Is the Open Economy the cause of our moral degeneration?
The causes for the escalation of murder and killings, thuggery, robbery and plunder, narcotic drugs trade, prostitution, theft of public property and so on in our country have nothing to do with the openness of the economy or the nature of Capitalism. They are due entirely to our negative political system where heaps of money has to be spent to get elected and criminals have to be hired for election campaigns. Moneys so spent have to be recouped by the elected MPs and they resort to corruption. Favors to businessmen, the narcotic drugs trade and the illicit liquor trade provide the largest returns. The substitution of government by diktat (orders) instead of government by law has made public servants including the police to work not in the public interest but in the interests of the ruling politicians, assisting in their corruption, and criminal acts.
Minister Wimal Weerawansa keeps saying that the drug trafficking is the fault of the open economy introduced by President J.R Jayewardene in 1977. But the open economy did not mean that any commodity or service could be imported. Drug imports were not permitted before or after the open economy. Similarly, those who promote an open economy do not say to permit anything and everything to be imported to the country. The law does not permit free trade in narcotic drugs. In fact this accounts for the high price of narcotics since there is no free trade in narcotic drugs.
Open Economy and Free Market Economy are two different things
There are other people too who think that the open economy - meaning free trade and access to the world (globalization) is a cause for the deterioration of moral values. Actually our local intelligentsia is mixing up the openness of the economy with the economic system of Capitalism. Adam Smith himself was a Professor of Moral Philosophy and when he argued for free markets – the essence of Capitalism, he assumed that economic activity and business enterprises would still follow the moral values in the society. He did not suggest doing away with moral values for businessmen.
There is a distinction between the openness of the economy and the free market economy. Many critics mean the free market economy when they refer to the ‘open economy’. So they say that the ‘open economy’ is destroying our culture. The argument that the free market economy is affecting moral values is different from that of the openness of the economy destroying our moral values. The latter refers to the cultural influences of globalization with the global communication revolution – the radio, television, the mobile phone and the Internet which now transmit not only information but also western values to our homes. The openness of the economy really refers to the movement of goods and services not the spread of news, values and information. Television, Internet and other global technology permits an unprecedented number of people to take in sights and sounds from all over the world. Such global transmission of values does undermine the cultures of other countries. But it is not the openness of the economy but the openness of society to modern communications.
The Open Society
We have a choice. We can ban access to the Internet, Face Book, Twitter etc. Karl Popper advocated the Open Society unlike the closed societies like Nazi Germany or the Communist Soviet Union. There is also an Islamic society as in Iran or one which the Muslim Fundamentalists are seeking to impose. The world has a choice. But all states don’t opt for the open economy for some restrict imports to protect domestic products.
The Free Market Economy too has effects on cultural practices. China has adopted a largely free market economy but does not give political or intellectual freedom to its people to criticize the government. Yet Chinese society is being transformed. Originally rituals had an important role in Chinese society. The civilized person had to master rituals in his behavior. In the Confucian tradition people act according to well defined manners, follow a strict etiquette, abide by rites and rules of conduct, and perform appropriate ceremonies on social occasions like weddings and funerals. Ancestor worship, greetings, table manners were all according to accepted codes. Mao’s Cultural Revolution sought to do away with many of these traditional Chinese customs, rituals and values even before Deng Hsiao Peng introduced the market economy. India had pernicious traditional practices like the caste system, the dowry system and Sati where widows were required to jump into the funeral pyre of their dead husbands. But with urbanization and the dent of the market economy, people tend to be more rational, to put the substance before the form and somehow neglect old rituals and practices. Ritualistic behavioral aspects become much less important. Inter-personal relations become more direct and rites of politeness more simple. Repetition, the basic process of traditional education, loses value. But this decline of ritualistic behavior is benign. It does not produce the type of social evils that our politicians bemoan.
The causes for the escalation of murder and killings, thuggery, robbery and plunder, narcotic drugs trade, prostitution, theft of public property and so on in our country have nothing to do with the openness of the economy or the nature of Capitalism. They are due entirely to our negative political system where heaps of money has to be spent to get elected and criminals have to be hired for election campaigns. Moneys so spent have to be recouped by the elected MPs and they resort to corruption. Favors to businessmen, the narcotic drugs trade and the illicit liquor trade provide the largest returns. The substitution of government by diktat (orders) instead of government by law has made public servants including the police to work not in the public interest but in the interests of the ruling politicians, assisting in their corruption, and criminal acts.
Yet some criticize the free market economy too for the erosion of moral values. The values that move the free market economy are alright for the economy to achieve growth but not always desirable for society, they say. Adam Smith assumed that in the pursuit of economic activities, the economic agents would act in their self interests. But he did not mean unrestrained pursuit of self interest ignoring all moral values. But this is happening in capitalism, critics say. Things which should not be valued in terms of money are getting to be so valued they say. Harvard philosopher Michael Sandel, author of the new best-seller, "What Money Can’t Buy: The Moral Limits of Markets," and his earlier classic, "Justice: What’s the Right Thing to Do?" says "Americans have drifted from having a market economy to becoming a market society ... where almost everything is up for sale ... a way of life where market values seep into almost every sphere of life and sometimes crowd out or corrode important values, non-market values.’’ He says that "Today, the logic of buying and selling no longer applies to material goods alone. It increasingly governs the whole of life. He adds that slavery was evil because it treated human beings as a commodity, to be bought and sold at auction," failing to "value human beings as persons, worthy of dignity and respect.’’
So critics say putting a price on the good things in life can corrupt them – markets may promote morally bad attitudes. They say the sale of organs for transplants could lead to even killing people to get their organs. We found that children sent for foreign adoption could lead to the theft of babies from hospitals to be sold. There are many other things like citizenship or voting rights which should not be treated as tradable commodities. But in all these instances it is not the market in them that is morally evil but the immoral behavior of those who practice them ignoring moral values.
Should we worry that we are moving toward a society in which everything is up for sale? Sandel says yes and attributes two reasons for concern.
First, inequality: "Where everything is for sale, life is harder for those of modest means." If wealth just bought things, yachts, sports cars, and fancy vacations, inequalities wouldn’t matter much. "But as money comes to buy more and more, the distribution of income and wealth may become more unequal. The earlier economic theory was that it would be so only in the beginning or take-off stage of development and that later the income distribution would become more equal. This has not happened without deliberate policy measures by governments. According to Forbes, global billionaires swelled from 322 in 2000 to 1,426 recently. Billionaires control the vast majority of the world’s wealth. But it is not true to say that the rich grow richer and the poor grow poorer. Over 400 million absolute poor in China and 300 million absolute poor in India have got out of absolute poverty in the last fifty years. Capitalism is certainly working except where there are civil wars as in much of Africa. What matters most - absolute poverty or relative poverty?
The second reason for concern is corruption. Corruption seems to be increasing unless countervailing checks and balances are in place. Power corrupts and absolute power corrupts absolutely. We have done away with checks and balances and given absolute power to the Executive President.
"Capitalism is not an ideology like Socialism. Nor is it a religion. It is nothing more than a tool to increase the value of capital, or capital goods, no more, no less. It can be compatible with any religion, philosophy, or government system. But it cannot play the role of religion and the failure of moral values is the failure of religions not of Capitalism or the market economy.
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