utorok, apríla 03, 2007

Pascal Salin: Capitalism is the only moral system

Extract from an interview with French economist Pascal Salin in TREND:

You came to Bratislava to give a lecture on capitalism - the most ethical system. How would you explain your views to those who consider profit immoral?

Profit is the consequence of a system that acknowledges and protects ownership rights and the freedom to conclude contracts. Someone who founds a company, concludes contracts with employees, purchasers and so on. This is a fair system as the employees receive their agreed wages. And if there is a residual difference between production costs and income – i.e. profit this belongs to the owner - the person who decided what to produce, entered into agreements with other parties, and so on. The profit is fully legitimate and there is no reason to redistribute it. What I do not understand is that something called national income should be redistributed. There is no such thing as national income, the only income is personal income. So we have to be careful with making such general statements.

A socialist would object that some things like healthcare are not a product.

You know, health care concerns individuals and that is how you should approach this issue. I do not know how it is in Slovakia, but in France you often hear politicians mentioning public health, but I do not know what this means. The public does not have health; only individuals do. Using the public and its interests as an argument is the result of the collectivization of healthcare. It is always easier to solve a problem by decisions made by competent people rather than by incompetent ones. And capitalism due to its close relation to ownership educates competent and responsible people who are aware of the impact their decisions have on their property. In a public system, people act irresponsibly because the fate of decision makers is independent from the fate of the property they decide on.

(Pascal Salin have held the lecture within Conservative Economic Quarterly Lecture Series organized by Conservative Institute)