos on the foreign exchanges as prices had gone up and down, and violent fluctuations in employment.
Like many of those who turned to communism and fascism, Keynes had strong moral objections to capitalism - but he consistently repudiated socialism, communism, and fascism, for he believed that capitalism was essential both to create high standards of living and to guarantee personal liberty. In effect he sought a capitalist revolution.
For Keynes, the sustainability of capitalism was not only a technical question but a moral question - because if capitalism is to survive, people have to believe it is a system worth supporting. His priority was to eliminate unemployment. It was also a moral priority to design an international monetary system that would reduce the chances of capitalism descending into chaos again. And to do that, economists had to grapple with difficult technical details, but their motivation was a vision of a better capitalism.