The Olympic Philosophy as a Model for “Moral Capitalism”
Kimon Valaskakis Ph.D*
One aspect of the contemporary globalization debate has centered around the desirability of a more “moral” capitalism, a humane alternative to the present free for all version with its growing armada of detractors. 28 centuries after their inception, the Olympic Games may yet provide a useful intellectual model for such an ethical market system. Olympism and Capitalism share one central feature but diverge on a number of others.
A Common Point : The Culture Of Achievement.
Olympism is the drive to achieve what the Greeks called the 'aristos' or the best of everything. The path is arduous and involves intense competition. There is no free ride in the Olympic 'agon' from which the word agony is derived. This is not communism. There is equality of opportunity but to the winners go the spoils in the form of rich rewards. Similarly, in the Adam Smith’s version of pure capitalism, successful entrepreneurs are rewarded by handsome profits and bigger market shares. “To each according to his achievement” as opposed to the communist ideal of "to each according to his needs." The renowned sociologist Max Weber pointed out in his Protestant Ethic and the Spirit of Capitalism that free market philosophy is based on the biblical parable of talents. A father gives 100 talents (a biblical monetary unit) to each of his three sons and asks to see what they have done with this capital after one year. The first spent all the money. The second returned the exact amount while the third invested it, returned the principal to his father and kept a profit of another 200 for himself. It is the third son who gets his father's blessing. To make money on the free market is both moral and desirable. To succeed in Olympic disciplines and to be justly rewarded is equally moral. The parable of talents is the philosophy of both pure Olympism and pure Capitalism. But contemporary global capitalism and the Olympic spirit diverge in at least three ways.
1- Gold For The Winners But Something For The Losers Too.
Consider the philosophy underlying the Roman Coliseum on the one hand and the Athenian Stadium on the other. In the former the losing gladiator is eventually killed. In the Olympic mode the loser goes home to compete another day. There is great respect for defeated opponents who are treated with deference and friendship. Although not as bad as the Roman Coliseum, the contemporary global economy is also gladiatorial and pitiless. 1 billion out of 6 billion people on this earth command 80% of global income with the remaining 5 billion living on less than $2 a day. Scarcities in clean water, basic resources, medical help, coexist with the lavish expenditures of a select few. Furthermore, in global capitalism, safety nets for the losers are disappearing. Globalization has reduced the ability of nation-states to redistribute income through appropriate social policies for fear of driving away footloose corporations. For instance, France’s 35 hour workweek in under attack because of the fear of relocation by footloose corporations. The catch-as-catch-can competitive environment leads to a race for the bottom with the danger of gradual dilution of social protection. International redistribution of income through official development assistance is awkward and on the whole ineffective. In some cases the net result, as one observer put it, is to take money from the poor of the rich countries (through taxation) to give to the rich of the poor countries (through official development assistance). Much of this “aid” often ends up in Swiss bank accounts.
An “Olympic style” economy on the other hand would pay much more attention to the treatment of losers and would end up with a more balanced distribution of income.
2 - Affirmation Of The Nation-State Within Globalization.
The Olympics wholeheartedly embrace globalization yet athletes compete under a national banner. There is great pride in hearing the national anthem of winning athletes and a full sense of participation by their compatriots. What is more, “national identity” is no longer racist in nature since athletes of all ethnic groups compete together. Thus a Kazakhstan naturalized citizen, brings home the judo gold for Greece. Africans compete for European Teams, a German coach helps the Greek soccer team win the Euro-cup etc. Hitler's misguided attempt in the 1933 Berlin Olympics to prove the superiority of the Aryan Race was soundly defeated by the performance of black athletes. The re-affirmation of the nation-state is realized without rejecting globalization yet it is done in a non-racist inclusive way.
Contemporary capitalism, is also not racist but, unlike the Olympics, it is becoming stateless. Multinational corporations have lost their national identities and in the process many have lost any sense of solidarity or concern for their country of origin. The search for profits (sometimes decided in the board rooms of holding companies located in tax havens) is eclipsing the social concerns which, in pre-globalization capitalism, influenced the decision-making of many CEOs. An Olympian Capitalism would find ways and means to strengthen national identity and subordinate profits to cultural and ethnic concerns of established countries.
3- Rules Based Competition Versus No-Hold-Barred Free for All.
Perhaps the most uplifting aspect of the Olympic Spirit is the idea that the purpose is not to win at any cost but to compete honorably. There are many aspects to this honorable competition. First there is a transposition away from armed conflict to athletic rivalry. The ancient Greek games were accompanied by an Olympic truce where struggle was transferred from the battlefield to the sports arena and wars were temporarily halted. Second, the notion of self-restraint and limited rivalry were present in both the original and the modern versions of the games. From the Marques of Queensberry to the Chariots of Fire movie the virtues of measured and controlled competition as opposed to rule-less extreme struggle have been extolled and enhanced. Third, not content with just self-restraint Olympic competition is strictly rules based. In the modern games, a central authority, the IOC (International Olympic Committee) regulates all aspects of the games. In fact, and quite surprisingly, the IOC exerts supra-national authority over the Olympics overriding governments and other public institutions. It is both a rule-maker and a rule enforcer and cannot be second guessed by national members. Curiously, it is almost sovereign in its field of endeavor, from the attribution of future Olympic Games to competing cities to the disciplining and banning of cheaters.
Nothing equivalent exists in global capitalism. The closest candidate for the position of ‘global economic regulator’ is the WTO (World Trade Organization) but suffers, in its present form, from many design flaws and handicaps. First its mandate is too narrow. It is supposed to set rules for trade issues but is much weaker or has no jurisdiction on the underlying related questions such as investment rules, environmental protection, gender issues, social legislation etc. Second, its internal governance, like most intergovernmental agencies, is consensus based which allows small minorities to block change. Decision making is painfully slow. Third its legitimacy is increasingly in doubt, from the 1999 fiasco of the Millennium Round in Seattle to the semi-failures of the Doha, Cancun and more recent meetings. As an indicator of this, the growth of influence of Civil Society is directly related to the perceived lack of legitimacy of the WTO. Fourth, the enforcement mechanisms of most IGOs (intergovernmental agencies) remain quite weak. They range from “moral suasion” (a sort of name and shame system between sovereign countries encouraging each other to adopt better behavior) to vague sanctions which more often than not are quite ineffective especially when the offending country is a great power. Fifth and perhaps most important, the WTO is focused on disciplining governments rather than non-state actors which effectively escape its jurisdiction. Non-state actors, including multinational enterprises, NGOs, special interest groups with economic clout have been the rising stars of the global economic system and exert much greater power than most national governments. In the absence of some form of truly effective international economic governance, globalization has created a world without borders which has, inadvertently become a world without rules. Legislation is limited by national borders and the plethora of competing jurisdictions has created major opportunities for cheaters. As one observer put it, "with a good accountant, a smart computer programmer and a shrewd lawyer it is possible to do almost anything, declare fictitious profits or losses, shift operations from country to country at will and create ephemeral stock market value to entrap gullible investors. Given the absence of global rules, the term "cheating" may not even apply since very often, no laws are broken.” Since the object of the WTO is to bring about world free trade, not produce an enforceable model of “moral capitalism” it does not, in its present form, offer good prospects for the promotion of the latter.
Olympian Capitalism?
The founder of the theory of capitalism, Adam Smith was, in many senses a philosophical Olympian. His belief that the market was the "invisible hand of God" was rooted in deep religious conviction, the glorification of achievement, the rewarding of success but above all the respect of ethical rules. The State was seen as umpire, as arbiter, the rule maker and rule enforcer. Without the authority of the State, competitors could go wild and the system would degenerate in anarchy.
It is clear, that globalization requires a more moral capitalism to go along with it. This cannot be achieved by counting solely on the voluntary self-restraint of entrepreneurs. If it could, why would commercial law be needed at the national level? All that would be needed is the right attitude by CEOs. Not confident that this is enough, nation-states depend on explicit legislation to regulate the operation of market systems within their borders. Interestingly, the United States, the paragon of free enterprise is one of the most regulated of all capitalist countries - from consumer protection to the illegality of insider trading, and has always advocated the virtues of a level playing field, However the effectiveness of its regulatory power, as that of all countries, has been eroded by globalization which allows footloose non-state actors to distribute their activities in such a way as to escape national laws, hence the free-for-all version of capitalism which has manifested itself by so many corporate scandals, from Enron to Parmelat and beyond.
Ultimately a global equivalent to the IOC would be needed if Moral Capitalism is to come about. Admittedly the real IOC is itself riddled with internal governance problems. It is, like all human institutions vulnerable to corruption and to the undue influence of both state and non-state actors. It is not democratically elected and, in addition, is accountable to no one, thus itself ending up as a non-state actor more powerful than many states. This being said, it has been successful in staging good Olympic Games which have been the joy of athletes and participants and have exalted the human spirit. True, there have been commercial excesses here and there and some cheating. But most cheaters have been punished and the Olympic Spirit has been given full exposure especially in the recent historic Athens 2004 Games which were a sort of a return to fundamentals. As Olympic Competition has temporarily returned to its birthplace we can hope that some day a truly Moral Capitalism will emerge where to the winners go the rewards but to the losers a satisfying sense of inclusion, participation and respect.
* Kimon Valaskakis is a former Canadian Ambassador to the OECD and professor of Economics at the University of Montreal. He is the Founding President of the Club of Athens Global Governance Group an international initiative advocating and promoting major improvements in global governance through institutional reform and attitude change. The Club of Athens will hold its inaugural meeting in Athens Greece in October 2004 in a conference entitled : The Olympics of Governance : Exploring New Ways of Managing Our World.
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