Ms. Shamsa Belgrave is a sophomore at Swarthmore College with a growing awareness that America’s current form of capitalism is damaging to so many because we’ve collectively allowed it to be overcome by damaging ethics. She’s exploring the potential that America’s form of capitalism can be reformed if not transformed to a more equitable system by returning to the original ethics of Adam Smith. Here, we are honored to offer her this platform to share her observation with the example of fast fashion.
In exploring methods of improving capitalism, I feel it’s crucial to emphasize social responsibility as much as we do self-interest. ‘Self-interest” and “Social Responsibility” seemingly combat each other; however, Adam Smith originally intended for these two ideas to be in balance so that working for our self-interest would not come at the expense of others.
In today's modern capitalist society, it’s evident that we’re far from Smiths’ idea of what capitalism should look like in so many organizations of all kinds completely exclude morality for their own personal gain. How can we fix this and what would a capitalist society look like with a conscious effort to do good?
Image credit: Ardent Mills
Social responsibility is an extremely broad term which encompasses environmental issues, workers rights, and ethical practices. In short, social responsibility is the idea that we all are responsible to act and think in ways that benefit society. Adam Smith would agree to an extent. He believed that individuals work in their own self-interest, however, he believed that social responsibility (morality, empathy, something of the sort) is something that doesn’t need to be regulated or controlled. Rather, it’s built into humans to have empathy and maintain the balance of individual gain and the wellbeing of others.
Seemingly, this could not be farther from the truth of the world we live in today.
Take the example of the fast fashion industry. It's a multi-billion dollar industry that produces trending styles at affordable prices and it continues to grow rapidly. If you’ve heard anything of fast fashion, you know that the industry alone has done more damage than good over its years of activity.
For one, they exploit their workers by paying them far less than a living wage whilst making them work in harsh conditions. Furthermore, they produce products that pollute our environment and release around 1.2 billion tons of carbon dioxide every year. This isn’t an issue that formed out of thin air; rather, it was a conscious decision to prioritize profit over the wellbeing of others and the planet itself. Morality isn’t at the forefront of their minds and since businesses have immense free will, why do they find it so difficult to change that narrative?
Many are still skeptical. Somehow, social responsibility has become synonymous to the infringement of corporation rights. However, social responsibility does more good than harm in fostering trust between corporations, consumers, and workers. In the growing age of social consciousness, businesses will have to adapt their practices in order to maintain public trust and continue to profit.
There are a couple businesses that have done so and continue to be extremely profitable. Nike, in the 1990s, received heavy criticism for producing items out of sweatshops where people worked in horrible conditions with unfair pay. In response to the immense backlash, they made an effort to increase transparency and established a code of conduct to ensure fair working conditions in the Nike supply chain. Some of these conditions include fair compensation, forbidding child labor, and forbidding forced labor. Along with this, Nike continues to make strides in reducing their carbon footprint and limit the use of resources in creating products.
Another great example is Patagonia, which has a long-standing commitment to protecting the environment. Patagonia has always aligned itself with environmental sustainability and the business makes conscious efforts to reduce their carbon footprint while producing quality clothing to consumers. Although imperfect, these are significant steps to maintain a moral balance alongside remaining profitable businesses.
It’s no secret that many organizations have become overwhelmingly attached to their own personal gain, that they see no real benefit in ensuring that workers are treated fairly, they’re not committing human rights violations, they’re not exploiting natural resources, and many other issues. This will be the downfall of many organizations, especially profit-myopic corporations.
If we intend to improve capitalism, and we must, organizations of all kinds need to start thinking beyond their personal profit and acknowledge the importance of fair and ethical business practices. If we want to make capitalism work for us in any capacity rather than against us, it's especially necessary for large corporations and businesses, which lead the way in demonstrating ethics that perpetuate inequality, to make changes now.
What about you? Share your story, question, comment, idea, disagreement -- yes, we welcome disagreement for the sake of mutual benefit! -- with us at blog@PartnershipEconomics.com. We will give a thoughtful response.
Our Amazon #1 New Release Book (2021) and Kindle #1 in Law Ethics & Professional Responsibility (2022): Unleash more with Better Capitalism: Jesus, Adam Smith, Ayn Rand, & MLK Jr. on Moving from Plantation to Partnership Economics.