Ethical socialism is a political philosophy that appeals to socialism on ethical and moral grounds as opposed to economic, egoistic, and consumeristic grounds. It emphasizes the need for a morally conscious economy based upon the principles of service, cooperation, and social justice while opposing possessive individualism. Therefore, in contrast to socialism inspired by rationalism, historical materialism, neoclassical economics and Marxist theory which base their appeals for socialism on grounds of economic efficiency, rationality, or historical inevitability; ethical socialism focuses on the moral and ethical reasons for advocating socialism.
Ethical socialism is a form of liberal socialism closely related to Christian socialism, and had a profound impact on the social democratic movement and reformism during the later half of the 20th century, particularly in Great Britain. Ethical socialism is distinct in its focus on criticism of the ethics of capitalism, and not merely criticism of the economic, systemic, and material issues of capitalism.
The term "ethical socialism" initially originated as a pejorative by the Marxist economist Rosa Luxemburg against reformist revisionist Marxist Eduard Bernstein and his supporters, who evoked Kantian liberal ideals and ethical arguments in favor of socialism. Soon self-recognized ethical socialists arose in Britain, such as R. H. Tawney, a British Christian socialist, and its ideals were connected to Christian socialist, Fabian, and guild socialist ideals. Ethical socialism was an important ideology within the British Labour Party. Ethical socialism has been publicly supported by British Prime Ministers Ramsay MacDonald, Clement Attlee, and Tony Blair.
When the Social Democratic Party of Germany (SPD) renounced Marxism during the Godesberg Program in the 1950s, ethical socialism became the official philosophy within the SPD.
Ethical socialist thought emphasizes the need for a morally conscious economy based upon the principles of service, cooperation, and social justice while opposing possessive individualism. Ethical socialism is distinct in its focus on criticism of the ethics of capitalism, and not merely criticism of economic and material issues of capitalism.
R. H. Tawney denounced self-seeking amoral and immoral behaviour that he claimed is supported by capitalism. Tawney opposed what he called the "acquisitive society" that causes private property to be used to transfer surplus profit to "functionless owners" – capitalist rentiers. However Tawney did not denounce managers as a whole, believing that management and employees could join together in a political alliance for reform. Tawney supported the pooling of surplus profit through means of progressive taxation to redistribute these funds to provide social welfare, including public health care, public education, and public housing. He supported nationalization of strategic industries and services. Tawney supported worker participation in the business of management in the economy as well as consumer, employee, employer, and state cooperation in regulating the economy.
Though Tawney supported a substantial role for public enterprise in the economy, he stated that where private enterprise provided a service that was commensurate with its rewards that was functioning private property, then a business could be usefully and legitimately be left in private hands. Ethical socialist Thomas Hill Green the right of equal opportunity for all individuals to be able freely appropriate property, but claimed that acquisition of wealth did not imply that an individual could do whatever they wanted to once that wealth was in their possession. Green opposed "property rights of the few" that were preventing the ownership of property by the many.
Ethical socialism was advocated and promoted by former British Prime Minister Tony Blair who has been influenced by John Macmurray who himself was influenced by Green. Blair has defined ethical socialism with similar notions promoted by earlier ethical socialists, such as emphasis on the common good, rights and responsibilities, and support of an organic society in which individuals flourish through cooperation. Blair believes that the Labour Party ran into problems in the 1960s and 1970s when it abandoned ethical socialism, and believes that the Labour Party's recovery required a return to the ethical socialist values last promoted by the Attlee Labour government.