The Morality of Capitalism Sri Lankia

8/9/2019 The Morality of Capitalism Sri Lankia

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The Morality ofFree-Market

CapitalismDr. Tom G. PalmerAtlasNetwork.org

31.March.!1Colom#o$ %ri &a'k


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Fr()(ric *astiat+s A),ice

• “There is only onedifference between a badeconomist and a good one:the bad economist confineshimself to the visible effects; the good economisttakes into account both the

effect that can be seen andthose effects that must be foreseen.”

– Frédéric Bastiat, “hat !s "een and hat!s not "een”


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Does this so') familiar

• “The state is the great

fictitious entity by which

e#eryone seeks to li#e at

the e$%ense of e#eryoneelse.”

– Fr()(ric *astiat$ /The%tate$0 12


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t+s commo' to hear that freemarket e4cha'ges5.

• Are i'here'tly immoral – 6r if 'ot immoral$ the' at #est amoral

• Pro)ce sel7sh$ gree)y$ materialistic$a') 'cari'g people

• Despoil the e',iro'me't – 8tc.$ etc.$ etc.


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s Free 84cha'ge *ase) o' /Gree)0or /%elf 'terest0

• Gree) or e,e' selfi'terest ca' #eharmfl if 'ot

co'strai'e) #y theright i'stittio's$which re9irerespect for the

rights :/property0;of others

• t is a mistake to

co'fse /selfi'terest0 with/sel7sh'ess$0 i.e.$)isregar) for the

i'terests of others – %elf-i'terest ca'

refer to thei'terests of sel,es$

which i'cl)e thewell #ei'g ofothers$ whetherfamily$ frie')s$ or

e,e' stra'gers i''ee)


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There s Nothi'g Morally %spect a#otNegotiati'g for the *est Deal< t Makes

Possi#le Mtally *e'e7ical Agreeme't a')

Cooperatio'• /' #si'ess )eals i'the real worl) #othparties to a

tra'sactio' seek theirow' gai'$ a')throgh 'egotiatio'so,er terms :i'cl)i'gprice a') 9ality;#oth si)es ca' reachagreeme't.0 – Mao =shi Mao =shi


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At the root of hatre) of the market is a fallacy< thefallacy that the #e'e7t of o'e perso' mst come

at the e4pe'se of a'other

• /8ach i')i,i)al isi'tereste) i' the ge'eralprosperity of all5.Thepositio' of a 'atio'$ i'

respect of its 'eigh#ors$is a'alogos to therelatio' of o'e of itspro,i'ces to the others$

or of the co'try to thetow'> it has a' i'teresti' their prosperity$ #ei'gsre to pro7t #y their

ople'ce.0 – ?ea'-*aptiste %ay :1@@ B 13;


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To ')ersta') mtal #e'e7t a') ,ale$ ithelps to focs o' the 'atre of /game payos0

• ero %m :!; – The sm of the payos

is Eero

• = H !• Positi,e %m :;

– The sm of the payos

is greater tha' Eero

• = I !

• Negati,e %m :-;

– The sm of the payosis less tha' Eero

• = J !

Free a')

Prosperos%ocieties Ke9ireKles a')Free)oms that

Make Positi,e %mGames the Norm

+


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Free 84cha'ge

• s #ase) o' a simple pri'ciple< 6ther People Do'+t *elo'gto Me –f wa't their ser,ices or what #elo'gs to them$ mst i')cethem to pro,i)e a ser,ice or tra'sfer their rights to me

• 84cha'ge #ase) o' free co'se't re9ires a #aseli'e< – The #aseli'e is what yo a') retai' if we choose 'ot toe4cha'ge

• Le call that Property –

' 6'e+s Perso' –' 6'e+s Free)om

–' 6'e+s 8state$ characteriEe) #y the /Three D+s0 –De7'a#le

–Defe')a#le

–Di,esti#le


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Property Kights A,oi) the /Trage)yof the Commo's0

• /f )o'+t catch the 7sh$someo'e else will5..0

• f e,eryo'e thi'ks that$the' all the 7sh are

caght a') there are'o'e left..

• Property rights help s toco'ser,e resorces

• Property rights create

i'ce'ti,es to ma4imiEethe ,ale of o'e+s assetsB k'ow' as the /capital,ale0

f my cattle )o'+t eat that grass5%omeo'e else+s will8ach takes more tha' is sstai'a#le

a') there is 'o grass left This is a loomi'g crisis i' Nami#ia


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“Property Rights” or “Hum an Rights”?Property rights are hum an rights

• “his Property, that is, his Life,Liberty and Estate…”• John Locke, Second Treatise of

Government , Chap !"", #$%

• “Lives, Liberties, and Estates,&hich " ca'' by the (enera' name,Property ”• John Locke, Second Treatise of

Government , Chap "), #*+

• “y Property " m-st be

-nderstood here, as in otherp'aces, to mean that Property&hich .en have in their Personsas &e'' as Goods”• John Locke, Second Treatise of

Government , Chap )!, #*%/


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%ystem *ase) o' Free

84cha'geFree Market “Capitalism”

• /5that s#species of all thesystems characteriEe) #ypri,ate property$ which carriesot 'ew com#i'atio's offactors of pro)ctio' a')i',ol,i'g the creatio' of

cre)it50 ?oseph %chmpeter$/Ca' Capitalism %r,i,e0

• /5a system i' which pri,atei')i,i)als take i'itiati,es withtheir ow' capital to B sally

to e'ha'ce pro)ctio'$ #t topro)ce somethi'g that theyca' sell o' the market for apro7t50 ?oyce Apple#y$i'ter,iewe) o' her 'ew #ook

The Relentless Revolution: AHistory of Capitalism

$reglate) #y the rle of law a')#y ethical co'se'ss>0 “the ageof innovation,” Deir)reMcCloskey$ ourgeois !ignity

• t is a' eco'omic system5• 5a legal system5

• 5a cltralsocialsystem5of rele'tless

i''o,atio' resti'g o'e9ality of well )e7'e)a') legally secre rights:i'cl)i'g /careers ope'

to tale't0; a') o')ece'traliEe) i''o,atio'a') processes of trial a')error throgh the,ol'tary processes of

market e4cha'ge


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*t Free Market Capitalism s More tha' merely LellDe7'e)$ &egally %ecre$ a') Tra'sfera#le Property

• They also e'tail a Cltre of

–8'trepre'ership

–''o,atio'

–

%er,ice –A))i'g Oale

–Kespect for Kle of &aw

a') ts 89al Applicatio'


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Mo)er' markets are characteriEe)#y what the eco'omist ?oseph

%chmpeter calle) /creati,e)estrctio'.0• /the pro#lem that is

sally #ei'g ,isaliEe)is how capitalisma)mi'isters e4isti'gstrctres$ whereas the

rele,a't pro#lem ishow it creates a'))estroys them.0 – ?oseph %chmpeter$ Capitalism,

"o#ialism, an$ !emo#ra#y


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The alter'ati,e to /Free Market0 is 'otlo'ger /%ocialism$0 #t /Cro'yism0

• t comes from theGreek /QRSUV0 Bwhich mea's /lo'g-term0

• t refers to /frie')s0 oflo'g sta')i'g$ #t hascome to #e se) i' these'se of people who

will spport politicia'si' e4cha'ge for fa,orsfrom them

• t rests o' the a#ility ofthe hol)ers of politicalpower to /#e') the rles0or apply them ar#itrarily

to fa,or some at thee4pe'se of others.

• There is /cro'y-capitalism0 a') /cro'ysocialism0 B a') #oth are

'fair a') 'Wst.• Cronyism is a $isease%

Free&market #ompetitionis the #ure%


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Bfree)om of the participa'ts i' markets B ma)ethe )iere'ce #etwee' wealth a') po,erty5

a') still )oes


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/')i,i)als ha,e eco'omic free)om whe'

property they ac9ire withot the se offorce$ fra)$ or theft is protecte) fromphysical i',asio's #y others a') they arefree to se$ e4cha'ge$ or gi,e their propertyas lo'g as their actio's )o 'ot ,iolate thei)e'tical rights of others. A' i')e4 of

eco'omic free)om shol) measre thee4te't to which rightly ac9ire) property isprotecte) a') i')i,i)als are e'gage) i',ol'tary tra'sactio's.0XX ?ames Gwart'ey a') Ko#ert &awso' et al.$ '#onomi# Free$omof the (orl$: )**+ Annual Report Fraser -nstitute of Cana$a.

Yey to a Dy'amic 8co'omy is 8co'omic Free


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%ri &a'ka 1Z! - !1


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-n#entives an$ -nstitutions

Matter 'ce'ti,es gi,e

sig'als toratio'al actorsa#ot what willa),a'ce theirprposes

'stittio's gi,eform toi'ce'ti,es

Lhat i'ce'ti,es)o )iere'tpeople ha,e to

'ce'ti,es gi,esig'als toratio'al actorsa#ot what willa),a'ce theirprposes

'stittio's gi,eform toi'ce'ti,es

Lhat i'ce'ti,es)o )iere'tpeople ha,e to


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A *si'essma' 84plai's the Kelatio'ship *etwee' Tra)e a') Peace i' Pea#e, /ove, 0 /i1erty

/Lhe' yo seeother people ascstomers$ it)oes'+t really occr

to yo to wa't toshoot them or hrtthem. Tra)e is scha #eatifl

alter'ati,e to,iole'ce a')coercio'.0 -- Chris Kfer

C i li i 8 h Di i i h h


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Capitalistic 84cha'ge Dimi'ishes the&ikelihoo) of Lar 5. A') that s a

Goo) Thi'g/Perhaps the mostge'eral eect of tra)e isthat it tra'sforms theo#Wecti,e i'terests of

'atio's$ e'sri'g that theol) logic of pre)atio' isi'creasi'gly recog'iEe)to #e a'achro'istic. t issimply 'ot worth the

eort to steal mch ofwhat col) #e pl')ere)to)ay$ e,e' as mch ofwhat is worth steali'gca''ot #e pl')ere).0 B

8rik GartEke


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IT’S BEEN UNDERSTOOD SINCE

ANCIENT TIMES: VOLUNTARY

TRADE CREATES CIVILIZATION

“For the Cyclops have noships with crimson prows

No shipwrights there to buildthem good strong craft

That could sail them out to

foreign ports of callAs most men risk the seas to

trade with other men.”

Homer, The Odyssey


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A Positi,e %m %ocietyKe9ires Free-Market

/Capitalism0


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A Positi,e %m %ocietyKe9ires Free-Market

/Capitalism0

The Morality of Capitalism Sri Lankia

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