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 poor.

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.


When Corporations Rule the World