We are witnessing the consequences of the loss of values that were the substance of our culture, not the failure of capitalism.
Capitalism is an economic system that depends on the virtues of the people engaged in the system ... As with any system, capitalism is subject to human fallibility, or what Christians would refer to as fallen human nature.
Therefore, in order for a capitalist -- or free market -- economic system to function properly, the culture must place a high value on personal virtue and undergird it with reasonable laws and regulations that provide additional restraints and protections against inevitable human failings.
In a less progressive time, there were certain expectations within American society that were based on our commonly held ideas of what was right and wrong as derived from a Judeo-Christian worldview. In those times, there were social restraints that constrained individuals in what they did and said and how they conducted their public and private lives.
But the progressives saw these social restraints, especially religion, as shackles and thought it would improve society to free it from the old suffocating religious and moral constraints. As it turns out, liberation from the old morals has not brought us more freedom; it has brought more constraint and more uncertainty which has undermined trust in practically all of our nation's institutions.
What is missing today are the presuppositions, or accepted standards of morality and ethics, that are valued individually and in our communities and that establish a solid foundation for functioning in our society. Laws are not enough.
As we are witnessing with the current crisis in our financial institutions, the threat of punishment is often not enough to stop wrongdoing. All too often, punishment consists only of fines that can be viewed as just another cost of doing business. Unfortunately, many decisions are based on a "risk vs. reward" formula that is based solely on self-interests, with little regard for others.
In many respects, the breakdown of many of our financial institutions clearly reveals the consequences of rejecting what were once commonly held traditional values. As the "old" traditional values and virtues have been pushed out, they have been replaced with politically correct secular values.
Consequently, living in a society that has rejected traditional values means that we live in a constant state of uncertainty -- leaving the government to try to impose honesty and integrity through increasingly more stringent laws and regulations.
The predictable result of the abandonment of traditional values, particularly by the boomer generation, is a public and private sector increasingly marked by lies, deception, fraud and malfeasance.
... we are now spending millions of dollars trying to instill ethics in current and future leaders whose entire education, from kindergarten through college, has been based on the moral relativism that taught them there are no absolute truths, there are no eternal standards. ...
In that regard, our culture has been stripped of the absolute values that are essential to a healthy free market economy, a trustworthy government and a healthy society.
With so many of our nation's leaders in both the public and private sector disconnected from absolute truths, it should not surprise anyone that our economic and governing systems are floundering and that our laws have done little to prevent it.
As I pointed out earlier, those who claim capitalism has failed are mistaken. What we are witnessing is not the failure of capitalism, but the consequences of moral relativism.
UPDATE ~ Morning of August 5, 2008 - I've been thinking of Gary's latest effort all morning. I was reflecting back on a prior post I titled Mobile Press-Register~ Just let the lawyers decide where the P-R wrote an Editorial accepting the U.S. Chamber of Commerce and their Institute for Legal Reform's flawed study to suggest we need to listen more to corporate counsel in formulating public policy. The Failure of Corporate Law: Fundamental Flaws and Progressive Possibilities by Kent Greenfield was also noted in that post. The book's description, and I'll close here, at least for now, contained the following:
Anyone can purchase shares of stock, but public corporations themselves are uninhibited by a sense of societal obligation or strict public oversight. In fact, managers of most large firms are prohibited by law from taking into account the interests of the public in decision making, if doing so hurts shareholders. But this has not always been the case, as until the beginning of the twentieth century, public corporations were deemed to have important civic responsibilities.