The Capitalistic

Environment
Gerard Betros
Module 2
MGT2204 Business Ethics and Governance

Overview
Indentify the nature and key features of

capitalism
Understand the moral justifications for
capitalism
Critique capitalism
Identify the nature and key features of
workers co-operatives
Identify worker co-operativism as a possible
third way to organise

Ideology
A widely-held viewpoint that may be regarded

as social formulas
Describes a distorted or illusory form of
thought which departs from a criterion of
objectivity (Macey, 2000, p. 198).
Distorted reality versus true consciousness
Alternatives are often considered unimaginable
Capitalism the dominant ideology in the West
Mask covert forms of power and goes
undetected as a consequence

Capitalism
Schweickarts 3 features of capitalism:
Bulk of the means of production are privately
owned
Products are exchanged in a market so
competition determines prices (not
government)
Most people who work for pay work for other
people, who own the means of production.

Key Features of
Capitalism
Companies
The nature of corporations
The profit motive
Competition
Private property

Moral justifications for capitalism

The natural right to property
John Locke people are entitled to the fruits of
their work
Adam Smiths the invisible hand
When people are left to pursue their own
interests, they will, without intending it,
produce the greatest good for all.
in a two-horse race, back self-interest because
you know its trying.
Capitalism stimulates economic growth

Criticisms of Capitalism
Economic inequality
Rich get richer and the poor get poorer.
Defenders argue:

Government interference causes inequality (Liberals)

Some call for a modified system (Social Democrats)
Benefits outweigh the weaknesses

John Stuart Mill: To work at the bidding and for

the profit of another is not a satisfactory state

to human beings of educated intelligence, who
have ceased to think themselves inferior to
those they serve.

Criticisms of capitalism
Human nature and capitalism
Assumption that people make rational

decisions that are always in their best

interests.
People are inherently more socially-minded
than competitive (Peoples response in the
recent floods serves as a good example.)
The pursuit of material goods does not bring
happiness
Offers no higher sense of human purpose.

Criticisms of Capitalism
Capitalism breeds oligopolies that eliminate

competition and concentrate economic power.

The system of corporate welfare protects
many businesses from true marketplace
competition.
Competition is not a good.
Exploitation and alienation

Todays economic
challenges
The decline of manufacturing in the West
Outsourcing jobs
Trade deficits
Exclusive focus on the short-term
Changing attitudes towards work

A third way? Mondragon

LINK:
http://www.mondragon-corporation.com/eng/
Workers cooperative
A non capitalist firm that operates most
successfully in a capitalistic market
environment

Mondragons 10 Basic Principles

Open membership
Democratic organization
Worker sovereignty
Instrumental and subordinate nature of capital
Participation in management
Wage solidarity
Co-operation between co-operatives
Social transformation
Universal nature
Education