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Moral underpinnings of capitalism
–engineer’s point of wiew
by Hrvoje Pauković, univ. bacc. elect. eng.

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To capitalism or not to capitalism?
• Capitalism is the best type of economical and industrial
organization in the history of mankind
• It has significantly reduced poverty, famine, mortality, and
prolonged averaged life expectancy

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Moral and ethical underpinnings
•capitalism in its core idea is oriented to providing general social
wellbeing – positive in essence
•Tools:
1. by empowering human lust and need for self achievment
2. encouraging healthy competition
•Results:
1. Acumulation of wealth, potential of general social
prosperity
“If our own misery pinches us
very severely, we have no
leisure to attend to that of our
neighbor.” – Adam Smith

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Control or self regulation?
•If not controlled, liberal capitalism (through strong corporations
and monopolists) can devastate natural resources, exploit
workers and diminish prosperity in the population
•On the other hand if regulatory financial, moral and ethical
limitations are set on companies, there is substantial risk that
these measures could impede the growth of the economy and
counter affect the benefits of capitalism
How do we prevent capitalistic markets from
changing into their corrupt forms without
smothering economical growth?

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Hybrid capitalist systems
•Two opposing groups:
1. American liberal capitalist democracy
-no obligatory public healthcare system
-expensive education
-only the best survive “survival struggle”
-low government interference
-high charity (social pressure to help others)
-lower taxes
2. Scandinavian social capitalist democracy
-free education
-obligatory health insurance
-social help for unemployed and students
-higher taxes, high government interference
-high government subsitys

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Conclusion 1
•Capitalism is the best economical system in human history. By
moving risk of financial loss from the general population
(socialism) to the job leaders and workers (capitalism) society
has brought prosperity to itsels
•Although capitalism is positive in its essence it must be contoled
by the government to prevent human greed in twisting capitalist
market rules
•Government and its agencies must act as moral ambasodors
creating just distribution of the acumulated social welfare.
Aditionally every economical growth must be sustainable.

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Conclusion 2
•How strict the rules of controlling the market should be? How
much profit should be given to the less fortunate through taxes?
When does high social help diminish the will to work in people?
These are some questions no one can answer. Practice will show
the results.
•Potential regulation methods:
1. setting rules about how much corporate profit has to be
returned to research, scholarship
funding, education, worker benefits
2. keeping regulated monopolist trades such as
railways, drinking water and forest usage, electricity
distribution and transmission
3. setting sustainable growth regulations (resources
management, waste disposal, triple bottom line reporting)

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Finally
• Social-capitalist hybrid systems which exist in
Scandinavian countries (Denmark, Sweden, Norway) and
Germany are examples of well balanced, justfull and
prosperous capitalist democracies.
Practice and personal preferences decide which hybrid system is
better. I only ask you to think about this: if you are not very rich, in
which country is it better for you to get sick or easier for you to
send your children to top schools?