the good news of wealth

8/3/2019 The Good News of Wealth

1/22

The Good News of Wealth

Course: Consumer Cultures in America

Eingereicht von: Hannes Linke

Endterstr. 9

90459 Nrnberg

[email protected]

Matrikelnummer: 21373745

Studiengang: English and American Studies

Institution: Lehrstuhl fr Amerikanistik, insbesondere nordamerikanische

Literatur- und Kulturwissenschaft

Dozentin: Prof. Dr. Heike PaulSemester: SS 201


2/22

2

Table of Contents

1. Introduction .............................................................................................................. 3

1.1 Problem and Approach ....................................................................................................... 3

2. Morality .................................................................................................................... 4

2.1 An introductory definition .................................................................................................. 4

2.2 The history of morals and capitalism ................................................................................. 5

2.3 The problem with morals ................................................................................................... 6

3. The soul of capitalism ................................................................................................ 9

3.1 Competence and the gospel of wealth .............................................................................. 9

3.2 Chances and the problem of wealth ................................................................................ 12

4. Modern morality ..................................................................................................... 13

4.1 The political side of morals ............................................................................................... 13

4.2 Philanthropy ..................................................................................................................... 14

4.3 Philanthrocapitalism ......................................................................................................... 15

4.4 Social responsibility .......................................................................................................... 17

5. Conclusion ............................................................................................................... 18

5.1 A comparative summary................................................................................................... 18

6. References .............................................................................................................. 20

7. Erklrung ................................................................................................................. 22


3/22

3

1. IntroductionWhen it comes to economic success, it could be proposed that there is a natural discrepancy

between the general rules of economics and ethical behavior. A fully functioning capitalist

system seems to automatically imply exploitation of labor, increased focus on material

values, unequal distribution of wealth, and the waste of resources. Especially due to the

great crises in the last decade,1

consumerism, wealth and corporate success are very often

put in close association with concepts of egocentrism, greed, and immoral behavior at the

cost of public wealth or greater well-being. As the problem is widely reflected and analyzed

in economic literature, this paper will follow a different approach by trying to analyze not

the lack of, but rather the existence of moral codes and behavior in relation to consumer

culture in a capitalist society. Even though America is widely perceived as the prototype and

main driver behind capitalism, these concerns do not exclusively apply to the United States

but rather capitalist societies worldwide. Therefore, the following analysis will focus, but not

limit itself to American developments of this nature as well. To rate an economic system like

capitalism, communism or socialism with a certain level of morality can be difficult if not

impossible. Economic systems can be best described as neutral or amoral, meaning it is

indifferent to morals, it does not refer to it, as it is placed outside morals.2

Hence, it is not

the goal of this paper to brand capitalism as ethical or unethical, which would be dependent

on the analytics political point of view and as a result, a highly subjective manner. The

question that shall be dealt with instead is, whether capitalism and sustainable morality are

compatible and if so how they relate to each other.

1.1 Problem and ApproachThe underlying problem of capitalism, the consumer-culture it is tied to, and the companies

it is embodied in, leads to the question of whether participants actually share a

responsibility with their surrounding society and environment. For Milton Friedman, the

main responsibility and major concern of a company in a free-enterprise system should be

1

Especially the dotcom-bubble in 2000, the 2007 financial crisis and the resulting currency crisis 20102Titus Suciu:Is Capitalism Ethical?, in: Bulletin of the Transilvania, University of Braov, Vol. 2 Series V. 2009,

p. 239.


4/22

4

to generate as much profit as possible.3

In contrast, the responsibility that a company shares

with the environment from which it gains its profits is defined as the obligation of the firm

to use its resources in ways to benefit society, though committed participation as a member

of society [] independent of direct gains of the company.4

These opposing views mark thestarting point of this paper as it will reflect on this very problem. Well aware of the fact that

responsibility and moral tend to be difficult concepts to benchmark, the aim of such a paper

should be more to analyze any higher form of behavior, not as a thing, but as a process []

not from a whole thing to its parts, but from a process to its different moments.5

Therefore, a cultural-historical approach will be taken to measure the ideological, political,

and economic relevance of moral concepts in early and modern capitalist consumer culture.

2. Morality2.1 An introductory definition

To provide a solid base for further analysis, it is initially important to deal with the concept

of morality as such, in order to gain a general understanding of the term within this paper.

Morals can be seen as a set of forms of the social conscience which regulate the

cohabitation of people in society, [], destined to direct peoples behavior.6 In other

words, they describe the practical relation between a set of ideals and the actual application

of those ideals to everyday life.7

The fundamental core values that moral entails vary

according to the cultural variations and the philosophical, political and social point of view.

In general, morals deal with concepts of good and evil, harm and care, fairness and

reciprocity, but can also be applied to a religious, social, or gender framework in terms of

purity and sanctity, in accordance to a hierarchical role fulfillment or expected group

behavior.8 Briefly, the purpose of morals seems to be the creation of an understanding of

what is right and wrong. In an economic context and in strong reference to the American

3Milton Friedman: A Friedmann Doctrine: the social responsibility of business to increase its profits, in: New

York Times Magazine. 1970. URL: http://www.springerlink.com/content/m2141pp14981487h/ [23. Sept. 2011]4

Peter Kok, Tom van der Wiele, Richard McKenna, Alan Brown: A Corporate Social Responsibility Audit within

a Quality Management Framework, in:Journal of Business Ethics Vol. 31 No, 4. 2001, p. 288.5

Levy Rahmani: Soviet Psychology, International Universities Press: New York. 1973, p. 132.6

T. Suciu :Is Capitalism Ethical?, p. 240.7

In contrast to this, ethics describe the theoretical-rational vision for the more practical concept of morals.8Jonathan Haidt, Jesse Graham: When morality opposes justice: Conservatives have moral intuitions that

liberals may not recognize, in: Social Justice Research Vol. 20. 2006, p. 98116.


5/22

5

Dream,9

morals become necessary in terms of the equity of chances, freedom of

participation in the economic system and therefore, the liberty to achieve profit and gain

wealth.10

In contrast to the egocentric ways of homo economicus,11

morals provide a

general understanding of how to pursue ones own interests without violating the rights ofothers by referring to the daily behavior both at spiritual as well as at practical and

behavioral level of human individuals or societies, ethics, with its theoretical traits, of moral

philosophy.12

2.2 The history of morals and capitalismBecause morals are not a system of binding rules a society agrees upon, but more

prescriptions which recommend a general model of behaviour, an ideal to be followed,13

it becomes necessary to analyze the relevance for moralistic interaction within economic

systems. For Adam Smith, pioneer of sociopolitical economy and father of modern

economics and capitalism, a decentralized economic system, driven by the consumers

interests, basically serves two purposes. First, it granted the individual participants of the

system the freedom to act according to their own interests instead of being governed by an

authoritarian system. This liberating economy clearly opposed slavery, colonialism, andimperialism, and was perfectly compatible with a democratic political system oriented to

maximizing the welfare of the citizen as a political consumer.14 Second, this economy

serves the material well-being of the society according to the interests of its individual

members by the simple mechanism of demand and supply. Considering these two points,

17th - 18th century capitalism had much more to it than the mere pursue of individual

economic interest. It also had a moral and social function to society. The individual

contributed to the well-being of their society on a social level by providing a specialized

service, being an expert in producing necessary goods or employing workers, and was

therefore, led by an invisible hand to [] without intending it, without knowing it, advance

9This national ethos of the United States of America understands (economic) freedom and liberty as the

promise and the possibility to achieve prosperity and success.10

T. Suciu: Is Capitalism Ethical?, p. 241.11

Homo economicus defines humans as rational and narrowly self-interested actors.12

T. Suciu: Is Capitalism Ethical?, p. 238.13

Ibid, p. 238.14Adam Smith: An Inquiry into the Nature and Causes of the Wealth of Nations. Oxford: Clarendon Press.

1976, p. 626.


6/22

6

the interest of the society.15

In addition, economist and political sociologist Max Weber

saw capitalism and moral core values in close relation to each other. Not only did the

economic and social system have to be founded on ethical norms and principles to work,

but it also served as a platform for individuals to acquire a moral understanding and self-confidence as ethics and professional activity are the fruit of a vocation.

16This is essential

for his protestant work ethic because in contrast to Karl Marx and his approach of

historical materialism17

- he saw the ethical code of conduct and Christian behavior as the

driver of capitalism and not vice versa: Profession is the highest form of Christian

activity.18

In addition, the system was also able to self-regulate any violations of the moral

standards; just as its economic needs were self-regulated by supply and demand. Capitalism

was, within these mechanisms, envisioned to work as a system in which economic interests

and the moral norms determine together the human action19

and therefore, would

automatically lead to a fair distribution of goods and wealth of the whole society.

2.3 The problem with moralsSo where did it all go wrong? The problem with morals in a capitalist society is two-sided

and can of course be seen as an economic problem, though in a wider context it becomes aphilosophical one.

The Scottish-American philosopher Alasdair MacIntyre describes Western culture as being

based on three contradictory elements. First, the individual as a free member of society has

the right to follow its own preferences independent of external social influences or

restrictions. Second, the different status of individuals in society are permanently measured

and held against each other, which does not only build up a hierarchical class order based

15Adam Smith: Essays on philosophical subjects. Oxford: Oxford University Press. 1980, (originally published

1796) p. 184.16

Max Weber: The Protestant Ethic and the Spirit of Capitalism. (Translated by Talcott Parsons) New York:

Dover Publications Inc. 1958, p. 155.17

According to Marx, human society with all its social, political, and religious achievements is based on the

production of necessary goods and means. In the social production of their existence, men inevitably enter

into definite relations, which are independent of their will, namely relations of production appropriate to a

given stage in the development of their material forces of production. The totality of these relations of

production constitutes the economic structure of society, the real foundation, on which arises a legal and

political superstructure, and to which correspond definite forms of consciousness. (Karl Marx: A Contribution

to the Critique of Political Economy. Moscow: Progress Publishers. 1977, p. 11.)18M. Weber: The Protestant Ethic and the Spirit of Capitalism, p. 156.

19T. Suciu: Is Capitalism Ethical?, p. 240.


7/22

7

on material achievements within society, but also promotes competitive behavior and

comparisons in terms of economic success within the capitalist system. The third and last

element is a strong call for values, morals, and justices, which are understood through

tradition, a general understanding of a working society, and religious doctrines.20

Elements of an ideal capitalist society from a philosophical point of view:

Source: Self-constructed graphic based on Alasdair, Macintyre: "Individual and social morality in Japan

and the United States, p. 489-497. Displaying how the three principles blockade an ideal capitalistic

system.

The problem lies within the compatibility of the three elements, as they neither manage to

provide a sustainable, universal system within society, nor do they deliver shared standards

by which the inevitable conflicts between them can be resolved.21

This automatically leads

to the paradox that every individual automatically expects all members of his or her society

to stick to the preset ethical code, but they themselves will more than likely take advantage

of a situation in which ignoring moral standards will benefit their own interests. This

downgrades the third element in the system, moral behavior, to being optional instead of

essential. Its existence becomes hypocritical and in effect is equal to the complete omissionof this third element. Macintyre describes the development of this paradox:

The ideal conception of the good will be advanced in different contexts, with relatively little

discomfort at the incoherence involved. For unacknowledged incoherence is the hallmark of this

contemporary developing American self, a self whose public voice oscillates between phases not

20Alasdair, Macintyre: "Individual and social morality in Japan and the United States: Rival conceptions of the

self", in: Philosophy East and West, Vol. 40 No. 4. 1990, p. 489-97.21Deepak Lal: Mortality and Capitalism: Learning from the Past, in: Working Paper Number 812, University of

California. 2002, p. 9. URL: http://www.econ.ucla.edu/workingpapers/wp812.pdf [24. Sept. 2011]

1. Individual freedom

2. Competetive nature

3. Moral behavior


8/22

8

merely of toleration, but admiration for ruthlessly self-serving behavior and phases of high moral

dudgeon and indignation at exactly the same behavior."22

From an economic perspective, capitalism also faces another problem. With increasing

scale, the economic system also increasingly loses its cause-effect relationship to the

originally implied moral core values. The individual economic concerns and the private well-

being becomes the main driver in this system. This development does not automatically

make capitalism an unmoral system, but describes the need for a democratic system as a

counterpart to also assure a common well-being and a fair distribution of wealth. This

development is critical as both systems follow conflicting ideals and with increasing growth,

stop complementing each other, but work further against each other.23

Even though the

government as an entity with its mechanisms of political, administrative, legislative and judicial authority24 in theory has very powerful tools to create a fair socio-economic

situation, modern capitalism has proven to be very successful in bypassing the regulating

influence and creating more profit at the cost of society.25

The financial crisis is a very good indicator for the trend of capitalism not only becoming

amoral, but also promoting immoral behavior to very quickly generate as much profit as

possible. With this trend of morals becoming excluded and an external component of

capitalism, it also develops into a system which can endanger the social-economic life itself

of the different corporations, institutions and social categories.26

With increasing growth

of its economic power, a fair capitalist society requires a balancing power with equal

influence to regulate upcoming inequalities. In this context, fair does not mean the equal

distribution of goods among every member in society, but equal chances for everyone to

achieve wealth. To assure this, every member in society needs an equal share of political

power to have its interest represented. This most basic assumption of a democratic society

does not hold proof in todays society as political decisions are made on the basis of

economic considerations and decided by the balance of private economic power. Private

profit outweighs public good.27

This directly results into the further growing gap between

22Alasdair, Macintyre: "Individual and social morality in Japan and the United States, p. 492.

23T. Suciu: Is Capitalism Ethical?, p. 241.

24Ibid, p. 241.

25For example, when a company manages to avoid paying taxes, but at the same time exploits local resources

like labor, etc.26T. Suciu: Is Capitalism Ethical?, p. 242.

27Robert Bellah: Coming around to Socialism: Roots of the American Taboo, in: Nation. 1974, p. 684.


9/22

9

rich and poor on the one hand. On the other hand, it helps big corporations to not only

determine the economic, but also the political landscape of the capitalistic system.

3. The soul of capitalismTo save the system from itself, it cant be enough to point out the few exceptions that

prove the rule of an immoral system, but to find sources within capitalism that are capable

to bring back soul to the economic system.28

The question if another economic system like

socialism would be more suitable for a sustainable relation between moral behavior and

individual economic interests, should be mentioned in the further analysis, but not dealt

with in depth, as especially in American society, socialism also has an enormous ideological

disadvantage towards capitalism, irrespective of whether it might provide a better

framework to society or not.29 This is due to the circumstance that even today Americans

treat social problems as problems of personal morality.30

3.1 Competence and the gospel of wealthQuiet contrary to the focus of the 16

thpresident of the United States Abraham Lincoln on

the ordinary worker in combination with a strong government that guaranteed a free

market to not only gain prosperity to the individual but to the nation as a whole,31

Carnegie

comes up with an entirely different ideology to deal with the existing problems of the moral

contract within capitalistic society in his essay Wealth, also known as The Gospel of

Wealth in the late 19th century. Within his attempt, he first divides society in two brief

classes to shift responsibility on to the richer half to handle the proper administration of

28In reference to the study from Marie-Laure Djelic: How Capitalism Lost its Soul: From Protestant Ethics to

Robber Barons, in: Ethical Boundaries of Capitalism, Daniel Dianu, Radu Vranceanu. Aldershot: Ashgate

Publishing Ltd. 2005.29

The failure ofboth the Communist Party and the New Left to link their socialism to any genuinely American

pattern of values and attitudes, and the use of foreign categories to analyze American society, are typical ofall

but a few moments in the history of American socialism. (Robert Bellah: Coming around to Socialism: Roots

of the American Taboo, p. 683.)30

Robert Bellah: Coming around to Socialism: Roots of the American Taboo, p. 678.31Wilson Huhn: Abraham Lincoln Was a Framer of the Constitution, in: Washington University Law Review.

2009. URL: http://lawreview.wustl.edu/slip-opinions/abraham-lincoln-was-a-framer-of-the-constitution/


10/22

10

wealth, so that the ties of brotherhood may still bind together the rich and poor in

harmonious relationship.32

Carnegies idea still seems to be applicable to the situation of capitalism in the 21 st century,

as the gap between rich and poor is constantly growing, ultimately leading to complete

omission of the middle class. As pointed out before, it is not capitalism itself, but the

growing scale of the economic system that leads to a concentration of economic power.

Paired with a government unable to prevent the misuse of this power and one that further

promotes it with tax-reductions and other benefits for high earners and big corporations

this in consequence will automatically lead to immoral behavior and an unjust society.33

The Gospel of Wealth also leaves the system and its mechanisms untouched as the

development of capitalistic economic system is understood as a prerequisite for civilization

to further develop as well. The good old times were not good old times. A relapse to old

condition would be disastrous [] and would sweep away civilization with it.34

Carnegie

even takes this thoughts one step further as economic growth is understood as natural

course that, with all its negative aspects, also benefits society and improves the situation of

human kind.35 Establishing a moral contract within society cannot be founded on changing

the system itself, but furthermore, on the necessity of accommodation to the naturaldevelopment of great inequality of environment, the concentration of business, industrial

and commercial [] and the law of competition,36 so that a highly developed consumer

culture in a capitalistic society manages to be not only beneficial but essential for the

future progress of the race.37

In the attempt to solve this problem, it might raise the conclusion that the basic principle of

individualism, which is inherent to human nature, has to be replaced with a higher vision

universal work ethic. Even though working for the general well-being of society seems most

desirable in terms of a moral understanding, it also seems almost impossible to achieve, as

egocentrism is an essential part of being human and being successful in modern society.

32Andrew Carnegie: Wealth, in: The North American Review, University of Iowa, Vol. 148, No. 391. 1889, p.

65333

Warren Buffet: Stop Coddling the Super-Rich, in: The New York Times: The Opinion Pages, 2011. URL:

http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-rich.html [23. Oct. 2011]34

Andrew Carnegie: Wealth, p. 654.35

Ibid, p. 655.36Ibid, p. 655.

37Ibid, p. 655.


11/22

11

Carnegie admires this ideal change of a higher motive in human behavior, but also knows

about the difficulty for this development to happen as this is not evolution, but

revolution.38

The change has to come from within the system without dismantling its

essential driving powers. The acceptance of human nature as being inherently competitiveand selfish in its action translates into the concept of economic Darwinism. Even though it is

an ideology that in terms of the contribution to society, systematically leads to socially

worse outcome,39

The Gospel of Wealthrevisits this idea of survival of the economically

fittest and starts to look for potential in this evolutionary concept, in which society so far

has produced the best fruit.40

As the moral contract between the most successful participants of the system, society and

its resources, which the wealth of the few is built upon, can only exist due to intrinsic

motivation, Carnegie tries to expand the spectrum of motivators for human behavior. This

can be displayed by taking Maslows concept of human behavior and the pyramid of needs,

with self-actualization as the final state of human motivation. The Gospel of Wealthadds a

sixth hierarchical level at the very top of this concept. The ethical logic behind this reset in

social ideology is that, due to the fact that every next level of Maslows pyramid requires a

continuously increasing amount of wealth, the final level must not be defined as such, butonly competence, which [] should be the aim of all to acquire.41 At the same time, is

understood that a certain amount of monetary and economic independence is required for

an individual to expand its focus on the own well-being to a common interest of society.

Hereby, social responsibility and moral behavior are not addressed in terms of a universal

law that could neither be enforced in the first place nor would anyones private interests by

applying it. Furthermore, it is understood as an obligation addressed to the top of society,

but at the same time a privilege that has to be earned by economic success:

38Ibid, p. 657

39Birgitte Slot, Hans Jrgen Whitta-Jacobsen: Economic Darwinism, in: Workingpaper. 2006, p. 21 -23. URL:

http://www.econ.ku.dk/okojacob/workpapers/ed.pdf [25. Sept. 2011]40Andrew Carnegie: Wealth, p. 655.

41Ibid, p. 657.


12/22

12

Source: Self-constructed graphic based on Abraham Maslow: A Theory of Human Motivation, inClassics in the History of Psychology, York University Toronto. 2000. (Originally Published in

Psychological Review, Vol. 50. 1943, p. 370-396.) under consideration of Carnegies vision of an ideal

human society in Andrew Carnegie: Wealth

3.2 Chances and the problem of wealthIn terms of establishing a moral framework around capitalist society, The Gospel of Wealth

provides a foundation that can further be built upon. It is essential to create an

understanding of how institutions as well as individuals have to deal with responsibility for

their society. Also, awareness has to be created about this social responsibility being mis- or

unused. Therefore, Carnegies major concerns are also either the involuntary use of an

individuals fortune after death and the bequeathing of large sums to the next generation,

which can be seen as the economic equivalent to monarchy, which is equally needed by

capitalism as monarchy is by a democratic society.42

Another valid point is the notion that

help in the form of charity should in most cases only be addressed to those who will help

themselves; to provide part of the means by which those who desire to improve may do so;

[] to assist, but rarely or never to do all.43 By taking modern societys problematic of

charity being the new solution for poverty into consideration, this is a very relevant and

current point of concern. Even with modern information technology, it can in many times be

questionable if the donated goods and sums are actually spent effectively enough or make it

to those in need at all. Counteracting this would require a more active understanding of the

42Ibid, p. 658.

43Ibid, p. 663.

Maslows concept of

motivations / needs

that drive human

behavior

Competence as final

driver according to

Carnegie


13/22

13

concept of charity instead of passive, mostly unaudited almsgiving. This leads Carnegie to

the conclusion that a thoughtful distribution of a surplus of resources during ones own

lifetime, so that the resources are used within the original intention of the donor and

therefore, in the most effective way are the most responsible and ethical way to participatein the moral contract.

The problem with The Gospel of Wealth is that it offers no concrete instruments to

establish the suggested moral code, and it does not suggest economic sanctions, but only a

social disgrace if money is horded during ones lifetime and or not spend properly to the

good of society: Men who leave vast sums in this way may fairly be thought men who

would not have left it at all, had they been able to take it with them [] and will pass away

unwept, unhonored, and unsung.44

In addition, Carnegie pictures the most successful

individuals and best minds45 of society as trustees for society, a filter that guarantees the

proper administration of resources within society. In sharp contrast to Lincolns American

Dream of a prosper society with equal opportunities and a strong middle class, Carnegie

envisioned a moral system that promoted worshiping exceptional individuals and an

increased amount of social respect and responsibility for their achievement.46 This might

lead to the assumption that the main purpose of The Gospel of Wealth might not be theassurance of a social and morally just society, but can furthermore, be understood as a

justification for immoral competitive behavior and the necessary practices, which it takes to

become successful in a capitalist society.

4. Modern morality4.1 The political side of morals

Even though the true moral character of Carnegies essay can be questioned, history clearly

lacks an alternative that grants equality and a more sustainable moral framework within

society. One could propose that the growth of an economic system automatically leads to

the concentration of power, exploitation of human and natural resources of society, and the

need for immoral or at least amoral behavior to persist in competitive market economy.

44Ibid, p. 659.

45

Ibid, p. 664.46Norton Garfinkle:The American Dream vs. the Gospel of Wealth: he Fight for a Productive Middle-Class

Economy. New Haven: Yale University Press. 2006, p. 15 -16.


14/22

14

In early 1944, F. D. Roosevelt addressed this very problem, especially concerning the lack of

a political power to counteract this unbalanced and amoral state of society and assure equal

opportunity and a moral code of conduct: As our nation has grown in size and stature,

however - as our industrial economy expanded - [] political rights proved inadequate toassure us equality in the pursuit of happiness.

47For Roosevelt, the political rights granted

to each individual in the Bill of Rights were not sufficient enough to provide for a fair

society. For him, a moral society was not defined by the strongest, but rather the treatment

of the weakest link in the chain. He therefore proposed a second Bill of Rights, called the

Economic Bill of Rights that among others included:

The right to a useful and remunerative job in the industries or shops or farms or mines of the nation;

The right to earn enough to provide adequate food and clothing and recreation; The right of every

businessman, large and small, to trade in an atmosphere of freedom from unfair competition and

domination by monopolies at home or abroad; The right to adequate protection from the economic

fears of old age, sickness, accident, and unemployment; [].48

From a 21st

century perspective, those rights seem quite contrary to todays understanding

of a free American Economy, not only because it also reflected basic elements of the 1936

Soviet Constitution.49

Todays consumer culture, the economy that is built around it and the

governing entities entailed to both, appear to be more concerned with the steady growth of

the economy and less likely to speak of economic policy in such moral and political

terms.50 In light of this, it is highly interesting to see a rediscovering of Roosevelts ideals

under the Obama administration.

4.2 PhilanthropyIn contrast, the reaction to todays high need of moral behavior does not limit itself to the

field of politics. On a social level, a new trend has developed that has an understanding

parallel to the core ideas of The Gospel of Wealth and might be perceived as the

renaissance of its core values. Under the name The Giving Pledge, the two richest men in

47Franklin D. Roosevelt, et. al.: The Public Papers & Addresses of Franklin D. Roosevelt. New York: Harper.

1950, p. 40-42.48

Ibid, p. 40-42.49

The Soviet or Stalin Constitution granted full employment, public education, social security, tenant rightsand universal health care to its citizens50

Norton Garfinkle: The American Dream vs. the Gospel of Wealth, p. 17.


15/22


16/22

16

other words, to maximize their social return.54

Where foundations have formerly been

perceived as elitist, cloistered, ineffective, and associated with extremely high

administration costs,55

the philanthropists of the philantrocapitalistic movement like eBay

founder and Chairman of the Board P. Omidyar run their philanthropic investment firms tosupport market-based approaches with the potential for large-scale, catalytic impact.

56This

also allows the mixing of for-profit and non-profit investments. Where governmental charity

or the classic foundations are most likely to be risk-averse, social investors of the

philanthrocapitalistic movement have the freedom to invest in projects like providing start-

up risk capital and microcredits with a high risk potential.57

In addition, the primary

intention of this new understanding of philanthropy is not the celebration of individual

achievements but again, maximum effectiveness. Therefore, those organizations are more

likely to engage in partnerships and cooperations to serve the cause.58

The most important approach within the philanthrocapitalistic movement is that it gives

hope to Carnegies idea of the system to be changed from within, without changing the

system as such. Even if capitalism is not immoral itself, but in consequence, causes immoral

behavior to successfully compete within the system, one major achievement of

philanthrocapitalism so far might be developing understanding that fire can actually befought with fire. But still, is it moralistically sustainable, if it takes exploiting the system to

change it for good? Due to this paradox, it is also essential for a philanthropic investor to

rethink the mechanisms of how the own wealth is actually generated to really make a

difference in society. What is the point of earning a high return in China if my money is

helping to build Dickensian working conditions? If I have $5 billion, and am giving $4 billion

away, do I really want a 17% return on activities that are wrecking the world?59

54Ibid, p. 14.

55Michael Bailin: Re-Engineering Philanthropy: Field Notes from the Trenches, in: Issues in Philanthropy,

Waldemar A. Nielsen, Center for the Study of Voluntary Organizations and Service: Georgetown University.

2003. URL: http://www.emcf.org/who-we-are/past-programs/transition-at-the-foundation-2000-2004/re-

engineering-philanthropy-field-notes-from-the-trenches/ [Sept. 28.2011]56

ON OMIDYAR NETWORK http://www.omidyar.com/approach [Sept. 23. 2011]57

Matthew Bishop: The Birth of Philanthrocapitalism, p. 15.58Ibid, p. 15.

59Ibid, p. 16.


17/22

17

4.4 Social responsibilityThe last point of critique that might be brought up against The Gospel of Wealthas well as

philanthrocapitalism in terms of The Giving Pledge is the shift of responsibility solely

towards the high-achievers of society. This would not only enhance the trend of a two-class

society, but further justify immoral behavior to the point of which a certain amount of

wealth has been accumulated to make a contribution to society that actually has an impact.

Is moral behavior an elite ideology that only applies to those who can economically afford

being moralistic in their actions?

By taking a look at the development and the growing impact of reporting corporate social

responsibility, this concern can easily be refuted. In modern society, it has become essential

for corporate governance to deal with the question of corporate citizenship the companys

role within the society it is surrounded by. Due to the effect of further standardization of

reporting corporate sustainability and the increased use of third-party assurance it can be

also assumed that corporate social responsibility will not only experience a further

professionalization but also an increased extension to the field of mid-sized and small

businesses.60

In todays culture, consumers, stakeholders, and employees have higher

expectations towards the companies surrounding them. A high percentage of people either

prefer their employer to be socially responsible or would require substantially higher wages

to work for a less socially responsible company.61 This does not only promote socially

responsible behavior, but also might lead to the development that every firm with a low

social responsibility profile could be driven entirely out of business.62

This empowers a

much wider part of society to enforce a general code of moral conduct.63

60KPMG International Survey of Corporate Responsibility Reporting. 2008, p. 5 - 15.

61Kjell Arne Brekke, Karin Nybor:Moral hazard and moral motivation:Corporate social responsibility as labor

market screening, in: Memorandum, University of Oslo, No. 25. 2004, p. 2. URL:

http://www.sv.uio.no/econ/forskning/publikasjoner/memorandum/pdf-filer/2004/Memo-25-2004.pdf[Sept.

23. 2011]62

Ibid, p.2.63

Of course one could ask the question of whether corporate social responsibility reporting has an actual

influence on how companies do business or if they just report what already has been achieved by their social

and environmental politics. Due to improved technology and a trend towards globalization, access to disclosed

internal information might be further simplified though. Cross references between different companies

reporting might not be subject to detailed investigations anymore, but also be available to a broader publicaudience. A development as such would help prevent any type of washing technique due to possible CSR

benchmarks, which would reveal the camouflaging nature of those strategies. This would contribute to


18/22

18

5. Conclusion5.1 A comparative summary

Are capitalism and sustainable morality compatible? Events like the current crisis are of

course caused due to the greed of few. Though it seems like capitalism has failed, one might

also say that governing institutions have prevented the built-in mechanisms of capitalism to

self-regulate. If financial losses of companies are socialized but returns are disproportionally

kept private, it might not only be the economic system that has failed. Bill Clintons famous

phrase Its the economy, stupid, as a reference to the lack of dealing with economic

problems in George H. W. Bushs political agenda in 1992, could then be updated and

reused under consideration of todays problems: Its politics, stupid.

Still, the answer to the question remains two-fold. In reference to the main aspects of the

The Gospel of Wealth, society seems to be torn between a hatred of taxation, [] a

celebration of the successful entrepreneur as the source of prosperity and wealth - a sense

that people get what they deserve out of the economy and that government has no

business stepping in to even the odds,64

on the one hand, and the urge to solve the

problem of the Rich and Poor, and to bring Peace on earth, among men Good-Will.65

Within this paradox, morals play the balancing factor between economic Darwinism and

social responsibility. In retrospect, capitalist market economy has changed a great deal. Not

only in respect to its size, but also in terms of competitive behavior and economic

selection.66 By taking a look at the problems of modern society, it seems like we have come

a long way from the idea of an ethical self-regulating market economy, capitalism was once

build upon. In accordance to the self-regulating mechanisms of capitalism, it also seems like

starting with the exception that proves the rule, society as a whole increasingly begins to

realize the shared responsibility that comes with economic success. Both individual

economic success and moral behavior are intrinsic motivations to human behavior. Because

the assurance of our private well-being will most likely have the stronger influence over our

actions, it also may be safe to say that an ethical understanding can, in a fully developed

preserving the original intention of CSR reporting, namely making corporate behavior and business as such in a

capitalistic society morally sustainable.64

Norton Garfinkle:The American Dream vs. the Gospel of Wealth, p. 17.65Andrew Carnegie: Wealth, p. 664.

66In reference to the concept of natural selection


19/22

19

state, be equally influential on our actions. It might just take a little longer to get there for

the single individual, even longer for a society as a whole. The initial trend was set by

Carnegie and kept alive by philanthropist like Bill Gates or Warren Buffet and a huge part of

society that forces companies to rethink their responsibility. Therefore, society is set toexperience the true Gospel concerning Wealth.

67

67Andrew Carnegie: Wealth, p. 664.


20/22

20

6. ReferencesMichael Bailin: Re-Engineering Philanthropy: Field Notes from the Trenches, in: Issues in

Philanthropy, Waldemar A. Nielsen, Center for the Study of Voluntary Organizations and

Service: Georgetown University. 2003. URL: http://www.emcf.org/who-we-are/past-programs/transition-at-the-foundation-2000-2004/re-engineering-philanthropy-field-notes-

from-the-trenches/ [Sept. 28.2011]

Robert Bellah: Coming around to Socialism: Roots of the American Taboo, in: Nation.

1974.

Matthew Bishop: The Birth of Philanthrocapitalism, in: Economist, Vol. 378 No. 8466.

2006.

Kjell Arne Brekke, Karin Nybor: Moral hazard and moral motivation: Corporate socialresponsibility as labor market screening, in: Memorandum, University of Oslo, No. 25.

2004. URL: http://www.sv.uio.no/econ/forskning/publikasjoner/memorandum/pdf-

filer/2004/Memo-25-2004.pdf [Sept. 23. 2011]

Warren Buffet: Stop Coddling the Super-Rich, in: The New York Times: The Opinion Pages,

2011. URL: http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-

rich.html [23. Oct. 2011]

Andrew Carnegie: Wealth, in: The North American Review, University of Iowa, Vol. 148,

No. 391. 1889.

Marie-Laure Djelic: How Capitalism Lost its Soul: From Protestant Ethics to Robber Barons,

in: Ethical Boundaries of Capitalism, Daniel Dianu, Radu Vranceanu. Aldershot: Ashgate

Publishing Ltd. 2005.

Milton Friedman:A Friedmann Doctrine: the social responsibility of business to increase its

profits, in: New York Times Magazine. 1970. URL:

http://www.springerlink.com/content/m2141pp14981487h/ [23. Sept. 2011]

Norton Garfinkle: The American Dream vs. the Gospel of Wealth: The Fight for a ProductiveMiddle-Class Economy. New Haven: Yale University Press. 2006.

Jonathan Haidt, Jesse Graham:When morality opposes justice: Conservatives have moral

intuitions that liberals may not recognize, in: Social Justice Research Vol. 20. 2006, p. 98

116.

Wilson Huhn: Abraham Lincoln Was a Framer of the Constitution, in: Washington

University Law Review. 2009. URL: http://lawreview.wustl.edu/slip-opinions/abraham-

lincoln-was-a-framer-of-the-constitution/


21/22

21

Peter Kok, Tom van der Wiele, Richard McKenna, Alan Brown:A Corporate Social

Responsibility Audit within a Quality Management Framework, in: Journal of Business

Ethics Vol. 31 No, 4. 2001, p. 288.

KPMG International Survey of Corporate Responsibility Reporting. 2008, p. 5 - 15.

Deepak Lal: Mortality and Capitalism: Learning from the Past, in: Working Paper Number

812, University of California. 2002. URL:

http://www.econ.ucla.edu/workingpapers/wp812.pdf [24. Sept. 2011]

Alasdair, Macintyre: Individual and social morality in Japan and the United States: Rival

conceptions of the self", in: Philosophy East and West, Vol. 40 No. 4. 1990.

Abraham Maslow: A Theory of Human Motivation, in: Classics in the History of Psychology,

York University Toronto. 2000. (Originally Published in Psychological Review, Vol. 50. 1943,

p. 370-396.)

ON OMIDYAR NETWORK http://www.omidyar.com/approach [Sept. 23. 2011]

Levy Rahmani:Soviet Psychology, International Universities Press: New York. 1973, p. 132.

Karvita N. Ramdas: Philanthrocapitalism: Reflections on Politics and Policy Making, in:

Symposium: The politics of philanthrocapitalism. 2011. URL:

http://pacscenter.stanford.edu/sites/all/files/images/KNR_philanthro_capitalism.pdf [28.

Sept. 2011]

Franklin D. Roosevelt, et. al.: The Public Papers & Addresses of Franklin D. Roosevelt. New

York: Harper. 1950.

Birgitte Slot, Hans Jrgen Whitta-Jacobsen: Economic Darwinism, in: Workingpaper. 2006.

URL: http://www.econ.ku.dk/okojacob/workpapers/ed.pdf [25. Sept. 2011]

Adam Smith: An Inquiry into the Nature and Causes of the Wealth of Nations. Oxford:

Clarendon Press. 1976.

Adam Smith: Essays on philosophical subjects. Oxford: Oxford University Press. 1980,(originally published 1796)

Titus Suciu:Is Capitalism Ethical?, in: Bulletin of the Transilvania, University of Braov, Vol.

2 Series V. 2009, p. 239.

Max Weber: The Protestant Ethic and the Spirit of Capitalism. (Translated by Talcott

Parsons) New York: Dover Publications Inc. 1958.


22/22

22

7. Erklrung

Ich erklre hiermit wahrheitsgem, dass ich:

1) die eingereichte Arbeit selbstndig und ohne unerlaubte Hilfe angefertigt habe,

2) auer den im Schrifttumsverzeichnis angegebenen Hilfsmitteln keine weiteren benutzt

und alle Stellen, die aus dem Schrifttum ganz oder annhernd entnommen sind, als solche

kenntlich gemacht und einzeln nach ihrer Herkunft unter Bezeichnung der Ausgabe (Auflage

und Jahr des Erscheinens), des Bandes und der Seite des benutzten Werkes, bei Internet-

Quellen unter Angabe der vollstndigen Adresse und des Sichtungsdatums, in der

Abhandlung nachgewiesen habe,

3) alle Stellen und Personen, welche mich bei der Vorbereitung und Anfertigung der

Abhandlung untersttzten, genannt habe,

4) die Abhandlung noch keiner anderen Stelle zur Prfung vorgelegt habe und dieselbe noch

nicht anderen Zwecken auch nicht teilweise gedient hat.

Mit ist bewusst, dass jeder Versto gegen diese Erklrung eine Bewertung der eingereichten

Arbeit mit Note "ungengend" zur Folge hat.

Erlangen, den 24.10.2011

the good news of wealth

Documents