Morality of Capitalism: The Clash of Arguments

Tom Palmer at EFN Seminar Lahore 24 January 2012

Last night at Lahore, the intellectual and political capital of Pakistan, a war broke out. Luckily, every one walked out unscarred as it was a war of ideas.

From the passionate defense of capitalism on the moral grounds by Tom Palmer, to the challenge of history articulated by the human rights activist I.A. Rehman and to the bounds of the religion defined by the theologian Dr. Khalid Zaheer, this war was well fought.  The audience, in triple figures, was spell bound for good long three hours, while reflecting and questioning the arguments.

The eloquent Tom G. Palmer traversed through history, economic data, political thought and moral philosophy while building a passionate and an articulated defense of capitalism on the unusual moral grounds.

Speaking at the occasion, Dr. Tom Palmer termed Capitalism as the basis of prosperity and well-being as it celebrates the entrepreneur, the scientist, the risk-taker, the innovator, the creator. In fact, the speaker said, capitalism rests on a rejection of the ethics of loot and grab, the means by which most wealth enjoyed by the wealthy has been acquired in other economic and political systems.

Tom Palmer elaborated that in fact, in many countries today, and for much of human history, it has  been widely understood that those who are rich are rich because they  took from others, and especially  because they have access to organized force—in today’s terms, the state. Such  predatory elites use this  force to  gain  monopolies  and  to confisscate the produce of others through taxes. They feed at the state  treasury and they benefit from state-imposed monopolies and restrictions on competition. It’s only under conditions of capitalism that people commonly become wealthy without  being criminals, said Tom Palmer.

Giving historical examples of various countries, Tom Palmer suggested that by adopting free market economy, 400 millions people in China, and 300 millions people in India, have been lifted out of poverty and Pakistan ought to learn lessons from its great neighbhors. Tom reminded us that in sixties, Korean per capita income was less than that of Ghana, while today’s Korea has increased its income by 35 times by adopting the principles of free trade while Ghana still remains marred in socialist economy.

Speaking on the occasion, I.A. Rehman said that Capitalism has been exploited by the elite to expand the gap between the rich and poor, that has generated social discontent. He sought a balance between human happiness and capitalistic growth. I.A Rehman was of the view that the British empire, and by the extension, all empires have exploited their colonies and this extraction represent a good fortune of their wealth today.

Highlighting religious intake on Capitalism, Dr. Khalid Zaheer defined morality in religious framework and said that Islam provides guidelines for all aspects of human life and provides a check on unbridled capitalism. Dr. Zaheer criticized the modern banking system as anti-poor as it gets money from poor depositors and lends it out to rich borrowers, though he said that “riba does not discount the importance of inflation.”

Palmer captured the audience

Palmer: captured the audience

Tom Palmer, as expected, did not let this go unchecked. He presented several cases from history showing that most countries have progressed due to free trade and not due to imperialistic designs. On religion, he built up a case of freedom of religion rather freedom from religion.

Resident Representative of Friedrich Naumann Foundation, Olaf Kellerhoff, reflecting on European experiences on Capitalism, said that the history has proven that institutions of Capitalism such as private property, free enterprise and free trade have lasting contributions to human civilization. On Islam, while drawing upon his knowledge of Islamic history, Olaf was very clear: there is no clash between Islamic economics and capitalism; in fact, Islamic economic system is a free market capitalistic system.

To conclude, instead of coining my own definition of Morality of Capitalism, I would quip our friend Khalil Ahmed: the wealth belongs to the one who creates it. I thought that unless we start believing in the morality of capitalism, much as we believe in its efficiency and technological consquests, the dream of prosperity for our confused nation will remain a mirage.

Mr. Tom Palmer is on a nation-wide lecture visit, which is hosted by Friedrich Naumann Foundation, a German non-profit political foundation. The seminar, organized by Economic Freedom Network in collaboration with Development Pool in Lahore was attended by a wide range of audience that included entrepreneurs, journalists, teachers, professionals and students.

Lahorites: Good listeners, Intelligent Questions

About Ali Salman

Ali Salman is a founding member of Economic Freedom Network Pakistan. He works as a principal consultant at Development Pool, a socio-economic consultancy firm based out of Islamabad. He can be contacted at ali.salman@developmentpool.org.
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