As part of its First Principles series in Political Thought, the Heritage Foundation has published The Moral Basis for Economic Liberty by the Rev. Robert A. Sirico, president and co-founder of the Acton Institute. You can read the paper online or download as a PDF.

Abstract:

Today, those who defend free markets and capitalism often do so solely on managerial or technical grounds, but economic liberty needs a moral defense as well. Defense of economic liberty without reference to morality will ultimately prove injurious to liberty itself. Rightly understood, capitalism is simply the name for the economic component of the natural order of liberty. It means expansive ownership of property, fair and equal rules for all, economic security through prosperity, strict adherence to the boundaries of ownership, opportunity for charity, wise resource use, creativity, growth, development, prosperity, abundance. Most of all, it means the economic application of the principle that every human person has dignity and should have that dignity respected.

And a key insight:

So long as economic liberty—and its requisite institutions of private property, free exchange, capital accumulation, and contract enforcement—is not backed by a generally held set of norms by which it can be defended, it cannot be sustained over the long term. Into the moral vacuum left by capitalism’s defenders rush notions hostile to economic liberty, notions drawn largely from the values and vocabularies of interventionism and socialism.

Further, if a principled defense of markets based on the sanctity of private property and the virtue of voluntarism is absent from public life, it is very likely that the moral center of the buying public has begun to slip as well. In any market, the kinds of goods and services producers provide reflect the values of the consuming public. What consumers are willing to purchase will determine what kinds of goods and services are most prominent in the market.

  • mandeville

    Morality are the rules that justify the relative distribution of power in a society. It varies as the distribution of power changes, such as from the few to the many or vice versa. Power invents morality and educates the masses to consider the “existing” power structure as moral and just.

    Capitalism is born when power is shared equally enough whereby private property and liberty are highly held values in the society, but that does not mean people desire or like capitalistic competition, for they have no choice.

    The true nature of every business man, every business entity, every producer, and every consumer is that of a monopolist rather than a capitalist. Every day, millions of human social and economic transactions, contracts and exchanges occur that have the monopolistic characteristic of profit and/or market share maximization. Capitalism “happens” when natural monopoly, derived from unequally shared power, is broken down by both political and economic competition. Monopoly preceded capitalism in history but is succumbing to it over time. A concentration of political power is necessary for monopoly and from its diffussion springs capitalism.

  • http://preachersstudyblog.com/?utm_source=campaign&utm_medium=campaign&utm_campaign=campaign Bryant

    I have not yet read the entire paper but its encouraging to see morality linked with economic issues. Divorcing such issues from any moral grounding can only produce horrible outcomes.

    People cry against greed in the marketplace and in doing so make a moral argument. But the same people seem to think nationalization of the means of production to be a good idea. But theft under any other name is still immoral.

  • Rich

    We need this message now more than ever, re: the moral basis and foundation of the free market economy. Seems like people are being lulled into liberation theology again, thinking that socialism is more moral than the market.

  • http://www.remnantculture.com Joseph Sunde

    I especially like this part:

    “In any market, the kinds of goods and services producers provide reflect the values of the consuming public. What consumers are willing to purchase will determine what kinds of goods and services are most prominent in the market.”

    This would also seem to imply that in a morally vacant (though perhaps “just”) free society, consumers will be able to provide a more accurate reflection of their morality and values (through purchases…and other nonmaterial forms, of course).

    In other words, there is this notion of the morality of the market itself (which is important), but there is this other component the market can’t account for or manipulate (personal salvation, morality, values, etc.). However, once again, it would seem that the market CAN actually provide a more accurate reflection of societal morality, values, etc.

    In many ways, a free society is a more transparent and honest society, and thus it is one that is easier to judge with human eyes.

    For example, if we outsource charity to the government, how are we ever to know how capable our society really is when it comes to charity? In the “interventionist” or “socialist” society, such perceived societal morality is artificial, at best.

  • Roger McKinney

    The power of socialism lies in its elevation of envy to a virtue.