Does the free market erode moral character?

by on October 6, 2008 at 10:32 am in Philosophy | Permalink

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.

There is much more at the links.

1 indiana jim October 6, 2008 at 11:13 am

Deirdre McCloskey’s book “Bourgeois Virtues” should not go unmentioned in this conversation; why has it been?

2 Hemaworstje October 6, 2008 at 11:23 am

here is my opening bid
the more open the market , the more the common people will be used by the kapalistic pigs of modern society.
kasparov levy novak Hmmm , oink oink.

3 libfree October 6, 2008 at 11:31 am

Working for the government erodes moral character. The free market erodes moral character. Maybe life erodes moral character?

4 liberty October 6, 2008 at 11:32 am

There is a huge amount of evidence that protection of property rights, and the natural free exchange that comes about in their presence, has been a huge boon to the moral character. Voluntary exchange replaces theft. Cooperation replaces violence. Peace can even replace war as international trade replaces plunder and invasion.

McCloskey is great on this, but many others discuss this too, from Adam Smith to Brink Lindsey.

5 Ian Dunois October 6, 2008 at 11:52 am

The Spanish Scholastics had answered this question long ago with their ethical answer to which is better for society, public or private property. Those who get ahead with public property are those that lie, cheat, and steal while as those that gain the most from private property are those that work as hard as they can or who create new ways to improve how much they produce. One is morally just, whilst the others is immoral.

Also, Tullock had pointed out that there is no system that can exclude the immoral man as anyone who is intelligent enough to realize what he must do to advance will do whatever it takes. Therefore if it be best for the immoral individual to perform an act that benefits himself but not the company, he will perform it; while as the moral individual would not. Even in a moral situation where the industry promotes the most moral, the immoral would mend his ways to appear to be the most moral in order to achieve his goal.

6 J Thomas October 6, 2008 at 12:38 pm

Not the free market itself.

But if you can influence the flow of large sums of money that aren’t yours, *that* erodes moral character. There’s likely to be a way you can influence that flow which will benefit yourself or your friends.

In that context I want to again link to this:

rmwarnick Says:

President Bush, in a matter of two weeks, went from (1) “There’s not a problem, the fundamentals of the economy are strong,† to (2) “Great Depression Two is only days away unless Congress gives me unprecedented amounts of money and unprecedented power NOW,† to (3) “Nothing’s going to happen for at least a month because we need to analyze and deliberate.†

He’s still got it. Never mind the fact Bush is the worst and least popular President ever. He can get away with anything, anything at all.

Being President of the USA is a moral hazard.

7 Superheater October 6, 2008 at 1:05 pm

This is a ridiculous question.

Free markets are effective at creating wealth. Wealth is has no moral attributes, it is a tool. This is
just about where most leftist idiots get lost, since they see know flaws or weaknesses in individual
humans. As a result of that failure, they either see some amorphous collective indifference (inadequate
“leadership”, or some morally neutral inanimate object (guns, derivatives) as the source of moral

Why aren’t we asking if the collectivist models erode moral character, given the fact that literally
hundreds of millions have died under its jackboots and in its gulags? We don’t even have to go into
the left’s ready willingness to vacate property rights and engage in theft to further its egalitarian

8 torris October 6, 2008 at 1:29 pm

Yea sure, because we all know that there was no corruption in communism, socialism, or mercantilism.

9 Andrew October 6, 2008 at 2:47 pm

Or do bad moral characters erode capitalism?

All I know is there are a lot of people I smile at at Wal-Mart that I wouldn’t trust with my neighbor’s dog.

10 meter October 6, 2008 at 3:45 pm

How about “Does belief in a utopian free market delude otherwise-sane people into ignoring the obvious?”


“Exactly how quickly are free-marketeers apt to shout out the knee-jerk, straw man response ‘But it’s better than anything else!!!!’ when asked if free markets erode moral character?”

11 Trevor Stone October 6, 2008 at 4:05 pm

While friendship bonds have been part of the philosophy of moral character at least as far back as the Confucians and Athenians, I think the more relevant moral issues is how you treat non-friends. How does the free market affect one’s dealings with people unlikely to engage with one in direct exchanges?

12 Gadfly October 6, 2008 at 7:29 pm

As the saying goes, absolute power corrupts absolutely. As power, i.e. legislative authority and wealth, is consolidated into the hands of the few those few are less restrained by others and thus are more empowered to impose their will, good or bad, indiscriminately.

“Constant experience shows us that every man invested with power is apt to abuse it, and to carry his authority as far as it will go… To prevent this abuse, it is necessary from the very nature of things that power should be a check to power.” – Montesquieu

13 October 6, 2008 at 8:05 pm

You can’t tell the complete truth in any endeavor and be successful. Try telling your boss that he’s an idiot or your wife that she looks like crap in the morning.

14 Bob Murphy October 6, 2008 at 8:49 pm

I didn’t follow the links, I haven’t seen anyone commenting here make this easy argument from definition, so I’ll do it: Anything that deviates from “the free market” by definition involves theft of someone’s property. So the question is equivalent to, “Does refraining from theft erode moral character?”

I think the answer to that is clearly “no.” Note, I am not arguing, “As long as everyone refrained from theft, the world would be full of virtuous people.”

15 geekette October 6, 2008 at 10:17 pm

“If you look at businesses that went from the founder’s garage to billion dollar assets. . .The neighbor is willing to help out those employees in need and he is concerned with their personal welfare.”

While this admirably captures the blessed, luminous soul that is Woz, it certainly does not describe Steve at all. Not that we love him any less.

16 Ricardo October 7, 2008 at 12:18 am

however, the pillars of Wall Street who are currently falling make it appear more likely than not that the free market does erode moral character.

Isn’t that kind of like saying that the adversarial criminal justice system erodes moral character? After all, look at mob lawyers or Mike Nifong. Or that democratic government erodes moral character if you look at some of the scumbags that democracies are prone to elect. Some occupations tend to attract the worst elements of society.

And those worst elements of society are always going to exist regardless of whether of what economic system it follows. The important thing is to ensure that society is governed by the rule of law so that the sociopaths and psychopaths are constrained in what they can or can’t do. The question is if people in a capitalist society can separate the amoral business of arms-length transactions in order to maximize profit within the framework of the rule of law from the personal aspects of their lives where there are special obligations to be magnanimous and generous. Based on personal observation, I think the answer is yes although it would be interesting to hear post-Marxian arguments to the contrary.

17 Andrew October 7, 2008 at 3:58 am

The real action is in the various definitions of morality. Without the diversity of opinion on morality provided by a free market of ideas, there would be no debate.

18 meter October 7, 2008 at 11:24 am


Since you want to inject a $2/day salary metric, try computing CEO salary vs worker salary ratios with your new worker average and see if you can keep your lunch down.

19 Moore 7309 October 8, 2008 at 1:26 am

It is important to understand the difference between moral means and moral ends. Someone wise once said, “Moral ends consists of human welfare–longevity, health, wealth, pleasure, happiness, a sense of purpose and self-efficacy, the realization of potential, creativity, love, friendship, etc. Moral character, is a means to achieve moral ends.” As the socioeconomic structure constantly changes, the means of achieving moral ends changes as well.

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