Managing Leadership^®

There appears to be a lot of excoriating of liberal free-market capitalism going on lately. And not just on a macro-level. The presumption that the supposedly inherent evils of this philosophy have been exposed by the current financial crisis is being reflected at various levels and in sundry spheres of society – and even in our workplaces.

Some observers are beginning to propose that we organize everything from our communities and economies to our organizations based on an individual altruism which we are to devote to an ill-defined collective interest. This is a peculiar – and, really, an absolutely chilling – idea, and it is a much larger subject than we can adequately address here.

But there is one element of it that bears commenting on: the notion that capitalism is evil or corrupting, and that individual submission to service of a greater good is inherently virtuous or inevitably elevating.

Capitalism is not about greed – it is about self-interest. It neither begets evil nor corrupts virtue. It permits the freest possible rein to the hopes and ambitions of individuals – some of whom are evil, many of whom are virtuous, and most of whom struggle mightily and daily to come to an understanding of what all of that means.

What capitalism does do is provide a mechanism enabling us to engage in that struggle, and to test the vigor of our hypotheses against those of others in free markets. What it does not do is allow us to abrogate responsibility for confronting the consequences of how we conduct that struggle.

Moreover, it offers us in those free markets a broad, deep, and ever renewing and reflective reservoir of feedback to help us determine our course. Failure in these markets is as important as success, enriching our judgment with its own, and even encouraging innovation.

The great virtue of capitalism is in its moral neutrality and its objective integrity. It does not ask us – it does not allow us – to sacrifice our interests or our judgment to those of others – certainly not to that of a putatively higher purpose to which we are accorded no input and offered little explanation.

Thus, it forces us to be – to learn – who we are. It is the avoidance of this that is corrupting, both of individuals and of society.

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Today’s tip: Speaking of polarizing ideas, did you know that these tend to come not from isolated crackpots, but from normal individuals driven to crackpotdom by groups? Please see this fascinating piece on the topic from PsyBlog.

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