Tuesday, March 17, 2009

Capitalism Needs a Death Penalty

The United States is among the most religious nations on the planet, but when it comes to money, our American culture is near the bottom in global metrics with its morality and ethics. This blog, however, isn’t about the disconnect between religion and basic human goodness. I’ve beat that subject to death. I’m writing today about free market capitalism, and my thesis is that it doesn’t work in America anymore because it doesn’t work in the absence of strong morality and ethics.

Growing up, I never understood why American intellectuals were so infatuated with communism during the Great Depression of the 1930s. That’s because I was looking back on that time from the 1950s, and during that decade our free market capitalism worked just fine. But now I’m old, and America’s economic system is broken again, and now I understand why the brighter people in our society don’t automatically accept the supremacy of the free market capitalistic system. It hasn’t worked well for our nation for ten years now.

There is, however, a place where free market capitalism works well, even today. That place is China. The system works there because it is combined with the liberal use of executions and the death penalty for unethical behavior, and that— in turn— deters the kinds of system failures that have brought down our economy. Consider China’s tainted milk scandal. Two milk company executives knowingly put out milk laced with bacteria to make a quick buck, and a number of Chinese children died from drinking that milk. After a brief hearing, the company executives were executed with a bullet in the back of the head. Four months after that, two American peanut company executives in Georgia knowingly put salmonella-tainted peanuts into the United States food chain because they knew they could do it with impunity. You don’t need to be a revisionist historian to see that those two fat goobers in Georgia would have made a different decision about the salmonella laced peanuts if they were living and working in China.

If Bernie Madoff had pulled his Ponzi scam in China, his name would have made the newspapers just one time— under obituaries. All of the current posturing and outrage over the $160 million in bonus money paid to AIG executives would be unnecessary in China. The idiotic affair would be settled quietly with one simple phone call from the government secret police. This isn’t to say that morality and ethics are better in China than in America. That’s probably not the case. It’s just that the system in China works as though everyone was ethical. Here’s the thing— in the absence of strong ethical standards, no sane person will ever turn down several million dollars because of the threat of a slap on the wrist.

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