I have been discussing the morality of Capitalism with a fellow philosopher for some time now, and in particular, “profit” has emerged as an important issue. In this discussion, I allege that profit is related to “wealth.” That is, I think that merely receiving more compensation for a product or service than one actually put directly into that product or service is not itself “profit.” There is a “thickness” to the issue of “cost” and the whole structure of “cost” must be taken into account.
An example that has come up in this discussion is a small farmer who takes in more than the actual cost of seeds, etc. My point is that the farmer needs to stay in business and, consequently, he needs to put something aside for poor years, provide for his family, and make periodic repairs and upgrades in order to continue in competition. All of these contribute to the “thickness” of cost. In this sense, the Capitalist needs to sustain his livelihood. If we call this excess compensation “profit,” we need to realize that there is nothing immoral about it.
It seems to me that where the Capitalist strays away from the moral high ground is where excess compensation is used to accumulate wealth. But why is wealth accumulation a moral issue? The biggest problem here is that the Capitalist is probably paying the lowest wages and prices for labor and raw materials so as to create wealth for himself. If wealth is to be created, the morally right thing to do is to share the margin of wealth with all of those who are involved in the productive chain. This goal is possible in relatively small operations where people and sources are known and in a relationship with the Capitalist.
In the big corporations, today, enormous wealth is created and it is quickly swallowed up by executives, who are paid ridiculously huge salaries and other benefits, and by stock holders, under the prevailing myth that the corporation’s only moral obligation is to reward their stock holders. The more desperate ordinary people become, the easier it is for corporations to leverage lower salaries. So the distribution of wealth becomes extreme. With extreme wealth comes political and military power — the formula on which the United States proceeds today.
