Free Market Capitalism, Moral Character And Doing Good All Work Hand In Hand
from the can-we-get-over-this-already? dept
I’ve never quite understood the complaints of some that free market capitalism somehow goes against morality or good deeds. As we’ve discussed in the past, moral questions shouldn’t even come up at all in scenarios where everyone is better off. Moral questions only arise in scenarios where some are worse off and some are better off, and a decision needs to be made about who is worse off and who is better off. The nice thing about free market capitalism is that it tends to increase the overall pie, allowing a much larger number of people to be better off, and tends to do so in a more efficient manner than other systems.
Yet, then we have odd stories about people complaining about for-profit charitable organizations even when those charitable organization end up raising significantly more money for charities than their non-profit “competitors.” There’s nothing inherently evil about profit — and if you look at much of the important charitable giving out there today, it was created because of profit. The Bill and Melinda Gates Foundation — which is based on this very idea of doing good through capitalism is built off of the vast profits earned by Gates and Warren Buffet. Google’s charitable wing, Google.org, is also designed as a for-profit enterprise, recognizing that if it can make everyone better off while making itself better off, there’s no moral dilemma at all.
But, still, there are some who suddenly question whether or not the free market takes away a moral backbone — but the only situations in which that would clearly be true are in cases of either outright fraud, or where you’re dealing with a zero-sum game. In an economy that has the potential for growth, then one should encourage more growth to increase opportunities for everyone. There may be additional moral questions later concerning overall allocation, but increasing the wider opportunity, which is exactly what free market capitalism does, seems ridiculous to question.
In the end, it seems that some have this odd guilt associated with money — as if because one person has made a lot of it that it somehow takes away from others. That’s simply not true. Adam Smith, who wrote the original book on free market capitalism, The Wealth of Nations, only did so after first writing a book on morality, called The Theory of Moral Sentiment. Free market economics and morality go hand in hand. To think that they’re mutually exclusive shows both a misunderstanding of morality and economics.