[Viewpoint]A crisis of capitalismThe seed of failure may grow amid the jubilation of success. The cause of prosperity could be the reason for collapse. You might succeed by being braver than others, but if courage turns into recklessness, you are bound to fail. A quality that once was considered a virtue could cause problems when it becomes excessive.
Witnessing the crash of the U.S. financial market, I thought that the same principles apply to the fate of a nation. The United States has always been synonymous with the free market. This freedom has always been the foundation of America’s prosperity. However, when a market spins out of control due to an excess of freedom, a financial crisis might be an inevitable result. Capitalism might be a system mankind has developed to maximize freedom, but with too much freedom, the system itself is shaken to its roots. It is not much different from how the value of equality gave birth to communism, but too much equality ended up being destructive. In the same context, historian Arnold Toynbee argued “civilizations die from suicide, not by murder.”
Richard Fuld, the CEO of the bankrupt investment bank Lehman Brothers, was paid $45 million last year. When he stepped down as CEO of Merrill Lynch, Stanley O’Neal received a compensation package of $161 million. In the case of Mr. Fuld, he made an average of $120,000 a day. Last year, the average payout to the CEOs of publicly traded companies in the United States was 344 times greater than the average salary of workers. No matter how great these CEOs might be, how can they in one day make as much as professionally trained workers make in a year? Is such a system ethical? The corporate executives remain extremely rich when the companies they run fail. Such a lack of morality is not regulated at all.
People wanted to live in homes that they could not afford, and banks issued subprime mortgage loans imprudently. People pursued higher interest and such speculative minds contributed to the crisis.
In order to control the crisis, the Fed is putting up an astronomical $700 billion. Of course, a short-term financial fix might prevent the breakdown of the financial system. However, as we can see from the aforementioned examples, the crisis is telling us that American capitalism is not healthy. And it is suffering from the illness of greed.
Everyone acknowledges that humans are creatures of desire. However, this desire has provided energy for human development and been a source of production. When the desire is controlled within healthy limits, the society becomes energized and prosperous. Desire that is controlled with reason and a sense of responsibility does not turn into greed. The problem is that the illness of greed is spreading rapidly among the elite in the United States. With notable exceptions, this group believes that money is everything. According to the Harvard Crimson, the daily newspaper of Harvard University, 39 percent of the graduating class of 2008 chose high-paying banking careers at consulting firms or investment banks. Some professors chide Ivy League schools saying they have become preserves of Wall Street.
America did not start off like this. The country was founded by Protestants who considered hard work a virtue. Farmers pioneered the West and accumulated wealth to create the foundation of the U.S. economy. The creative and adventurous American entrepreneurs opened a golden age in the 1950s. After prosperity was attained through diligence, utility and independence, people started to forget the virtues of the past. Now, people pursue easy money and comfort. Some criticize that the U.S. society only loves sweet desserts. Personally, I think that a crisis of capitalism caused the U.S. financial crisis.
Therefore, the lesson we need to learn from the U.S. financial crisis is spiritual. What determines the rise and fall of a society is not material. The material has to follow the spiritual. A society based on sound principles is bound to prosper.
Easy money will disappear, and you will not be able to pick fruit without breaking a sweat. Only the hardworking man can succeed. Honesty is your key asset, and you must keep your word. Be frugal and avoid waste. Be modest, not arrogant. Don’t be jealous of other people’s success.
These values transcend history and ideology. The universal experience and the rules of history teach us that these values will always prevail. However, the younger and smarter you are, the more you want to take the fast track. But the moment you laugh at principles and values, the end of the individual, the nation and the civilization begins.
*The writer is the vice publisher and chief editor of the editorial page of the JoongAng Ilbo.
by Moon Chang-keuk