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Worldcrunch

Markets And Morals: A Chinese Case For Capitalism

Essay: China is consumed by the ethical rot that seems to pervade society, from official corruption to tainted food. State TV and others in Beijing are quick to blame market forces for this "moral debacle." But one writer takes a closer look, and sees quite the contrary.

Article illustrative image Partner logo A shopping mall in Shanghai (troismarteaux)

BEIJING - From the endless scandals of dubious milk or poisonous capsules made of recycled leather, the moral climate has become one of the most pressing concerns among the Chinese media and academia. Some call it “social defeat,” others talk about China’s “collapse of morality.” Whatever they call it, the subject is basically the same.

Yet what is also worrying is how programs produced by CCTV, the Chinese official media, all come to the same conclusion about these scandals: it is the fault of the market economy, driven by a bunch of greedy and unscrupulous businessmen who have lost sight of their moral bottom line in the pursuit of profits. This corresponds perfectly with Marxism, still the Chinese Communist Party’s ideological education guideline, where private profits are seen as the driving force to make people willing to trample over the law and the lives of others.

And so is the market economy really to blame? It’s hardly convincing since the places where this economic profit model is more developed should also be the places with the least morality. Yet this is simply not true. If we take North America or Europe as examples of places where the level of the free market system and per capital income is much higher than China, not only does the phenomenon of a moral breakdown not exist, but scandals of official corruption, bribery, and food security issues are also much scarcer.

The market economy can actually encourage moral values. Whether we talk about pre-modern China or in the West today, shops and companies that have been around for decades -- or even centuries -- often abide by stringent quality requirements and professional ethics. In other words, with the help of competition, the market economy rewards those with virtue and integrity.

Seemingly, in a company, workers who are most likely to be promoted are those with not just outstanding capability but also reliability. Sometimes, the standard of one’s character can be even more important than one’s competence.

The logic of moral breakdown

So what can explain China’s moral debacle in so many differnt facets of life?  Montesquieu and Baron d'Holbach, both prominent figures in the French Enlightenment, believed that a country’s moral status, social atmosphere and civility are to a great extent shaped by the country’s political status, institutional arrangements and governmental behavior.

The American scholar Angelo Codevilla simply puts it this way as the title of his book The Character of Nations: How Politics Makes and Breaks Prosperity, Family, and Civility. There’s a lot worth learning from his theoretical perspective. First, a society’s morality is directly under the influence of its rule of law. A society where illegal market behavior is not punished will encourage such behavior. The result will be bad money driving out the good.

Unfortunately this is precisely China’s current situation: after 30 or more years of reforms, the sound rule of law is still not established. From the world’s experience, no country where the rule of law is absent can ever shape a society with good citizens, moral business ethics and social practices. Therefore, the market economy is not to be blamed, but rather the “hidden rules” which exist in every corner of our society. If a businessman who manufactures and sells fake medicine does not go broke or go to jail, but manages to continue his business by bribery and relations, the bad example will obviously be repeated.

Besides, morality is influenced by government intervention in market activities. When a government’s control is too close and the burden on business too heavy, too many resources will be at the disposal of the government, and this will almost surely endanger morals. This is because repressive control and a high tax burden will induce or force enterprises into illegal operation. And once the companies choose to go into irregular operations, they are bound to avoid all possible regulatory controls by corrupting the regulatory officials. 

When the government disposes of too many resources, those who can acquire huge orders through bribery will adopt rent-seeking as their main business strategy. Such businesses won’t have any interest in fair competition, nor in raising the quality of their business; nor will they upgrade their technology or improve their efficiency so long as they enjoy their “political marriage.” The collusion of rights and interests between Liu Zhijun, China’s now jailed former Minister of Railways, and the businesswoman Ding Shumiao is the best example of such a loophole.    

Official behavior is society’s moral weathervane 

Much too often the public sees the presence of officials at extravagant banquets. If the lavishness of officialdom (high society in the view of a lot of ordinary people) is regarded as a symbol of prominent identity, it’s no wonder that it is very difficult to shape a society in which thrift and prudence are considered to be virtues.

In a country where the political class possesses full power, and that power operates in a top-down manner, it’s bound to shape a social atmosphere of rigid hierarchy rather than an environment of freedom, equality and consultation. This in turn makes the ones who are at the top of the power pyramid autocratic and supercilious, while the ones at the bottom are more likely to take fawning and flattering as the essence of their duty. This is yet another mechanism that shapes morality.

To put it simply, only when the government’s actual policy corresponds to its stated objectives -- when officials generally practice what they preach to the public -- can a country build an honest basis of political order and legitimacy. The government’s announced statistics are credible. The education system really encourages each student to develop integrity. The media reports objectively what’s really happening. Only then can the virtue of honesty encourage every citizen.

Unfortunately what one feels anxious about in today’s China is that private lies are most likely to be the continuity of public lies. Corporate frauds are but the extension of public frauds. When the public domain is not generally honest, it’s asking the impossible if it expects to shape a country’s morality.

There’s no doubt that the market economy has its limits and its effects on a nation’s moral status. Nevertheless, the influence won’t necessarily be a negative one. It is indeed absolutely possible for it to coexist with virtues. Compared with the market economy, the tripod of political status, institutional arrangements, and governmental behavior have a rather greater impact on morals. When a society appears to heading to a universal moral debacle, one should reflect more on its politics than on the market economy.

Read the original article in Chinese.

Photo - troismarteaux

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About this article source Website: http://eeo.com.cn/

The Economic Observer is a weekly Chinese-language newspaper founded in April 2001. It is one of the top business publications in China. The main editorial office is based in Beijing, China. Inspired by the Financial Times of Britain, the newspaper is printed on peach-colored paper.

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