Professional Documents
Culture Documents
1. Q: Do you see evidence that the moral, ethical and spiritual foundation of the
A: Yes, there is much evidence that the moral, ethical and spiritual foundation of the
United States has seen much corruption among businesspeople, such as the use of
prostitutes, illegal drug use, alcohol addiction and gambling” (Nickels McHugh McHugh
34).
Our textbook also cites, “One of the dangers of free markets is that some people
let greed dictate how they act” (40). Some ethical examples are summarized in our
• Enron: “Former Enron chairman and chief executive officer Kenneth Lay,
former CEO Jeffery Skilling and chief accounting officer Richard Causey
removing billions of dollars of debt off its balance sheet. That made the
company’s financial picture look better than it was and artificially inflated
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Tina Coates
September 13, 2010
Harper College – MGT. 111
Case Study – “Foundations of the Capitalist System”
and former chief financial officer Mark Schwartz were convicted of stealing $600
“Some businesspeople have deceived the public about their products; others have
deceived stockholders about the value of their stock, all in order to increase executives’
Q: How does that affect the ability of capitalist proponents to promote capitalism in
A: Pure capitalism alone is fading fast in today’s world. “The nations of the world
have largely been divided between those that followed the concepts of capitalism and
those that adopted the concepts of communism or socialism” (42). “The trend, then, has
been for mostly capitalist countries (like the United States) to move toward socialism
(government takeover of banks, more involvement of government in health care), and for
mostly socialist countries, such as France and China, to move toward capitalism (more
John Gray, Professor at the London School of Economics, states: “In the end, the
answer to this question depends on how one conceives the good life. What a traditional
moralist views as family breakdown may be seen by a liberal as the exercise of personal
autonomy. For the liberal, personal choice is the most vital ingredient of a good life,
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Tina Coates
September 13, 2010
Harper College – MGT. 111
Case Study – “Foundations of the Capitalist System”
important. With regard to contemporary Western societies, I tend to a liberal view. But
the important point is not so much which of these conceptions one adopts. Rather, it is
this: though free markets reward some moral traits, they also undermine others. If they
emancipate individual choice, they at the same time corrode some traditional virtues. One
cannot have everything. No economic system can enhance every aspect of moral
character. All rely to some extent on motives that are morally questionable. Greed and
envy may be vices, but they are also economic stimulants. An economic system is good
to the extent that it harnesses human imperfections in the service of human welfare. The
choice is not between abstract models, such as the free market and central planning. In
the real world of history, neither has ever existed in the form imagined by its advocates.
No, the true choice is between different mixes of markets and regulation, none of which
will ever be entirely morally benign in its effects. A sensible mix cannot be achieved by
applying an ideal model of how the economy should work. Different mixes will be best in
different historical contexts.” (John Gray, A Templeton Conversation: Does the free
If China and India can prosper without adopting the tenets of Capitalism, why
should they consider changing to another form of government? Robert Reich declares,
“Visit China today and you find the most dynamic capitalist nation in the world. In 2005,
it had the distinction of being the world’s fastest-growing major economy. So where are
the Chinese communists? They’re in government. The communist party is the only party
there is. China doesn’t have freedom of speech or freedom of the press. It doesn’t tolerate
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Tina Coates
September 13, 2010
Harper College – MGT. 111
Case Study – “Foundations of the Capitalist System”
dissent. Authorities can arrest and imprison people who threaten stability, as the party
defines it. Any group that dares to protest is treated brutally. There are no civil liberties,
“China shows that when it comes to economics, the dividing line among the
world’s nations is no longer between communism and capitalism. Capitalism has won
hands down. The real dividing line is no longer economic. It’s political. And that divide
authoritarian government.”
“Well, maybe we’ve been a bit naive. It’s true that democracy needs capitalism.
Try to come up with the name of a single democracy in the world that doesn’t have a
capitalist economy. For democracy to function there must be centers of power outside of
government. Capitalism decentralizes economic power, and thereby provides the private
“But China shows that the reverse may not be true -- capitalism doesn’t need
democracy. Capitalism’s wide diffusion of economic power offers enough incentive for
investors to take risks with their money. But, as China shows, capitalism doesn’t
necessarily provide enough protection for individuals to take risks with their opinions.”
Considering how America is viewed as a nation who has it’s fallen in moral,
ethical and spiritual foundation, why would other countries, such as China and India,
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Tina Coates
September 13, 2010
Harper College – MGT. 111
Case Study – “Foundations of the Capitalist System”
want to change their systems if they can prosper economically in the form of government
they now have? “Open markets in today's transforming global economy—with new
technologies and the rise of developing countries such as China and India—create both
new opportunities and new pressures on competitiveness and wages. This makes it even
more important that the U.S. political system rises to meet its challenges.” (Robert Rubin,
people feel that the system is not fair, they can elect new politicians to change the rules.
“Over time, voters in mostly free-market countries, such as the United States, have
elected officials who have adopted many social and environmental programs such as
Social Security, welfare, unemployment compensation and various clean air and water
acts” (42). For example, “Fiscal policy refers to the federal government’s efforts to keep
things as highways, social programs, education, infrastructure, defense, etc. (49)”. If the
citizens do not like the way things are going, they have the freedom to replace the people
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Tina Coates
September 13, 2010
Harper College – MGT. 111
Case Study – “Foundations of the Capitalist System”
economy without each one. What happens to freedom, fairness and moral and ethical
behavior?
(2) a freely elected government that has internal checks and balances, and (3) moral,
ethical and spiritual values that are part of the very fabric of the country and business
system.
“Smith believed freedom was vital to the survival of any economy, especially the
freedom to own land or property and to keep the profits from working the land or running
the business. He believed people will work long and hard if they have incentives for
doing so – that is, if they know they’ll be rewarded. As a result of those efforts, the
economy would prosper, with plenty of food and all kinds of products available to
everyone” (33). If people did not reap a reward of some type for their hard work, they
would not be motivated to continue to work hard and make sacrifices. Furthermore, if
they had to be forced to produce for the country, only the strongest, smartest and most
manipulative people in that society would survive, leaving the weakest or less intelligent
to not be required to work as hard as the others, which would lead to rebellion and
discontent, thus provoking ill mannered behavior and the potential for war within and
abroad.
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Tina Coates
September 13, 2010
Harper College – MGT. 111
Case Study – “Foundations of the Capitalist System”
Without a freely elected government that has internal checks and balances, the
citizens would revolt against a system that was unfair; the government could make risky
decisions that could adversely affect the citizens’ well-being, and then the people would
Without moral, ethical and spiritual values, citizens that prospered would not
want to reach out and lend an “invisible hand”. Greed would lead company executives to
steal, thus bankrupting the investors and employees that helped the company to succeed,
thus causing more dependency on the government for assistance and sustenance. Other
companies and countries would not want to conduct business with us because of a lack of
trust or bad reputation, thus resulting in problems with importing and exporting goods.
A: I believe that the weakest part of the system today is the government’s “internal
checks and balances”. It seems that politicians today are out to satisfy the needs of their
own agendas and not concerned about the needs of the people. The government argues so
A: We must educate our citizens about the issues that plague our country and provide
solutions to our politicians that our government has not attempted to implement. If our
elected officials cannot accomplish things like reducing the deficit, providing jobs to the
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Tina Coates
September 13, 2010
Harper College – MGT. 111
Case Study – “Foundations of the Capitalist System”
unemployed, giving incentives and assistance to people that desire to own businesses; if
they cannot take their eyes off of themselves and their agendas for a single minute to look
at the real needs of the country and population, then those politicians must be removed
from office. Education is the key to reform; but without money, power and influence,
how can the message be transmitted? Who has the guts to take a stand? Will that still
Works Cited
Business”. Print.
• Rubin, Robert. “Getting the Economy Back on Track.” Newsweek, 29 Dec 2009.
Web.
• Gray, John. “A Templeton Conversation: Does the free market corrode moral
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