Moral Foundations of Capitalism – Margaret Thatcher’s explanation

Capitalism is based on morality.

It is not based on self-centered greed. Quite the opposite. It is based on serving others.

Capitalism rewards people who serve others and meet their needs. Only after meeting someone else’s needs does the provider get a reward.

In 1995, Margaret Thatcher, Former Prime Minister of Great Britain expounded on The Moral Foundations of Society.

A few of many topics she covered in that speech were the moral foundation of democracy, law, and the founding of the U.S.

Let’s see what she said about Capitalism.  Following quotes are reprinted by permission from Imprimis, a publication of Hillsdale College:

The Moral Foundations of Capitalism

Serve others and you get rewards:

It is important to understand that the moral foundations of a society do not extend only to its political system; they must extend to its economic system as well. America’s commitment to capitalism is unquestionably the best example of this principle. Capitalism is not, contrary to what those on the Left have tried to argue, an amoral system based on selfishness, greed, and exploitation. It is a moral system based on a Biblical ethic. There is no other comparable system that has raised the standard of living of millions of people, created vast new wealth and resources, or inspired so many beneficial innovations and technologies.

Want to lift massive amounts of people out of the dust of poverty? Set up a capitalist economy:

The wonderful thing about capitalism is that it does not discriminate against the poor, as has been so often charged; indeed, it is the only economic system that raises the poor out of poverty. Capitalism also allows nations that are not rich in natural resources to prosper. If resources were the key to wealth, the richest country in the world would be Russia, because it has abundant supplies of everything from oil, gas, platinum, gold, silver, aluminum, and copper to timber, water, wildlife, and fertile soil.

Why isn’t Russia the wealthiest country in the world? Why aren’t other resource-rich countries in the Third World at the top of the list? It is because their governments deny citizens the liberty to use their God-given talents. Man’s greatest resource is himself, but he must be free to use that resource.

I’ll expand that. 

• Why isn’t Congo one of the richest countries in the world?
• Why doesn’t Venezuela have a per capita GDP equal to or higher than the U.S.?

On to the fundamental biblical foundation of capitalism:

In his recent encyclical, Centesimus Annus, Pope John Paul II addressed this issue. He wrote that the collapse of communism is not merely to be considered as a “technical problem.” It is a consequence of the violation of human rights. He specifically referred to such human rights as the right to private initiative, to own property, and to act in the marketplace. Remember the “Parable of the Talents” in the New Testament? Christ exhorts us to be the best we can be by developing our skills and abilities, by succeeding in all our tasks and endeavors. What better description can there be of capitalism? In creating new products, new services, and new jobs, we create a vibrant community of work. And that community of work serves as the basis of peace and good will among all men.

One of several points of that parable is that we should use our abilities and skills. In the story, the rewards are in proportion to results. Punishment falls on the person who didn’t even try to make any money from the resources provided.

Hmmm. I’d never thought about that parable as an illustration of the fundamental morality of capitalism.

The Pope also acknowledged that capitalism encourages important virtues, like diligence, industriousness, prudence, reliability, fidelity, conscientiousness, and a tendency to save in order to invest in the future. It is not material goods but all of these great virtues, exhibited by individuals working together, that constitute what we call the “marketplace.”

Reprinted by permission from Imprimis, a publication of Hillsdale College.

Wish I could write that well.

We shall miss Lady Thatcher.