The Templeton Foundation has up a “Templeton Conversation” concerning the question “Does the free market corrode moral character?”
I am honored to share a symposium with Garry Kasparov, among other notables, including Robert Reich, Jagdish Bhagwati, Bernard Henri-Levy, Michael Novak, and others. My answer to the question is “No, on balance” and here is my opening bit:
In matters of morality, the free market functions like an amplifier. By placing more wealth and resources at our disposal, it tends to boost and accentuate whatever character tendencies we already possess. The net result is usually favorable. Most people want a good life for themselves and for their families and friends, and such desires form a part of positive moral character. Markets make it possible for vast numbers of people, at every level of society, to strive for and achieve these common human ends.
Jay Richards at The Enterprise Blog:
The John Templeton Foundation runs a series called “Big Questions” in which they ask a diverse group of experts and public intellectuals to answer, well, a big question. One of them deals with the question, “Does the free market corrode moral character?” This is probably the most common conservative objection to the free market.
Answers from the thirteen respondents are all over the place, of course. We get “Yes, but …” from Gary Kasparov, “To the contrary” from Jagdish Bhagwati, “We’d rather not know” from Robert Reich, “No” from Senator Rick Santorum and the American Enterprise Institute’s Ayaan Hirsi Ali, and “No! And well, yes” from AEI’s Michael Novak.
All of the answers are worth reading. It struck me that most of these experts have a far more subtle and accurate understanding of the market than do many on the religious Left, who frame their criticisms in moral language but often seem satisfied with simplistic clichés.
Jonah Goldberg at The Enterprise Blog:
I liked Jay Richards’s post about markets and moral character, but I think he leaves out another important point. Robert Reich complains that the market erodes the wages of workers. This is of course sometimes true for some workers for some of the time (though it’s hardly as if workers in more statist societies uniformly see their paychecks swell). But let’s stipulate for the sake of argument that Reich’s example of (relatively) free trade eroding wages has merit. That same sort of trade indisputably improves the purchasing power of those wages. If China can make a widget at a third of the price, then an American family desperately in need of widgets can save a lot of its money by buying Chinese widgets.
But in Reich’s example of big-box stores benefiting consumers he makes it sound as if saving money on life’s essentials is some sort of shabby enterprise, as if wanting to spend less on milk and bread is a form of greed.
I’m no unmitigated fan of Wal-Mart, but it can’t be denied that Wal-Mart—and stores like it—have improved the lives of a lot of low-income families by making life’s necessities, and even its luxuries, affordable. Lightbulbs put a lot of candle makers out of business, but lightbulbs also made indoor lighting cheaper, safer, and more widespread. That’s a good trade.
One last point. I love the Templeton Foundation and I think they do fantastic work. But questions like “Does the Free Market Erode Moral Character?” bother me a great deal. As opposed to what? Socialism? Socialism certainly erodes moral character. Some of the most alienated, selfish, deracinated people I’ve ever met were people who grew up under the yoke of Communism. Arthur Brooks’s work has definitively shown that large welfare states siphon off philanthropy and erode altruism.
Adam Smith’s case for the free market rested on the fact that it encouraged good character (as Yuval Levin recently detailed), and I think Smith won that argument a long time ago. A more fruitful question, with deep religious and philosophical implications and precedents, would be “Does wealth erode moral character?” Debating that would still allow for some healthy attacks on the free market, because without free markets, wealth really isn’t something to worry about.
E.D. Kain at The League:
Indeed, this follows up on what I’ve been writing about vis-a-vis markets and the language of markets and so forth, because he – like Jason – asks the important question: what is the alternative to free market capitalism?
I think the important policy debate will become one not between communism and capitalism, but between the sort of high-tax free market society in Western Europe and the American system of much lower taxes, fewer services, etc. This debate must be framed properly. We are not Europe after all, nowhere near as homogenous culturally, and far more populous than any one European democracy. What works there will not work here. But certainly the success of social democracies in Europe requires that some debate between the American and European system be had. Marxism may be dead – and good riddance – but cradle-to-grave nanny statism is alive and kicking, and has largely embraced a relatively free market approach to economic policy.
How morality figures into all of this is a much more difficult question to answer. Does wealth erode our moral character? It certainly can. Does state-provided welfare similarly effect moral character? I imagine it could.
But where should morality figure into policy – especially economic policy? Again, I think these are the debates worth having. As is the question of how to centralize or decentralize power. Simply firing back and forth about markets themselves seems as futile as arguing for or against state-provided safety nets. It’s the how, not the what, that is at question. Markets and social welfare are both here to stay, at least for a good long time.
I don’t understand Jonah’s objection. “Does wealth erode moral character?” strikes me as a less fruitful question, because the answers are less likely to be controversial. Most of the world’s religious traditions teach that yes, it does. The arguments there are familiar. It would be harder to make a “no, it doesn’t” argument, at least based on the evidence, but I suppose one could make an interesting case that wealth might erode moral character, but not as much as grinding poverty does.
Posing it as Templeton did strikes me as guaranteeing a more insightful debate, especially given that there are a lot of serious people critical of the free market in the wake of the global meltdown. Mind you, Templeton is foursquare behind free markets, but it is by no means clear that free markets and moral virtue fit hand in glove. In fact, if you look at the (excellent) collection of answers we received, you’ll find a variety of opinions short of a full-throated “Yes!” from well-known capitalists and conservatives like Michael Novak and John C. Bogle. The discussion is more fruitful than Jonah gives it credit for being.
In my book “Crunchy Cons,” I quoted author Alan Ehrenhalt saying, “To idealize markets and to call oneself a conservative is to distort reality.” Ehrenhalt’s point is that the free market is so dynamic by nature that it makes it very difficult to conserve certain moral values and institutions that conservatives consider essential to the good life. Notice, though, that Ehrenhalt uses the verb, “to idealize.” That’s important. Few of us today would doubt the superiority of the free market over competing economic systems in providing for the material needs of the population. What we debate is where to draw the line — that is, which parts of our common life should be off-limits to market morality. If I’m reading Jonah correctly, he doesn’t believe that the market can corrode morality. Or rather, because there is no sensible alternative to some form of market capitalism, the question of whether the free market erodes moral character is a meaningless one. This I don’t get.