Monday, January 04, 2010

New Year Question: Capitalism at Crossroads

Happy New Year! According to Oriental Zodiac, it is a Year of the Tiger this year. As I said in the last post, this year will begin turbulently. At the beginning of this year, I would like to ask the following questions on global capitalism: one is capitalism and ethics, and the other is transition to capitalism and free society.

First, let me talk of moral aspects of capitalism. Due to growing socio-economic inequality and the global economic crisis in early 21st century, the global public opinion is critical to greedy capitalists. Some businessmen like Mikhail Khodorkovsky of Russia and Takafumi Horie of Japan are so arrogant to say “Only those who made money are winners of life.” But this sort of greed based profit chasing is not the real value of modern capitalism.

It is Jean Calvin who founded the moral base of capitalism. Throughout the history, merchants were not respected. Until the modern era, aristocrats, warlords, and priests dominated the society, and they showed apparent contempt for profit seeking merchants. From Europe, the Islam world, India, China, and Japan, merchants ranked lower positions in their social hierarchy. Plato gave high priority philosophy to be the leader of the state, and disdained commerce.

When Jean Calvin advocated the doctrine of predestination and devotion to the job given by the god, commercial activities have become a service to the god and the whole public. They are no longer pursuits of selfish greed. Modern capitalism owes much to this moral foundation, which led to bourgeois revolutions to overthrow aristocratic regimes. Adam Smith explained the mechanism of market system, based on Calvinism ethics. Jean Calvin is the real father of modern capitalism.

Some businessmen like Horie and Khodorkovsky may be bright enough to make big money in their business, but did not understand ethics of modern capitalism. Horie may be an alumnus of Tokyo University, but anyway, he is just a drop out. There is nothing strange that he dismissed this, and spent huge amount of money to enjoy going on the razzle-dazzle with popular entertainers. In any case, present day capitalists often forget Calvinist ethics.

Policymakers around the world focus extensively on technical approaches to fix capitalism mechanism, but those measures will be hardly of any help without solid foundation of Calvinist moral values.

The second question is transition to capitalism. Last autumn, the 20th anniversary ceremony for the fall of the Berlin Wall was held. However, some nations in Eastern Europe and the former Soviet Union face difficulties in the post communist era. Some new members of the European Union, like Romania, face hardships to catch up with the European standard in terms of economy, development, and transparency. Prospective applicants like Ukraine fail to meet the European level of anti-corruption measures, which deter their EU membership. Moreover, anti-Western cult nationalism is rampant in Russia and China.

Capitalism today stands at crossroads. Moral foundation by Jean Calvin must be reevaluated. In addition, nations under transition need more attention. Otherwise, cult nationalism will turn them back to old authoritarian regimes.

Photo: Liger the Super Tiger! Cross breeding makes him much larger and more powerful than his parents. Happy New Tiger Year!