The Moral Justification of Injustice
by David Korten
from the book
When Corporations Rule the World
published by Kumarian Press
The moral philosophers of market liberalism perpetrate ...
distortions by neglecting the distinction between the rights of
money and the rights of people. Indeed, they have equated the
freedom and rights of individuals with market freedom and property
rights. The freedom of the market is the freedom of money, and
when rights are a function of property rather than personhood,
only those with property have rights. Furthermore, by maintaining
that the only obligation of the individual is to honor contracts
and the property rights of others, the "moral" philosophy
of market liberalism effectively releases those who have property
from an obligation to those who do not. It ignores the reality
that contracts between the weak and the powerful are seldom equal,
and that the institution of the contract, like the institution
of property, tends to reinforce and even increase inequality in
unequal societies. It legitimates and strengthens systems that
institutionalize poverty, even while maintaining that poverty
is a consequence of indolence and inherent character defects of
The most basic premise of democracy is that each individual
has equal rights before the law and an equal voice in political
affairs-one person, one vote. We can rightfully look to the market
as a democratic arbiter of rights and preferences-as market liberals
advocate-only to the extent that property rights are equally distributed.
Although a market can allocate efficiently with less than complete
equality, when 358 billionaires enjoy a combined net worth of
$760 billion-equal to the net worth of the poorest 2.5 billion
of the world's people-it cannot be assumed that the market will
function either justly or efficiently, and the market's very legitimacy
as an institution is called into question.
Publications such as Fortune, Business Week, Forbes, the Wall
Street Journal, and The Economist-all ardent advocates of corporate
libertarianism-rarely if ever praise an economy for its progress
toward eliminating the poverty that leaves more than a billion
people living in absolute deprivation or making strides toward
greater equity. Rather, they regularly evaluate the performance
of economies by the number of millionaires and billionaires they
produce, the competence of managers by the cool dispassion with
which they fire thousands of employees, the success of individuals
by how many millions of dollars they acquire in a year, and the
success of companies by the global reach of their power and their
ability to dominate global markets.
Take, for example, the cover story of the July 5, 1993, issue
of Forbes, trumpeting the extraordinary accomplishments of the
free market under the banner "Meet the World's Newest Billionaires":
"As disillusion with socialism and other forms of statist
economics spreads, private, personal initiative is being released
to seek its destiny. Wealth, naturally, follows. The two big openings
for free enterprise in this decade have come in Latin America
and the Far East. Not surprisingly, the biggest clusters of new
billionaires on our list have risen from the ferment of these
two regions. Eleven new Mexican billionaires in two years, seven
more ethnic Chinese. "
Taking a slightly more populist view, Business Week presented
a special report titled "A Millionaire a Minute" in
its November 29, 1993, issue. It included this breathless account
of what the free market has accomplished in Asia:
"Wealth. To most Asians just one generation ago, it meant
moving to the U.S.-or selling natural resources to Japan. But
now, East Asia is generating its own wealth on a speed and scale
that probably is without historical precedent. The number of non-Japanese
Asian multimillionaires is expected to double to 800,000 by 1996....
East Asia will surpass Japan in purchasing power within a decade.
And with savings increasing $550 billion annually, it is becoming
the world's biggest source of liquid capital. "In Asia,"
says Olarn Chaipravat, chief executive of Siam Commercial Bank,
"money is everywhere." . . . There are new markets for
everything from Mercedes Benz cars to Motorola mobile phones to
Fidelity mutual funds.... To find the nearest precedent, you need
to rewind U.S. history 100 years to the days before strong unions.
securities watchdogs and antitrust laws."
Such stories do not simply glorify the pursuit of greed, they
perversely elevate it to the level of a personal religious mission.
Never mind that although a few Asians have made vast fortunes
and a tiny minority of Asians have risen to the overconsumer class,
the suffering of the 675 million Asians who live in absolute poverty
continues unabated. In a special 1994 issue, "21st Century
Capitalism," Business Week confirmed that market economics
is a class issue and that the corporate libertarians are clear
as to whose class interests they are advancing:
"The death throes of communism clearly gave birth to
the new era, leaving most nations with only one choice-to join
. . . the market economy.... Almost 150 years following the publication
of the Communist Manifesto, and more than half a century after
the rise of totalitarianism, the bourgeoisie has won. "
The self-proclaimed "value-free objectivity" of
economic rationalism aligns easily with the elitist moral philosophy
of market liberalism. Seldom has this been more starkly revealed
than in a widely publicized staff memo written by Lawrence Summers
in his capacity as chief economist of the World Bank. Summers
argued that it is economically most efficient for the rich countries
to dispose of their toxic wastes in poor countries, because poor
people have both shorter life spans and less earning potential
than wealthy people. In a subsequent commentary on the Summers
memo, The Economist argued that it is a moral duty of the rich
countries to export their pollution to poor countries because
this provides poor people with economic opportunities of which
they would otherwise be deprived.
In another self-justifying twist of moral logic, economic
rationalists commonly argue that rich countries best help poor
countries by increasing their own consumption to increase demand
for the exports of poor countries, thus stimulating their economic
growth and lifting their poor up from poverty. Denying or ignoring
the existence of environmental limits, they maintain that there
is no moral or practical basis for reducing the consumption of
the rich to relieve the deprivation of the poor. To the contrary,
they argue, it is the moral duty of the rich to consume more to
create more growth to provide more opportunities for the poor-a
convenient rationalization for tax breaks for investors and the
colonization of ever more of the world's resources to support
self-indulgent consumption by those who can afford it. It is scarcely
surprising that economic rationalism and market liberalism appeal
to people of wealth.
If economic rationalists and market liberals had a serious
allegiance to market principles and human rights, they would be
calling for policies aimed at achieving the conditions in which
markets function in a democratic fashion in the public interest.
They would be calling for measures to end subsidies and preferential
treatment for large corporations, break up corporate monopolies,
encourage the distribution of property ownership, internalize
social and environmental costs, root capital in place, secure
the rights of workers to the just fruits of their labor, and limit
opportunities to obtain extravagant individual incomes far greater
than productive contributions.
Corporate libertarianism is not about creating the market
conditions that market theory argues will result in optimizing
the public interest. It is not about the public interest at all.
It is about defending and institutionalizing the right of the
economically powerful to do whatever best serves their immediate
interests without public accountability for the consequences.
It places power in institutions that are blind to issues of equity
and environmental balance.
Millions of thoughtful, intelligent people who are properly
suspicious of big government, believe in honest hard work, have
deep religious values, and are committed to family and community
are being deceived by the false information and the distorted
intellectual and moral logic repeated constantly in the corporate-controlled
media. They are being won over to a political agenda that runs
counter to both their values and their interests.