It’s a worthy purpose of philanthropy to deepen our understanding of the free market and of capitalism. There are several ways donors can do this. One is to do what the Liberty Fund does and publish great works by champions of the free market in affordable, sturdy editions.
Another thing donors ought to do is hold adult education courses where people can study great free-market thinkers. Twenty years ago, the Bradley Foundation, as part of its Bradley Scholars series at the Heritage Foundation, required the scholars holding fellowships at Heritage to hold courses where we studied great books we should have read in college but didn’t. Thanks to Heritage, I had excellent classes with Paul Rahe on Thucydides, Thomas Lindsay on Aristotle, and Nigel Ashford on Hayek and on neo-conservatives.
The Bradley Scholars program is now a part of the happy, distant past. But I see no reason why other donors couldn’t hold similar programs. I believe some of the centers for conservative and libertarian scholars associated with colleges have, as part of their mandate, adult education classes. They ought to hold more of them.
Another way one can keep studying capitalism is, of course, continued reading. Writing in the Financial Times, John Plender, a staff writer at that newspaper, explores the question of whether or not capitalism is moral in this article.
Plender’s article is adapted from his new book, Capitalism: Money, Morals, and Markets. Irving Kristol once famously gave capitalism two cheers instead of three, and it would not surprise me if Plender didn’t give more than one cheer for the free market. After all, the paper he works for, despite its all around excellence, has, with the retirement of Sir Samuel Brittan and the departure of Christopher Caldwell, only one consistent libertarian voice in Tim Harford.
Nonetheless Plender makes a lot of good points. His piece is about the whole issue of whether or not capitalism is moral. He notes that the answer to that question depends on whether the person making the statement lived in a period of economic growth or of stagnation.
The anti-capitalists, in his view, include many great thinkers. Plato, in the Laws, has one character denounce business as “breeding in men’s souls knavish and tricky ways.” Aristotle thought that trade undermined one’s confidence in one’s local community. Neither Jesus nor St. Paul had much to say in favor of the rich.
But much of the reason why these teachers didn’t like the wealthy, Plender says, is that there was very little economic growth until around 1300. “Without growth,” he writes, “trade seemed a zero-sum game where one man’s profit inevitably inflicted loss on another man. The moral basis of trade thus appeared dubious.”
The first prominent thinker to support trade was the Prophet Mohammed. But it was the Italians of the 14th century who successfully traded with other nations, causing Italy’s economy to expand, thanks to an early form of capitalism and “reasonably clear property rights.” This led Bocaccio, in The Decameron, to write that “merchants are cleanly and refined men.”
Capitalism got an additional intellectual boost in the 17th and 18th centuries, when writers such as Hugo Grotius, Baruch Spinoza, and Thomas Hobbes saw capitalism as a more humane alternative to military conquest. “The natural effect of commerce is to lead to peace,” Montesquieu wrote in The Spirit of the Laws. “Two nations that trade together become mutually dependent; if one has an interest in buying, the other has one in selling; and all unions are based on mutual needs.”
The dramatic expansion of capitalism in the nineteenth century, says Plender, has meant that “the vulgarity and pretension of the nouveau riche” were rich subjects for satire by Balzac, Dickens, Zola, Dostoevsky, and Trollope who “excelled in the portraiture of miserly ogres and business ogres.” Ayn Rand is the obvious counter-example here, but we obviously need more novels that portray business creators not as villains, buffoons, or superheroes, but as ordinary people with ordinary failings trying to make their communities better.
Plender offers one more significant quote, this time from John Maynard Keynes’s General Theory of Employment, Interest, and Money:
“Dangerous human proclivities can be canalised into comparatively harmless channels by the existence of opportunities for money making and private wealth, which, if they cannot be satisfied in this way, may find their outlet in cruelty, the reckless pursuit of personal power and authority, and other forms of self-aggrandizement. It is better that a man should tyrannise over his bank balance than over his fellow citizens.”
One is reminded here of the immortal statement that David Letterman made during the 1991 Gulf War, that someone should give Saddam Hussein a burrito, on the grounds that no one ever got into trouble while eating a burrito. But Keynes, who was an excellent writer, has nonetheless made a sound, (if somewhat overwrought) point. We all want to make something of our lives, to have a telos, something we made that can endure. Tyrants achieve these goals dishonorably. Someone who creates a business that he or she can pass on to their children is being more responsible and productive.
In asking “Is capitalism moral?” we are asking the wrong question. The better one is, “Are capitalists moral?”, and the answer is that they can and should be in their dealings with others and in how they live their lives. The best training a donor can have is to have led a virtuous life as a productive entrepreneur.