The John Templeton Foundation has a new Web page hosting a forum on the question: Does the free market corrode moral character? There are some good answers there given by some intellectual heavy hitters. In fact, most of the answers turn out to be much better than the question. Can you spot the problem? Consider these questions: Does religion corrode moral character? Do books corrode moral character? Do paved roads corrode moral character?
If those sound a bit leading, then you get the point. Even if one answers “no,” the question doesn’t invite a consideration of whether the free market might be good for moral character. The question doesn’t contemplate any possible validation of free markets. The Foundation might have asked: Just how evil is it? A far better question about free markets would be: Is capitalism good for the soul? (You can find an answer to that question in “Why Capitalism Is Good for the Soul,” by Peter Saunders, The Insider, Spring 2008.)
A further problem is that the question treats free markets as if they are some frilly treat like ice cream. If too much is bad for you, then don’t eat so much. But unlike forgoing ice cream, forgoing free markets doesn’t mean just having less of the one thing; it means having more of something else. It means having an alternative system for deciding how limited resources with alternatives uses shall be employed. What is that alternative system and how would that system be better for our moral character? That part of the question is usually ignored by critics of free markets.
Robert Reich’s answer exemplifies this problem well. He worries that in a free market consumers become disconnected from the consequences of their choices. They should care, he says, about the fact that buying from a big box retailer offering lower prices puts the little retailer on
But, we should ask: What alternative economic system encourages consumers to be less selfish? What economic system gives consumers better feedback about the consequences of their choices? What other economic system can produce the high-quality products needed to maintain the well being of Reich’s neighbors on
Of course, everyone knows what the alternative to a free market economy is, because that experiment has already been tried—many times. We already know that economies planned by centralized bureaucracies do not empower consumers with more information or social awareness. We already know that centrally planned economies do not protect the little guy against the designs of his politically well connected competitors. And we already know that centrally planned economies make people poorer.
Reich says we should worry about how our individual choices as consumers affect other people. But why not worry also about how our preferences for an economic system impact other people? There is a massive historical record that shows that free markets do a much better job of satisfying people’s wants and needs. If it is moral to care about other people’s well being, then it must be moral to support free markets.
One suspects that for Reich and others “free markets” are just a synonym for “things as they are.” And who is completely satisfied with things as they are? The question, Does the free market corrode moral character? tempts the person answering to imagine how human beings might be better than they are. If you think people can be better than they are, then you are likely to want to believe there is some means of making them so. But if men need improving by government, then you have a dilemma that can’t be ignored. A commenter on the site summed up the problem very well:
A free market is subject to abuse by those who are morally deficient, and regulations are necessary to deter that abuse. But if the regulations are composed and enacted by greedy, morally deficient legislators who put self-interest before the public interest, then the abuses have only been multiplied.