Skip to main content

Stray Thoughts: Ethical Capitalism

👔 I Owe My Soul to the Company Store...

There's a phrase that gets bandied about in center-left socioeconomic discourse: "There is no ethical consumption under Capitalism." It's an expression of frustration--and often outright dismissal--at one's inability to make sound ethical consumer decisions due to a lack of choices provided by the market. It's a popular enough sentiment that the better part of the third season of The Good Place was dedicated to it. And it stems from a real dilemma. Most people are basically good most of the time, but we live in a society that inhibits us from acting on our goodness. Nobody goes to the store thinking "Imma exploit me some Indonesian child labor!" We just want a good deal on tennis shoes.

So with this essay I would like to explore some of the mechanisms behind this dilemma and relate it to our current political climate and perhaps point out some very obvious solutions.

First a little groundwork. The term "Capitalism" is a bit loaded, as it covers a pretty broad swath of economic ideology, so let's get specific. Economic ideology exists on a spectrum from "mostly unmanaged" to "mostly managed", where something like Soviet Communism is far at the "mostly managed" end, Chinese Communism is slightly closer to the center, contemporary Socialism would be more or less in the middle, Western European Capitalism would fall somewhere between the middle and "unmanaged" and American Capitalism falls pretty far to the "unmanaged" end. And for the purposes of this essay, we're talking about American Capitalism. In the discourse you'll hear it referred to as "Late Capitalism" or "Crony Capitalism" or "Neo-liberalism" or "The Second Gilded Age" and it's essentially the brand of extreme Laissez-faire ideology that was popularized by Ronald Reagan and Margaret Thatcher. So whenever I refer to "Capitalism", this is where we are on that spectrum.

So, the assumption in leftist discourse is that Capitalism is inherently immoral, a system designed to exploit the lower class for the benefit of the wealthy. The evidence for this is... well... the constant exploitation of the lower class for the benefit of the wealthy. And while I certainly understand this framing, I think it's an oversimplification. Because the fact of the matter is that markets are neither moral nor immoral. What they are is reductionist. This is what makes them so efficient, but it's also what makes them callous. Markets tend to reduce everything to its short-term dollar value. Now, in theory, this should not be a problem in and of itself. One of the assumptions of a free market is that buyers and sellers have perfect--or at least perfectly symmetrical--information about the products being bought and sold. A consumer who wishes to make ethical purchases might have to pay a "morality" premium in order to get non-exploitative goods. Again, in theory, this should work. In practice, however, it's a different story.

This is because modern markets add multiple layers of abstraction to the transaction. In the Adam-Smithian ideal of Capitalism, his so-called "enlightened self-interest" model, transactions would be happening for the most part directly between producers and consumers. You buy your meat directly from the butcher. You buy your produce directly from the farmer. Perhaps there would be an intermediary--merchants were a thing back then--but you would be aware of the people you were transacting with and most likely have familiarity with most of the people involved in the transaction. E.g., you buy your meat from a butcher who gets animals from a rancher, but you would probably be at least vaguely familiar with both people as they are all members of your community. You buy your clothes from the tailor, but you also know the weaver, the dyer, the sheepherder, and so forth.

This is important because humans are a communal animal. We don't like to betray our neighbors. We don't want to risk being ostracized. Modern Capitalism removes community from the equation entirely. You buy your meat from the grocery store--not from a human at the store, but from a stack of similarly-packaged meats in the meat aisle. You likely don't know the person behind the deli counter. And you have even less connection to the rancher who raised it. You go to a store and interact with an employee of the store who only knows that goods are delivered by the truck which is in a different vertical altogether as its part of a complicated supply chain. Even if you wanted to find out if the chicken you're buying was raised ethically, the deli counter worker doesn't know, and is a good eight or ten steps removed from anyone who might.

But why is it like this? Well, as I've already said, markets reduce things to their dollar value and community actively impedes that reduction. But it's even a bit more insidious than that. By removing any connection between consumption and production, or between consumers and producers regarding each other as people rather than entities, markets effectively divorce actions from the consequences of those actions. Let's repeat this and underline it just to make it completely clear: A key mechanism of modern Capitalism is to separate actions from consequences.

Again, no one sets out to exploit child labor when they go to [insert big-box retailer here], but since the consequences of your dollar spent are invisible to you, you have zero incentive to not exploit child labor. And this cuts both ways. It affects producers as well. Complex corporate hierarchies mean that decisions made at the top must be enforced by people at the bottom, regardless of the harm that they may cause consumers. How many times have you wanted to complain about a situation in a store only to find out that no one there has any power to address it. It's just policy.

So what can we do about this?

What may surprise you is that I'm not immediately going to suggest "buying local," for a couple of reasons. First, the phrase is often reduced to food, and locally-sourced food is a complicated topic. There's nothing wrong with the whole farm-to-table movement, it's just not a solution in and of itself. Most people don't have the luxury to buy local, and buying local isn't always more ethical than importing, because supply chains aren't inherently bad. Brazil is way better at growing oranges than Montana, and shipping food is pretty efficient--far more efficient than, for instance, shipping people. The scant studies on locavorism suggest that the environmental and ethical impact of buying local food is about... zero. It's not worse, but it's not better either. And again, this is not a reason not to do it if it brings you joy, just something to keep in mind when trying to make ethical decisions.

So rather, I will point you towards the idea of supporting local businesses. Local restaurants instead of chains, credit unions instead of banks, grocery stores over dollar stores, small things that will keep money in your community and have you interacting with the same people over and over. Often times this does include food--and that's fine. But the important thing here is community. I'm not going to cheat my credit union because it's literally half a block from my house and those are my neighbors in a very real sense.

Additionally, I'm an advocate for on-shoring. And, given that the last few years have exposed the inherent fragility of complex supply chains, I'm not the only one tooting this particular horn. So yes, let's simplify supply chains with an eye towards making them more robust and less dependent on potentially hostile nations. We should be able to get plastics without having to buy them only from China, or semi-conductors without having to buy them only from Taiwan. Not because trade is bad or protectionism is good--but these complex dependencies lead to multiple points of failure which can cascade across the entire economy, and the US has spent too long imagining itself as a service-only economy. Fortunately, there has been government action under the current administration to start bringing some of this work back within US borders.

Finally--and this could honestly be its own post--don't rely only on your spending to do good. There's a tendency within Capitalism to commoditize good will, to convince people that if they buy this bracelet or spend money through this program that those purchases actually count as charity. They don't. Not in any meaningful way. I mean, you can still do them, I still donate to the ACLU through Amazon Smile, but I'm not kidding myself that my Amazon purchases are charity, or that this pittance makes up for any of their abusive labor practices. If you want to do good in the world, donate or volunteer rather than solely relying on your purchases.

Is there more that we can do? Yes and no. We as individual consumers don't have a lot of control over the supply chains that feed the businesses we patronize. Some of these things have to be orchestrated at a government level, which means staying active in not just voting but reaching out to your representatives and making sure they know what is important to you. But it's also important not to despair, not to simply throw our hands in the air and cry "But there is no ethical consumption under Capitalism" and go on with our lives. We do have at least a little agency in where we send our dollars, and its important to do what we can.

That's what I think anyway,