The question could intend any number of things. Capitalism has to do with the rationalization of labour, or the means of production, with the end turning a profit. Morality has to do with freely choosing to limit one's courses of action for the sake of maintaining one's community with other persons. As a consequence, a straight-forward interpretation of the question makes little sense. Capitalism does not equal morality; nor does morality equal capitalism. The two are out of step with each other. For the sake of turning a profit, an employer should fire an inefficient employee, even if that employee is family; while familial ties may encourage employers to engage in less than rational economic activities by letting the ineptitude of a family member slide. This sort of activity has a particularly has been given a name that leaves a bad taste in the mouth even as it rolls off our tongues: nepotism.
The question might imply that capitalism is moral in the sense of being a good form of economic activity. Nuance is introduced by introducing a third element into our consideration. Here we assume that capitalism stands over against something else as good stands over against bad. Presumably socialism or communism fulfills that other function. We also have to define clearly why capitalism might be thought to be good. A plausible way would be to affirm the integral place of individual initiative in capitalist enterprise. Instead of relying on the creative direction of a small number of individuals at the top of a pyramid of political authority, the better way is to encourage every individuals to create their own oppourtunities for making a profit.
Steven Pearlstein of George Mason University has published an opinion piece in the Washington Post asking the question, 'Is capitalism moral?' He argues that debates over 'libertarian nostrums that greed is good, what’s mine is mine and whatever the market produces is fair' misconstrue the import of the question. These debates tend to pit bad government intervention and regulations over a good marketplace against good government action restraining and redistributing wealth from a necessary, but evil marketplace. But he says,
In our current debate over capitalism, too much attention is focused on whether, how or how much to redistribute the incomes that markets have produced, with too little focus on the institutional arrangements that determine how that income is divided up in the first place.His point about institutional arrangements actually changes the nature of the discussion. In the traditional right vs. left debate, the market is a place where individuals compete with other individuals. Some individuals prove themselves more capable than other individuals and become employers while the rest become employees. But in an increasingly complex economic situation, relations between employers and employees are not simple and straightforward. The economic ideal of a reward system based on individual merit fails to appreciate how capital actually moves.
Institutional arrangements, in fact, disproportionately advantage a small number of individuals over the rest of the population. (They advantage the same people most likely to argue for the reduction of taxes, fault government inefficiencies for low wages and high unemployment levels, and accuse the economically disadvantaged of being 'takers'.) Present institutional arrangements seem to be exacerbating economic distances between the wealthy and the poor. Twenty years ago, for example, wage and salaried workers claimed 75% of income in the United States, while today those numbers of fallen to 67%. Fifty years ago, the average corporate executive made 50 times more than the average front-line worker, but today they make 350 times as much. Old platitudes about the virtues of the marketplace fail to account for the massive shift in the concentration of wealth.
There is a third possible intention behind asking the question, which would acknowledge the intrinsically moral nature of human thought and action. Though readers of the Washington Post have to be content with the identification of a problem, as Pearlstein never gets this far in his analysis.
If our moral obligation is to provide everyone with a reasonable shot at economic success within a market system that, by its nature, thrives on unequal outcomes, then we ought to ask not just whether government is doing too much or too little, but whether it is doing the right things.Notable here is that avoidance of saying anything definitive about morality. All Pearlstein says is that if X, then Y. No doubt, the rhetorical effect of this sort of structure is to invite readers into the argument. If readers agree with X, then Y should also follow. So far so good. Since morality is about self-limitation for the sake of the community of others, we have no business dictating tenets of morality to others. No problem here.
But the form of Pearlstein's conclusion is problematic in its emphases. It's about economic relations between persons, not about economic relations between persons. The conceptual weight in the sentence falls on adjective rather than the noun. Which should strike us a as being incongruous. In the same way an adjective modifies a noun, the term economic modifies what sort of relations between persons. Persons are always more real than the specific forms taken by their relations with other persons. Or, at least, they ought to be considered as such.
And if, as I claimed above, morality has to do with self-limitation for the sake of the community of others, then it follows quite naturally that capitalism is always and everywhere moral. Because it attempts to describe how human beings relate to each other, capitalism always has been, and always will be.