Although banks are not exclusively to blame for the financial meltdown and subsequent recession, it has become popular practice in both media and government to ascribe all of today’s economic woes to supposed greed and irrationality on Wall Street. The chairman of the American Federal Reserve, Ben Bernanke was only the latest in a series of officials to call for greater supervision and regulation of the banking sector. Indeed, it has become one of the outspoken goals of the Obama Administration as well as recent G20 summits.
As rumors persist that the White House is to propose legislation that will impose a fee on international transactions, echoing a suggestion offered by the European Union last December, banks worry.
Goldman Sachs recently came under fire as it turned out bonuses to its employeed once again. How dared they, journalists and politicians cried alike, though the company had repaid the US Treasury’s $10 billion TARP investment in June of last year already — with 23 percent interest.
Nevertheless, Goldman Sachs is now considering to force its executives and top managers to give up part of their earnings each year — to charity. As The New York Times reports, the details of the charity initiative are still under discussion while the firm is “trying to understand whether such gestures would damp public anger over pay.”
Whatever one may think of demanding that employees donate part of their income possibly against their choice, the mere fact that Goldman Sachs is contemplating such a policy is telling of the economic climate in which it has to operate.
Things may be even worse across the Atlantic. In the United Kingdom, the Labour government is bashing the rich with an extra tax on bonuses while in France, President Nicolas Sarkozy explicitly distanced himself from what he called the “excesses of financial capitalism.” Although his government can’t seem to solve a 8.5 percent deficit on its budget, Sarkozy relishes in “the victory of the European model.”
Increasingly, in the popular press and in the words of lawmakers, it is not quite capitalism itself that is condemned. Rather its “excesses” are blamed for all of today’s trouble. Although capitalism brought immense prosperity to the West, it is “too much” of it that is stopping the rest from catching up. Although capitalism is the only socioeconomic system that guarantees individual rights to life and liberty (because it cannot properly exist without them), it is for the sake of “society” that it must be tempered. Capitalism is justified as a necessary evil. It is justified on altruistic and utilitarian grounds — because, it is grudgingly admitted, capitalism satisfies “the common good.”
Capitalism is a practical system. It does bring the greatest good to the greatest number of people. But that is of secondary concern. Primarily, capitalism is a moral system because it is only under capitalism that man can reap the rewards of his own labor. It is only under capitalism that man is free to choose his line of work, free to specialize in it, free to trade his products and services for those of others on a free market. It is only capitalism that ensures man’s unalienable rights to life, liberty and property and its ruling principle is: justice.
Twenty years after the Cold War ended, capitalism is in recession, to be compromised on at the first sign of trouble. Moreover, its greatest practitioners, the traders, the bankers, the industrialists, the businessmen have become a persecuted minority, carrying a burden of blame for a crisis that was beyond their control, subject to public scrutiny and special laws and penalized, not for their failures, but for their virtues; not for their incompetence, but for their ability; not for their errors, but for their accomplishments.
Businessmen have in part themselves to blame. Amid accusations of greed and selfishness, they appease, apologize and they compromise. They attempt to appease the loudest of their opponents who will never relinquish the struggle. They apologize for their very existence, denouncing “inhuman capitalism” as much as the most collectivist of commentators. And they compromise on capitalism, relying on lobbying, on private manipulation and on pull in order to extract momentary favors from government.
Businessmen have allowed themselves to be persecuted because they never stood up to defend capitalism. Rather they chose to undermine the system and let it take the fall for faults that were not its own. There are few capitalists today who ever bother to defend the philosophy they live by, if even they do so consciously. In their absence, capitalism can be vilified and destroyed almost soundlessly, at least until some remember the source of progress and prosperity again.