amartya sen – Houghton STAR

While I agree with Joe Gilligan’s point that free market capitalism has benefitted society through encouraging innovation and thereby increasing the wealth and living standards for societies as a whole, it is not immediately apparent whether these accomplishments classify capitalism as good and just. The statistic that Americans have a higher median income and standard of living than Swedes merely demonstrates that free market capitalism, as compared to socialism, may be a more effective route to materialist ends. In order to take the next step and assert that capitalism is then good, one would need to assume that maximal wealth is the good to be pursued by an economic system. However, this would be to assume what capitalism already asserts: that the ultimate goal is maximization of profit. In order to avoid circular reasoning, the goodness of capitalism cannot be analyzed on the basis of resulting wealth. Fulfillment of materialist objectives, such as the effective production of goods and the increase of societal wealth, is a significant merit for an economic system, but does not provide adequate basis for qualifying capitalism as good and just. The standards of what is good and just for an economic system should be defined in ethical rather than purely economic terms.

The traditional ethical defense of capitalism is on the basis of freedom. According to Amartya Sen in Development as Freedom, while efficiency and the ability to improve living standards are important reasons to maintain free markets, “the more immediate case for the freedom of market transaction lies in the basic importance of that freedom itself.” Though we might dispute how freedom should be defined or realized, most of us probably agree that freedom is intrinsically valuable, and the promotion of freedom is an acceptable basis for asserting that free market capitalism is “good.”

The issue to be explored, then, is to what extent the theoretical good of free market capitalism—freedom—is actually realized in capitalist societies. In this context, the attainment of individual freedom will also be my criteria for measuring whether the system is just.

Perhaps the issue of greatest concern for individual freedom in capitalist societies is immense (and growing) wealth and income disparity. The Gini coefficient, which measures the income inequality within a particular group, has risen enormously within countries with capitalist systems over the past quarter-century. Since China began capitalist market reforms in 1979, its baseline standard of living has increased considerably, but its Gini coefficient has increased from about 28 points (marking relatively equal economic distribution) in 1991 to over 47 points (marking gross inequality) in 2012.

While economic inequality is not necessarily inherently unjust, it may still pose a significant barrier to individual freedom, thereby perpetuating injustice. Individuals with less money have less freedom to act in various areas of life, for instance to access education or healthcare. Individuals with less money also have less power to influence what happens in society. This is particularly true in circumstances where wealth may literally buy political influence, a common occurrence in countries such as China. To the extent that the gross economic inequality associated with capitalism limits freedom, it is unjust.

Defenders of capitalism might respond by suggesting that the underlying structure of capitalism is just, however, because it rewards individual effort and achievement with economic success. But basing economic justice solely on individual effort mistakenly assumes that individuals begin on level playing fields with equal capabilities to succeed. A recent World Bank study showed that 80% of variability in a person’s income is accounted for by country of birth and parental income level. The remaining 20% is primarily affected by sex, race, and other variables over which persons have no control; individual effort has a very small impact on economic success. Even in capitalist societies where there might be a stronger relationship between effort and success than exists globally, there is no question that factors over which an individual has no control significantly influence his or her life success or lack thereof, economic and otherwise. Although capitalism is structured individualistically, in reality, the “individuals” who take part in capitalism are shaped by communities.

So am I suggesting that free market capitalism is not good and just? Perhaps this is not the most relevant question. When evaluating capitalism, we must consider it in relation to alternate economic systems. Other systems might come closer to the ideal of the good and the just in some regards, but there are always tradeoffs. While free market capitalism cannot be unqualifiedly characterized as good and just, it may still be the best alternative. However, we must be careful to recognize the limitations of capitalism so that we can be open to pursuit of the good and just through whatever measures may be most effective rather than limiting ourselves to a single framework.

Two Views: Would Widespread Economic and Political Freedom Create Global Peace?

Though I would agree with Sarah Slater’s point that global peace could never be entirely accomplished due to the presence of scarce resources and competing cultural values, it is hard to negate the evidence that democracies – systems in which political freedom is the foundation – rarely go to war against each other. It is also hard to ignore that economies that practice economic freedom and are increasingly dependent on each other also find it difficult to go to war. For these reasons, it seems fair to conclude that the expansion of political and economic freedoms contributes to domestic and global peace, even if they may not resolve the entire issue.

These arguments ultimately rest on cost-benefit analysis. As Immanuel Kant, one of the early writers on global peace, wrote in 1795, wars do not frequently benefit the ordinary people in a country. Often, citizens have to bear the load of war, “having to fight, having to pay the costs of war from their own resources, having painfully to repair the devastation war leaves behind, and, to fill up the measure of evils, load themselves with a heavy national debt that would embitter peace itself and that can never be liquidated on account of constant wars in the future.” In a republic or a democracy where citizens are free to exercise political control, it would make sense that they try to refrain from going to war as much as possible. Political freedoms, then, become safety valves that citizens may exercise against their politicians when conflicts begin to get overheated.

Theoretically, Kant’s proposition makes sense, but how does it play out in recent history?

Political freedom – by which we mean the ability of the public to engage in a political process without being coerced or compelled in any way – is a relatively recent phenomenon in history and the phenomenon only took hold in the past 50 or 60 years. According to scholar Michael Mandelbaum, “In the second half of the twentieth century … democracies consistently preferred butter to guns” due to their political choices which reflected their preferences for social welfare programs than to foreign activity and wars. Even the United States, which has acquired the reputation of bellicosity “was subject to the same popular reservations about and objections to war” in the twentieth century that was present in other countries, albeit at a smaller scale.

Increased globalization and the dependency between economies that practice economic freedom also create situations in which the desire for peace outweighs the desire for conflict. Conflict can interrupt trade between nations, the production of goods, and the transactions between consumers and producers which encourages these economies to refrain from war. Again, this argument rests on a cost-benefit analysis between the costs of war and the benefits of peace. As Sarah Slater noted in the previous article, no European state in the European Union has attacked another – a miracle if we examine Europe’s recent history.

We should look at expanding political and economic freedom as a positive force in expanding the capacity of people to behave nonviolently, but we shouldn’t assume that it is a guarantee that people will take the opportunity of these freedoms. As Nobel Prize-winning economist Amartya Sen wrote concerning democracy in Development as Freedom, “Democracy does not serve as an automatic remedy of ailments as quinine works to remedy malaria. The opportunity it opens has to be positively grabbed in order to achieve the desired effect. This is … a basic feature of freedoms in general – much depends on how freedoms are actually exercised.” While political and economic freedom may indeed contribute to global peace, it still depends on what people make of it.

In conclusion, I do not believe that there is a one-size-fits-all solution to the issue of global peace and that if only we could snap our fingers and declare that all countries were politically and economically free, then the world would be immediately at one. This approach ignores cultural and historical conditions and, as we have seen in the Balkans, the transition from an authoritarian government to a system that promotes political and economic freedom can be a violent one. (The current state of affairs in many Middle Eastern countries today would be other examples.) By the same token, however, the evidence exists that, in the long run, these expansions may indeed increase global peace and contribute to the capacity of people to behave nonviolently.