Richard C. Cook: The Morality of Economics


Richard Moore

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The Morality of Economics: The Key Issue of the Twenty-First Century

By Richard C. Cook

Global Research, July 29, 2007

Since January 2007, Global Research and other forums have published a series of 
articles by this writer on the urgent need for economic and monetary reform.

Some readers have commented on how distant these monetary reform recommendations
are from current practice. The reason for this is simply that the 
recommendations derive from a starting point that is not customary.

This starting point is that human morality should be the essential factor in 
analyzing and making economic policy decisions. In other words, an economic 
system should reflect what is good and right, not just what those in power 
choose to dictate or the compromises that can be worked out by the balance of 
power in some political equation.

Economic decisions, as they are made presently within the United States and 
elsewhere, reflect the standpoint of a moral outlook that is critically 
defective. This is what must be changed, not just mechanics.

For the past quarter century, economic life, under the rubric of globalization, 
has increasingly been based on such overt or covert precepts as, ³survival of 
the fittest,² ³privatization,² ³might makes right,² ³money talks,² ³whoever has 
the gold rules,² and ³let the buyer beware.²

All are basically reflections of the profit motive vs. any ideal of charity, 
compassion, or service. Indeed, mention of such lofty motivations is even likely
to evoke sneers among self-anointed ³realists.² But the fact is that laws and 
practices have been increasingly marked by greed for gain by some at the expense
of everyone else, which is an indicator of a society-wide relapse into 

These trends have been abetted by the contention that economics is a science, 
somehow similar to physics, which describes the behavior of ³forces² that are 
essentially amoral.  The primary such force, perhaps, is the postulated 
existence of an impersonal ³market,² the functioning of which, even when 
appearing ruthless, supposedly results in the common good.

A recent example may be found in a statement by Secretary of the Treasury Henry 
M. Paulson to Fortune magazine predicting a global economic downturn. Paulson 
said, ³It¹s just that we¹re not going to defy economic gravity.² By placing his 
forecast on a par with the most relentless of all physical laws, Paulson lends 
an aura of inevitability to events which, if they occur, could be devastating to
billions of people.

By implication, Paulson also denies the possibility of any political choice 
about the likely event, even though it would be at least partially a result of 
the housing bubble, the biggest such financial travesty in history, which the 
Federal Reserve, along with the last several presidential administrations, have 
contributed to creating in the absence of any genuine economic driver for the 
U.S. economy.

But such ³forces² as policy-makers buy into are usually manmade. Further, more 
than people realize, the way a nation¹s economy functions is a reflection of its
moral choices and values. The ³market² behaves as it is designed to behave and 
distributes its benefits accordingly. The upside of this observation is that an 
economic system can be altered to reflect a higher moral vision.

A glaring instance was the 600-plus-point drop in the Dow-Jones the week of July
23. The ³causes² were the ongoing collapse of the housing market and the 
worldwide tightening of credit. Though many commentators have been predicting an
economic decline, few are willing to say that the credit crunch is by design and
represents a choice by the central banks, including the Federal Reserve, to 
favor the interests of creditors over debtors.

The most basic question to be addressed in analyzing the morality of economics 
is whether human beings have a right to life. Most people would say yes. Many 
would consider the answer so obvious that the question is unnecessary, even 
foolish. The basic principle of the Declaration of Independence is that human 
beings have an ³unalienable right² to ³life, liberty, and the pursuit of 

Yet the actions of governments and individuals give the lie to this idea. Even 
after a century of the horrors of world war, governments continue to embrace war
as an instrument of policy. This has applied particularly with regard to the 
United States, which has engaged in almost continuous warfare since 1941 and 
which today maintains military personnel or bases in over 130 countries.

Weapons of violence and warfare blanket the earth. Obviously many people believe
that human beings have a right to life unless some government that is armed to 
the teeth decides otherwise. The most recent glaring example has been the U.S. 
occupation of Iraq, which, based on whatever rationale, has resulted in the 
deaths of hundreds of thousands of civilian non-combatants. In this instance, 
the values of ³life, liberty, and the pursuit of happiness² have clearly been 
viewed as secondary to other, perhaps unstated, priorities. One such priority, 
without doubt, is control of oil.

This is only one example whereby the basic precepts of human welfare have taken 
a back seat to more urgent imperatives. Decisions are constantly being made by 
some people that have a life or death result for others, including the one to 
maintain or even raise interest rates in the face of the pending economic 

There was a time when individuals and families were much better equipped than at
present to live by means of their own labor, without regard to the economic 
decisions made by economists, financiers, military planners, or politicians. 
Tribal and agrarian societies, including much of the United States through at 
least the end of the nineteenth century, were based on technologies that allowed
people to survive at a subsistence level with minimal interference by outside 
experts or authorities.

The same was true of the agricultural and peasant classes of Europe until recent
times. Even during the so-called ³Dark Ages,² the masses of people were able to 
subsist off the land even as the warrior castes slaughtered each other.

All this changed through the mechanization of work brought about by the 
industrial revolution. Now more could be produced by fewer workers. The first of
many epoch-making innovations was the application of steam power to the 
operation of machines. Observers believed naively that mankind had now evolved 
to such a degree that the curse of labor had been lifted and that the human race
would now be free from merely having to earn a living and could devote itself to
higher pursuits.

But it turned out that the benefits of industrialization flowed mainly to those 
who controlled the processes of production. Those who did the work, or those 
whose work was no longer needed, were left out. The system which imposed this 
paradigm was capitalism. It was opposed by a variety of ideologies, including 
various types of socialism and trade unionism, which argued that the gains in 
productivity really should be viewed as the property of the community, not just 
a handful of those with economic and political power.

In recent years, capitalism has conquered most of the world, even in countries 
that still may consider themselves socialist, such as China. The brand of 
capitalism that has become the most powerful is finance capitalism, based 
ultimately on the lending of money at interest. Backing up this system is the 
greatest arsenal of weapons of mass destruction ever seen.

There was a time when such lending, particularly at excessive rates of interest,
was condemned as usury, but no more. Now it is even a matter of official policy 
that the central banks of the world may raise interest rates as high as they 
wish if they are able to make the claim that they are fighting inflation or 
making borrowers more responsible. The name for this policy is ³monetarism.² But
this justification of lending practices that many ethical authorities in history
have regarded as criminal is an excuse, not a reason.

As a result of capitalism, much of the world¹s population has increasingly been 
left out of the prosperity and material security that industrialization once 
seemed to promise. Around the world, the benefits clearly have accrued mainly to
the upper income echelons, while the majority of people are left to struggle. 
The results increasingly are un- or under-employment, poverty, lack of adequate 
nutrition or health care, or even, in many countries, starvation.

Within the United States alone, thirty-five million people are malnourished and 
almost a million are homeless, including some war veterans. No one could 
possibly argue that all of these people are personally at fault and that none 
are suffering because of the type of economy we have chosen to embrace. Yet for 
many, poverty and homelessness are a death sentence, whether through ill health,
exposure, or violence, because in economics, due process and equal protection of
the laws no longer seem to apply.

Faced with such situations, another ideology has sprung up based on the idea 
that there are not enough resources on the earth to support the human 
population, so that many must simply die‹with the exception, of course, of 
oneself, one¹s friends and family, one¹s co-religionists, or one¹s countrymen. 
Overly-pessimistic alarms about such phenomena as global warming also become 
part of the litany of doomsayers.

This latter-day Malthusianism is more prevalent than many are aware of. We are 
afflicted with a mind-set of scarcity in a Universe where there are so many 
signs of an infinity of abundance. It may be easier to comprehend a philosophy 
of abundance by realizing that the resources available to us may someday include
not only those of the earth but those of surrounding space and the solar system 
as well.

People are drawn into the illusion of scarcity without giving much thought as to
whether there might be better ways to distribute the prosperity of the modern 
technology-driven economy so that the world¹s population can be adequately 
maintained. But doing so must be a collective effort. What, then, does society 
have a moral obligation to provide to its members under today¹s conditions?

The most obvious is meaningful employment. Here United States policy makers have
failed drastically by pursuing policies which have led to the collapse of our 
industrial base and the export of so many of our jobs. But even beyond creation 
of a robust producing economy, three additional measures come to mind.

One is a guaranteed income for all. Each individual should be granted, as a 
basic human right, a sufficient amount of money to survive at a subsistence 
level. Such an income should be made as a recurring cash payment by every 
government, or on a worldwide basis by the U.N. Richer nations should provide 
poorer ones the means to do this if necessary. There is no reason except human 
ignorance why poverty worldwide could not be eliminated now through a basic 
income guarantee.

The second should be low-cost credit provided at the individual and consumer 
levels for grassroots economic development. Credit should be viewed as both a 
public utility and a human right and should be made available at minimal cost‹no
more than one percent interest payable to whatever public agency is charged with
administering the program. Banks have the privilege of creating credit ³out of 
nothing.² Governments, which grant banks this privilege, should have it also and
could and should exercise it to the benefit of their populations. Low-cost 
credit is essential for maintenance of dynamic local economies.

The third is a public infrastructure consisting of health, education, water, 
transportation, and waste disposal services that are provided without charge to 
all persons. Again, there is no reason except prejudice why governments should 
not be able to exercise the privilege of spending or lending money directly into
circulation for these purposes without recourse to either taxation or borrowing.
As America¹s greatest inventor, Thomas Edison, once observed, the government 
could as easily spend interest-free money into circulation for such purposes as 
sell bonds to banks then borrow the money back as an addition to the public 

An economic and monetary system that would provide these benefits is within 
reach, given the current state of development of technology and the world 
economy. Once the system is in place, society would have a firm basis on which a
robust and creative private sector could be supported, including meaningful jobs
available on demand. The first requirement for prosperity would have been met, 
which is a healthy, educated, and enterprising population.

In fact, more advanced economies could provide an additional cash dividend to 
their citizens in order to allow firms engaged in production to recover through 
their pricing sufficient earnings for investment in future growth and 
innovation. The term used by monetary reformers for such a stipend is a 
³National Dividend.²

These measures could be instituted regardless of the type of political system a 
nation chooses to embrace. They would not only sustain the entire population but
would also inject the purchasing power needed at the grassroots level to 
distribute what the global economy is able to produce. The number one unsolved 
economic problem the world faces today is that people lack purchasing power to 
buy what industry can create, so they must constantly go deeper into debt.

Such a program as described herein would go a long way toward satisfying the 
injunction contained in all the world¹s religions which is reflected in the 
Christian precept that we should strive to ³love our neighbor as ourselves.² 
This is what I believe should define the morality of economics. Our community 
life would then become a ³house built on rock,² rather than on the shifting 
sands of greed, profiteering, poverty, and debt.

We must realize that as long as a single person on earth is unfairly denied 
sustenance, we remain barbarians. Everywhere in the world people are waking up 
to the fact that the work of applying enlightened concepts of morality to 
economics is the key task which mankind faces in the twenty-first century. 
Unfortunately, as of this writing, there are signs that those in power are 
making plans for another wave of warfare and violence to hold the day of 
reckoning at bay. But they cannot do so forever.

Richard C. Cook is a retired federal analyst, whose career included service with
the U.S. Civil Service Commission, the Food and Drug Administration, the Carter 
White House, and NASA, followed by twenty-one years with the U.S. Treasury 
Department. His articles on monetary reform, economics, and space policy have 
appeared on Global Research, Economy in Crisis, Dissident Voice, Atlantic Free 
Press, and elsewhere. He is the author of ³Challenger Revealed: An Insider¹s 
Account of How the Reagan Administration Caused the Greatest Tragedy of the 
Space Age.² His website is at

Disclaimer: The views expressed in this article are the sole responsibility of 
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