Profit often appears to conflict with ethical imperatives, which result in disparities in profit margin and the cost of attaining a product or specific service. YAFO Institute, a think tank institution, in its capacity to create a well-informed generation, organised a webinar to discuss this seeming divide by investigating the complex relationship between capitalism and moral ideals.
Held on Wednesday, March 13, the virtual dialogue featured Bruce Koerber, author of The Divine Economy Model (USA), John Mugabi Socrates, Founding Director of Action for Liberty and Economic Development (ALED) (Uganda), and Nathaniel Dwamena, President of YAFO.
John Mugabi Socrates, Founding Director of Action for Liberty and Economic Development (ALED), conveyed that capitalism is a social system that is based on an individual’s rights, where a person is not coerced to choose, live, or pursue anything but chooses according to his freedom and understanding.
He continued that, quite in contrast to Africa, this idea of capitalism has not been embraced enough when it comes to wealth creation. “We choose wealth distribution because we believe there is an entity called government that can give people through the system of socialism a good life, which has not been possible so far,” he noticed.
On the assertion of whether capitalism is inherently moral or immoral, Bruce Koerber stated that capitalism, which he affectionately put as ‘capital’, cannot be immoral unless the people managing it are valueless or regarded negatively.
He claimed that “anyone that has thought on morality recognises that human beings are sovereign within themselves; hence, they should be able to exercise their God-given talents, find the gems they are, polish them, and give to the world what God gave to them, so there is nothing immoral about that; we are an expression of our search for the goods of the future, and so we are capital-oriented.”.
John Mugabi submitted that moral principles such as fairness, justice, and equality and how businessmen take profit from purchasers, plus its intersection with capitalism, portray that businessmen taking profit from purchasers is moral because the profit is not taken forcefully but rather through extreme value.
“Many people consider profit immoral, but profit is a reward given to someone for exceptionally giving you something valuable—that cannot be immoral. It is the greatest justice when you are free to take something and you reward a person. Whatever that person becomes should not concern you because you have given it value and the value has given you satisfaction, but many people in our community perceive it as immoral,” he justified.
He believes the market system arrangement, which is ‘capitalism’, to be a free and justifiable system since there is no force.
According to Bruce, profit is morally not wrong as both the buyer and receiver attain value at the end of the transaction.
He furthered that selfishness and greed which can be personal traits of individuals can be solved by affecting the pricing of products when there is a system of rigid and protective regulations on producers product which will curb their greed and selfishness in overpricing the products they sell “greed is a negative personal trait, and if they find themselves in a free market economy, they will not be able to express it, because if they are driven in that direction it will disappear because of the entrepreneurial discoveries that are taking place which will eliminate the possibility to them to gain because of their greed, so if a person has those negative traits and is in a system that is rigid and protective they will not travail”.
Responding to a question about how a capitalist state can build hospitals, schools, and social facilities where individuals have a subjective mindset, Mugabi responded, “If we live in a society where everyone works hard and uses their creativity, energy, skills, and talents to get what is best for them, then don’t you think that person will be able to afford any kind of medication he wants?
But then what you can say, like what many of the socialist friends in Africa create, is that they have the assumption that in society there are people who are going to be lazy, there are people who are going to be weak, and there are people who are going to be disadvantaged forever, and they base the policies of wealth creation on that. What does that lead to? It leads to a situation where a government takes away your money and says, We are going to provide education, thereby taking away your money, but at the end of the day, the education they may provide, you may end up not taking your child there, yet you might have to be subjected forcefully to support something that is not worth it to you.”.
On whether giving back to society translates to morality, Mugabi conveyed that “giving back to society is not mandatory, especially if the services you are providing meet the needs of consumers, because meeting needs is another way of giving back to society. “Giving back should be voluntary; it should not be juxtaposed with morality, but I support you when you feel like giving back to support your values, but it should not be something society forces you to do.”
On the cause of the imbalance of wealth accumulation in the global economy and regions locally, Bruce reported that the imbalance in these systems is not because of capitalism but because these wealth accumulations are based on individuals’s creativity and what they can express and bring to the economy. From a cultural perspective, the assumption that Africans are more into socialism than capitalism, which is why they are poor, Mugabi asserted that it is a common fallacy and misinterpretation of Africa because, before the coming of the Europeans, “we had a system of trade among ourselves, and that was how people managed to survive—people made medicine out of herbs, and people started selling it, so trading was in Africa, and it was done voluntarily and not by force.”
Mugabe raised a concern that private firms from foreign countries that have established firms in Africa gain some tax waivers, which enable them to sell products at a competitive price, giving them the upper hand over local products that do not have tax waivers, which makes local producers amplify product costs to meet tax demands, creating a divide in profit margin for local producers.
“All these businesses are competing in the market to sell their goods, but because they don’t pay tax, they can sell their goods cheaply. The others that pay tax cannot sell the goods at a certain price, which is lower because they have to meet all these taxes, so in the end, who will be a good entrepreneur and who will be a good producer?” he enquired rhetorically.
Bruce stated further that “we are living in the dark ages where all terminologies have been hijacked, the free market has been hijacked, privatisation has been hijacked, profit has been hijacked, capitalism has been hijacked, entrepreneurship has been hijacked, and all the terminologies have been defined according to the way the state wants them to be defined.”
In this regard, Bruce advocated for re-education of ourselves in order to learn what true entrepreneurship and capital are.
Commenting on assertions that capitalism is greedy and breeds unhealthy competition, Bruce said that capitalism is producing goods for the future, hence that notion prior is unjustified. Mugabi added that when people realise that you are wholly devoted to your business with little or no attention to other issues, they begin to give you names.
“So the moment you pursue something endlessly because it is what you need, you will be regarded as maybe greedy, very selfish, and also unethical, so we need to educate people about this.”
He believes that when individuals are educated, they will get to know what the market and entrepreneurship can do, and they will now confess that we need to be free to live a better life.
Mugabi called on the government to give tax waivers to people with disabilities so they could overcome the vulnerabilities presented by those issues.
“As Africans, we need to seek policies instead of a consistent change in government.” Mugabi further advised.
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