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Underground > Switchboard >

Ethics, Money & Corporate Power. Can they co-exist?

  
  

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Digital Hermes
21:02 / 15.03.08
Lately I've been spending a lot of time considering ways to improve my financial situation. I've read books and paid attention to areas of the newspaper that I used to skip past on my way to the entertainment section or the funnies. And I often notice the tendency in the advertisements and literature from the financial sector to reinforce ideals that are ultimately destructive, at least environmentally or socially.

Is it possible for someone or something (a company) to operate in a world of high-finance and big business, yet remain free from taint? I'm having a hard time thinking of anyone or anything that currently does so.

(I am wondering if Richard Branson of Virgin might qualify, but I don't know very much about him.)

It does seem as though the psychological model of business is inherently anti-ethical and greedy, but (to steal a bit from the Temple) if a corporation is essentially an entity, with it's workers as cells, then are these behaviours the behaviours of children, and is it then possible for these squalling infant megacorps to begin to grow up, and see themselves as members of a group?
 
 
Anna de Logardiere
14:27 / 18.03.08
The answer to this is simple, if you're paying extra for sustainable packaging, extra for ethical modes of production, a living wage to all of your workers, growing organic goods and only selling in a very limited area (because transport=carbon) how are you going to make a profit? If you do make a reasonable profit you're probably selling your product to a highly restricted market of people who have money, which some might regard as unethical. Most businesses will make ethical sacrifices and not necessarily because of some ideological inferiority wrt ethics, more because they want to make a little bit of money. Most of the ethical businesses I can think of shirk on a couple of the points above, which does call into question all of the other little things that don't immediately come to mind (recycled paper and envelopes in the office?)
 
 
Sjaak at the Shoe Shop
09:12 / 19.03.08
Well I doubt if it is that simple. First of all, what is ethical? There you go..
Also, if you do some investigation into business ethics, it becomes rapidly clear that that is also not a straightforward topic. For example, if a company's objective is making high profits, then doing charity could be extremely unethical.
I think it may be a better idea to investigate what a company's vision and values are, as this should be the basis for their behavior and attitude.
 
 
ONLY NICE THINGS
10:22 / 19.03.08
A publicly listed company is generally obliged to maximise the earnings per share of the company, and thus the yield in capital growht and dividends of its shareholders within the law. This is all really basic stuff. Therefore, a PLC is expected to operate to the tolerances of the law to generate shareholder value. Unless there is a compelling business case for ethical practice, therefore, or unless the law of the land in which they are operating compels ethical practice, it is not legal for companies to adopt ethical business practices with significant cost implications on what in shareholder terms is a whim.

So, short answer: no. Slightly longer answer: not without compulsion by an external power - a national law, an international agreement or a private owner.
 
 
Anna de Logardiere
11:52 / 19.03.08
First of all, what is ethical? There you go..

Digital Hermes defined what he regarded as ethical in the initial post, I often notice the tendency in the advertisements and literature from the financial sector to reinforce ideals that are ultimately destructive, at least environmentally or socially. From this it is possible to conclude that he thinks ethical companies are not destructive, which is a passable definition for a conversation here.
 
 
spiel
09:12 / 24.03.08
I just want to say that in general I agree with the previous posters in the sense that you can't expect saintly behavior from large companies. But I think that it's at least possible, if not currently in practice, to get a reasonable degree of ethical behavior from organizations.

I think that the extent that a company may be considered ethical is related to whether you judge it within it's domain and target demographic (usually mainstream segments of western cultures) versus broader and more stringent philosophies. Unethical behavior is also limited by what a company thinks it can hide from it's target demographic(s). Many Americans still believe that environmental concerns are hippie nonsense, for example, so many companies don't constrain themselves by environmental concerns, unless there are obvious economic advantages. As mainstream beliefs change, organizations will slowly respond, and be towed along.

Unfortunately, current marketing theory is much more concerned with perception than behavior, which doesn't encourage corporations to behave well. The general belief is that for results, the public's perception has to be spun, rather than altering organizational behavior.

Regardless, there are limits to corporate behavior that are certainly a matter of ethics. As you stated in your post, corporations are made of people, and the people within will determine the limits of it's behavior. Though there is a diffusion of responsibility in any large group, few companies are run by sociopaths.

On a personal note, I think that it's overly simplistic to limit the discussion to profits and shareholders. Some (maybe most) corporations are internally run as something very close to a feudal system, with different players vying for power. As people gain influence, they often push personal beliefs and agendas. If somebody with favor campaigns to increase recycling, than it will probably happen, and possibly be effective. Of course, some other person may come along later and reverse that agenda. Getting these types of changes permanently institutionalized can be very difficult.

One other personal, and purely anecdotal note: having worked for a variety of organizations from non-profits to mega-corporations, I've been treated the best by the biggest corporation and the worst by an academic non-profit research org. The academic org had less respect for it's employees, and much more overt sexism (despite a large percentage of female staff) than I've seen in any of the corporations. I'm not saying that this is necessarily typical, but it demonstrates that organizations can be simultaneously ethical and unethical, and that there are different domains of ethics to consider.
 
 
Anna de Logardiere
10:24 / 24.03.08
There you are sweetums, the answer is no, they can't co-exist.
 
 
Fist Fun
11:08 / 24.03.08
They have to act ethically in so far as obeying the law. A public company has to have open books and be audited so it is under public scrutiny as well.

Eating organic food, recycling paper, etc, as someone mentioned, is one definition of ethical but that isn't something that everyone believes in or is automatically a good thing.

I suppose a bigger problem is most large companies are transnational so that they can choose which law they want to operate under.

I'd definitely say it is inherently greedy though but as long as there is a working set of laws which control that greed the it isn't necesarily a bad thing.

You couldn't or shouldn't have it any other way. Companies should battle it out creating wealth and elected bodies should impartially ensure policy and law is in place to roughly ensure that it works positively for everyone.

Companie always remind me of kingdoms from the olden days. The king is the CEO with various barons and people in privileged office running branches. They fight battles which they win and lose. They demand loyalty.
 
 
ONLY NICE THINGS
11:15 / 24.03.08
You couldn't or shouldn't have it any other way. Companies should battle it out creating wealth and elected bodies should impartially ensure policy and law is in place to roughly ensure that it works positively for everyone.


Well - we already have it another way than that, so I'm not sure what that position is - is it a manifesto for Utopian Capitalism?
 
 
Anna de Logardiere
11:57 / 24.03.08
is one definition of ethical but that isn't something that everyone believes in or is automatically a good thing.

Yes, some people believe that landfills are ethical.
 
 
Fist Fun
14:20 / 24.03.08
"we already have it another way than that"

True. How would you describe the way it is just now?
 
 
Tsuga
01:27 / 25.03.08
I'd definitely say it is inherently greedy though but as long as there is a working set of laws which control that greed the it isn't necesarily a bad thing.

You couldn't or shouldn't have it any other way.

Why do you say that? Because you feel it's not necessarily a bad thing, does that necessarily mean that it is the best or only way?
Capitalism is just a functional system based on an abstraction of survival of the fittest; you may think it's great if you're a tiger, but if you're Bambi watching your intestines being pulled out and chewed on, it's a different story. While it cleaves to some natural law, couldn't we possibly do better? Survival of the fittest isn't really about ethics, it's a little outside of that realm. What you're talking about, Buk (to drag this out), isn't really ethics, so much as tiger-taming.
 
 
Fist Fun
11:58 / 25.03.08
I think capitalism is great and it is a realistic way of creating massive prosperity and ending all global poverty.

Maybe there are other ways to do that but I think the weakness of human nature would mess up most other ways.

I think it is normal and good that companies battling it out to create wealth are greedy. It is just as important that you have other to control that and balance that. That would be governing bodies to make law and policy to ensure that the common good is met and charity, public bodies, non-profits, cultural organisations to do things which are outside of chasing profit.

The big gap is that corporations are transnational and governance tends to be national. Hard gap to bridge democratically.
 
 
ONLY NICE THINGS
15:04 / 25.03.08
I'm working on a longer response to this, but this is such a pearler I had to ask:

I think capitalism is great and it is a realistic way of creating massive prosperity and ending all global poverty.

How, exactly? I mean, how does it go about that? What's the realistic path?
 
 
Fist Fun
15:16 / 25.03.08
By allowing people to build wealth by trading with each other. Recent growth in India and China being prime examples.
 
 
Evil Scientist
15:36 / 25.03.08
Although there is still massive poverty in China, and capitalism doesn't seem to be influencing the Chinese government's terrible human rights record.
 
 
ONLY NICE THINGS
15:39 / 25.03.08
But that doesn't end all global poverty, does it? As a case in point: by creating a set of consumers in India and China who want, for example, to consume beef sandwiches, wealth generation leads to massive pressure being put on farming resources. Beef is a process product - it can be sold for more than the potential value of the resources put into raising the cow that generates it. However, a cow also produces less actual usable food than the same amount of grain. This is not the concern of the companies producing, buying or processing and exporting beef, and the governments in the countries where the beef is being grown can be induced to cooperate with the companies through differences in the exchange value of their currency and reserves and the cash realisable by the companies. However, this leads to shortages in food, damage to the soil, disruption of the farming culture and so on in that country. What's the solution to that? Logically, generate wealth so that everyoone in that country can be rich, and then buy their own beef sandwiches. But from where do they do that? Where is the wealth built, and where is it allocated? As ES says, some very rich people in, say, Nigeria may increase the average wealth of a statistical Nigerian, but it need not do much for an actual Nigerian, especially if the government that should be representing him or her is compelled by their own circumstances to conspire with rather than to put a brake on the practices of their corporate patrons.
 
 
Fist Fun
16:04 / 25.03.08
I think it is clear and obvious that capitalism in China and India has generated wealth and improved the lives of billions. Yes there are still multitudes of problems and it is a long and messy process. Things are genuinely better though. Lives have been improved through allowing business to operate.

This is something that can, and hopefully will, continue to spread around the world. It is happening. There is a realistic chance of banishing poverty because trade creates wealth.

For the beef issue I totally agree that beef companies should not have complete free reign to maximise their profits no matter the cost to the public and the environment. Their should be political and legal controls to protect people and the environment.
 
 
ONLY NICE THINGS
16:24 / 25.03.08
Right, but:

This is not the concern of the companies producing, buying or processing and exporting beef, and the governments in the countries where the beef is being grown can be induced to cooperate with the companies through differences in the exchange value of their currency and reserves and the cash realisable by the companies.

Your model seems to be a bit like a traditional marriage, where business brings a load of money home, gives some of it to his wife, society, as housekeeping and goes back to wealth generation, leaving her to allocate her stipend to good works, cleaning and culturally improving activities. However, that neglects to take into account that business, in order to maximise profit, has both the ability and the compulsion to exert pressure on society and government. This is quite apparent in the US, where often large companies which provide many constituents with jobs can induce congressmen and senators to serve their mutual interest by securing federal funding - handouts, in effect, from the housekeeping kitty - for their own ends.

Another interesting element here, of course, is how one defines a better life. Would everybody in China and India having their own car and taking two or three international flights a year be a good thing? Certainly, except insofar as with our current technology it would mean the end of the world in fairly short order. China's quite interesting on this one because although it is theoretically not a capitalist state, but one in which capitalism has been introduced to create dynamism in a socialist system - rather like the Sovkhoz system, I think. As such, it is theoretically able to impose with impunity swingeing regulations of a kind that an American congressman, fearful of the loss of power and prestige that the closure of a polluting car plant would represent in status and votes, could not.
 
 
Evil Scientist
17:03 / 25.03.08
I think it is clear and obvious that capitalism in China and India has generated wealth and improved the lives of billions.

This being Switchboard it might help if you give some evidence at this point which supports your suggestion that it has improved the live of billions though. Because I don't think it's really as obvious as you suggest.

In theory corporate investment could help to regenerate poverty-stricken areas. Although it seems more often to be the case that companies like Anglo-Platinum (for instance) can merrily despoil the environment around their South African platinum mines and (allegedly) cut off power and water supplies to local farmers in an attempt to drive them out.

From Wikipedia:

In August 2007 British charity War on Want published a report accusing Anglo American of profiting from the abuse of people in the developing countries in which the company operates. According to the charity, "in the Philippines and South Africa, local communities threatened with Anglo American mines have faced severe repression in their fight to stay on their land, while in Ghana and Mali, local communities see little of the huge profits being made by AngloGold Ashanti but suffer from fear and intimidation and from the damaging impact of its mines on their environment, health and livelihoods".

Cherry picking an example perhaps. But generally corporations only seem to actually try and help the little people when they're forced by local laws to do so.
 
 
ONLY NICE THINGS
17:38 / 25.03.08
Indeed, but it's important to remember that local laws are not things that hold businesses in whatever shape they are built to, like a bowl. Often, they are more like a riverbed, which is changed in shape by the flow of money. An obvious example is the clash between the Ogoni people and Shell in Nigeria, where having a big oil company giving the army money might just give the army the idea, independently of the big oil company, that it might be a good idea to pick up and deal with some of the people who were being such a pain to the big oil company, even to the point of ignoring the oil company's pleas for clemency, because this is, in one's understandiing, how the game is played.

On the other hand, improved medical care, lower infant mortality - this is all good stuff. However, I'm not totally convinced that capitalism is the best or the only way to achieve these goals...
 
 
Fist Fun
18:35 / 25.03.08
Well I know as much as the average person about the Chinese economy but a quick look at wikipedia turns up the following

"How many Chinese have been lifted out of absolute poverty since 1981?
From 1981 to 2001, 422 million Chinese people moved out of absolute poverty.
(Columbia University)"

So I think the economy has grown a lot since 2001 so a lot of people have been lifted out of poverty by capitalist reform in China.

"Cherry picking an example perhaps. But generally corporations only seem to actually try and help the little people when they're forced by local laws to do so."

I'd agree with that. I think business is inherently greedy and will not necessarily act in an ethical way. They are excellent at generating wealth though. So they should be allowed to do that while laws and institutions ensure that they act for the common good.

I certainly take the point that business, being greedy and not necessarily ethical, will try to exert undue influence on those bodies. In which case I would hope that a free press and laws against corruption mitigate that so the effect isn't too bad.

Does anyone want to expand on some good alternatives? Are there alernatives?
 
 
Pingle!Pop
21:33 / 25.03.08
On the other hand, improved medical care, lower infant mortality - this is all good stuff. However, I'm not totally convinced that capitalism is the best or the only way to achieve these goals...

Or, y'know, that there aren't a billion examples where it has produced precisely the opposite result.
 
 
ONLY NICE THINGS
06:28 / 26.03.08
OK, so start there. Buk thinks that business-based capitalism creates wealth, and that this wealth is channeled to those who need it, either by direct means (wages, presumably) or indirect means (higher taxes as a result of higher wealth) and that this is an undeniable good. Where are the faults in this belief?
 
 
Pingle!Pop
07:23 / 26.03.08
Well, to start with your infant mortality rates, there's the uncontested facts that:

a) The richest country in the world, which has in place a more capitalist health system (as well as being more capitalist generally) than any other rich industrialised nation, also has an infant mortality rate rivalling that of various third world countries.
b) The conversion of former Communist countries in Eastern Europe to a capitalist economic model caused infant mortality rates to soar.

I can find figures for those if necessary, but they're pretty widely known, as are plenty of other cases of capitalism leading to adverse affects on public health, education etc.

More generally, there's an utter lack of concrete evidence that capitalism does actually generate wealth/prosperity at all. The IMF's structural adjustment programs for example (which aren't exactly synonymous with capitalism, but are primarily based on the liberalisation of trade) on average lead to countries adopting them experiencing about 1.6% less economic growth (I might have more difficulty finding a source for this figure, as I've nabbed it from a university lecture) than they otherwise would have been expected to.
 
 
Fist Fun
08:56 / 26.03.08
"a) The richest country in the world, which has in place a more capitalist health system (as well as being more capitalist generally) than any other rich industrialised nation, also has an infant mortality rate rivalling that of various third world countries.
b) The conversion of former Communist countries in Eastern Europe to a capitalist economic model caused infant mortality rates to soar."

Those are some really sad statistics. I think if you take the world as a whole problems related to extreme poverty are hugely lower in wealthier countries though.

I would guess that those specific examples are due to a failure of manage the health system well in the US and the chaotic nature of massive social change in Eastern Europe.

Does capitalism generate wealth? To be honest I just kind of assumed it does. All the rich countries are capitalist, when people trade with each other they get richer. I've never read the Wealth of Nations by Adam Smith but the famous pin factory explanation seems about right to me. People specialise, trade with each other and everyone is better off. Inhibit trade and you get poorer.

That wealth alone isn't enough because the corporate entities who produce it are greedy and not necesarily ethical. You need agencies outside of that to ensure the common good.

"The IMF's structural adjustment programs for example (which aren't exactly synonymous with capitalism, but are primarily based on the liberalisation of trade) on average lead to countries adopting them experiencing about 1.6% less economic growth"

I would say that is more to do with the fact that it is massively, massively difficult to introduce reform in to poor and economically failing countries than a proof that capitalism and trade doesn't create wealth. I would hope that the world can keep trying because the solution to poverty is wealth generation.
 
 
ONLY NICE THINGS
08:58 / 26.03.08
The idea of the creation of wealth does cause problems for me, because, not being an economist, I don't really understand where that wealth comes from. I mean, you can't create matter, you can only change its state, sort of thing, so my simple, primal instincts react to a model in which everyone keeps doing better and better until everyone is rich with a degree of suspicion.

The infant mortality issue is an interesting one, also. The US has an unusually ghastly record on this, of course, but it does raise the question of what "business" is actually good at. Buk's model has business generating wealth, under the control of a free press and firm anti-corruption laws (which is tricky in itself, since places like Nigeria and China may have neither of these, or may not have the power to enforce them without the active participation of the businesses, which Shell, for example, was apparently not able to offer), and presumably governments using some of that wealth on social projects - it's a kind of Edwardian marriage model, where the husband (business) brings home the bacon and gives some of it as housekeeping to governmentto spend on feeding the kids, keeping the place tidy, supporting good causes and so on.

This gets tricky because what governments and businesses do tend to overlap. The Federal Reserve is a bank, effectively, but one staffed entirely by employees of a particular government. On the other hand, the British rail network was run by private companies for some time, then nationalised, then privatised, then effectively renationalised when it turned out that business was not competent to run it efficiently - this may tie in with greed: if you make it possible for business to demand money from government with the threat of not being able to provide a vital service effectively underlying the demand, it will always demand that money. Also, simplifying matters somewhat, if you can make $200 million doing something for which you will receive fines of $150 million, it is good business. If the fine is raised to $220 million, it is good business to threaten to leave that country, causing unemployment and a loss of tax yields, because its regulatory regime is uncompetitive and hostile to business.

So, what's the solution? One world government?
 
 
ONLY NICE THINGS
09:06 / 26.03.08
All the rich countries are capitalist, when people trade with each other they get richer.

FSVO richer, arguably, though. The people whose habitats have been devastated by ranching or oil exploration are manifestly not richer, and the business that has displaced them usually has little or no responsibility for their welfare.

There's also a question about what you mean by a capitalist country, and indeed a rich country. The US is a capitalist country, as in one in which businesses are given a degree of freedom to offer money in exchange for the labour of its citizens. However, there are regulations on the money that is offered, and the conditions under which the labour can be purchased. In those terms, the poorer a country is the more successfully capitalist it is likely to be - and, of course, the less likely a company will be to break the law (by, for example, employing unregistered but deniable foreign labour through proxies who do not receive the legal minimum wage), since its aim is not to generate wealth in general, but to generate and retain the maximum possible wealth for its owners.
 
 
Pingle!Pop
10:08 / 26.03.08
Does capitalism generate wealth? To be honest I just kind of assumed it does.

I'm not sure that assuming is a great place to start from, though. You may say that is more to do with the fact that it is massively, massively difficult to introduce reform in to poor and economically failing countries if you wish, but the figure simply relates to the effects of liberalisation: those who adopt the measures pushed by the IMF experience less growth than if they hadn't. It's not about failing countries, it's about the concrete effects of trade liberalisation.

I'd argue against capitalism even if it were better at increasing overall wealth than any other system, but the simple fact is that there is absolutely no evidence whatsoever that it is.

What there is evidence for is that capitalism increases the gap between the rich and the poor, and that it has an adverse effect on public health and education. I actually find it quite shocking that you can state that the US' infant mortality rates are due simply to a poorly run system (and one, I might note, which spends more on healthcare per capita than any other country on earth), when it's so self-evident that it's a result of a highly capitalist healthcare system. I've read countless accounts of people having to make a decision as to whether or not to get potentially lifesaving medical care, because the profit-driven system means they can't afford it. Or that they can't make that decision at all, because a profit-driven system is never going to insure someone if it's too likely something will happen to them.

Again and again, putting things in the hands of private companies messes things up. In Bolivia, the privatisation of water provision led to people being unable to afford safe drinking water, and dying. In Tanzania, the introduction of a "market-based" system to the AIDS crisis there meant that people went to hospital less than half as much, and died. In the Dominican Republic, the government was forced to accept the intellectual property rights of drug companies, with the effect that the price of AIDS drugs quadrupled, and people couldn't afford them and died. These are all particularly shocking individual examples, but all research into the effects of trade liberalisation on public health shows that it is detrimental.

So, that leaves the advocate of capitalism with "China and India have seen huge growth". Which, as Haus says, is kinda problematic, because what constitutes capitalism here? China to a large extent retains a planned economy, most of its enterprises are "owned" by the state, and they've pursued protectionist policies and not really introduced trade liberalisation. All that's pretty antithetical to "free market" advocates.
 
 
Fist Fun
10:58 / 26.03.08
"The idea of the creation of wealth does cause problems for me, because, not being an economist, I don't really understand where that wealth comes from. I mean, you can't create matter, you can only change its state, sort of thing, so my simple, primal instincts react to a model in which everyone keeps doing better and better until everyone is rich with a degree of suspicion."

I suppose wealth through trade is freedom, opportunity, efficiency and plenty. So you are good at growing potatoes and I am good at growing carrots. If we never meet each other and we can't trade with each other our lives our poorer. Either because we only eat potatoes or carrots. Or because we try our best to produce both potatoes and carrots but not very well.

But if we get over the barriers to meeting each other and we trade then everyone is better off. We specialise at what we are good at and then trade so everyone has plentiful supplies of potatoes and carrots and more free time.

Then if you bring someone else in to the mix with their abilities and skills then it gets even better and so on and so on. This is my childlike interpretation of free trade.

A recent example would be the new Eastern European countries in the EU. An artificial barrier to trade has been removed allowing people to move from areas of high unemployment, low wages and labour surplus to areas of low unemployment, high wages and labour scarcity. Problems come along with this change, due to the nature of change, but the general lot has been improved.

"So, what's the solution? One world government?"

I'd go for some bare minimum global institutions to enable diplomacy and then let nation states, and groupings of nation states, deal with the rest to their own liking.

I'd hope that the vast majority of states would have a good government and they could work things out between themselves to enjoy the benefits of business and trade while curbing the excess.

Things would fall down from time to time and diplomacy would be vital.
 
 
ONLY NICE THINGS
11:13 / 26.03.08
Worth noting also, probably, that free trade, when not imposed by the IBF, is not usually free. China and the US both protect their industries, either directly (for example the vetoing of the sale of a Port Authority to a Dubai-owned company) or indirectly, through the imposition of tarrifs on incoming goods that makes them uncompetitive with home-grown goods, notably on steel. One problem with the forcible opening of trade is that governments lose this ability to regulate their economies and societies against the free movement of capital in exchange for goods and services - again, I am not an economist, but I assume they do so because there are consequences for them in which the generation of wealth by businesses does not in fact benefit them.
 
 
Fist Fun
11:23 / 26.03.08
"So, that leaves the advocate of capitalism with "China and India have seen huge growth"."

All I'm saying is that trade increases wealth and the best way to stop poverty, and all the problems stemming from it, is to increase wealth.

I agree that there are lots of abuses and horrible things around that but that would happen within any change. It is just the nature of existence.
 
 
Pingle!Pop
11:44 / 26.03.08
That's a convenient way of excusing some of the inconceivably horrible things that have happened as a direct result of moving to more capitalist economic models in various countries, but it doesn't address the point I was actually making, which is that there's no evidence whatsoever that capitalism --> wealth. Whereas there's some evidence that it does the precise opposite - slowing down economic growth - and bucketfuls of evidence that it has various exceedingly nasty consequences.
 
 
All Acting Regiment
12:00 / 26.03.08
the best way to stop poverty, and all the problems stemming from it, is to increase wealth

Well, not really. Your formula says nothing about distribution. If we took a poor country, and made 1% of the people 100 times more wealthy, that wouldn't do anything about the poverty in the other 99%, would it? Wealth is certainly the neccesary starting point (by definition), but to get to the solution we need to alter the structure of the wealth as well.
 
 
Fist Fun
12:25 / 26.03.08
"there's no evidence whatsoever that capitalism --> wealth"

The capitalist nations are rich. Capitalist reforms in India and China have hugely increased wealth and lifted hundreds of millions out of poverty.

I agree with this from Wikipedia

"Many theorists and policymakers in predominantly capitalist nations have emphasized capitalism's ability to promote economic growth, as measured by Gross Domestic Product (GDP), capacity utilization or standard of living. This argument was central, for example, to Adam Smith's advocacy of letting a free market control production and price, and allocate resources. Many theorists have noted that this increase in global GDP over time coincides with the emergence of the modern world capitalist system.[45][46] While the measurements are not identical, proponents argue that increasing GDP (per capita) is empirically shown to bring about improved standards of living, such as better availability of food, housing, clothing, and health care"
 
  

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