Comment by barrkel
16 years ago
Something that leaped out at me: "I believe that voluntary exchange is not just a good method of incentivizing people to provide their labor and talents to society, but a robust moral system".
Voluntary exchange is not a moral system. A free market doesn't have morals.
The author of the submitted article may have more sense of history than most Americans. It is a historical fact that Adam Smith first wrote a book The Theory of Moral Sentiments
http://en.wikipedia.org/wiki/The_Theory_of_Moral_Sentiments
in 1759, pondering the issue of why people behave morally when they could simply guard their own self-interest. As Smith pondered the issue more, he wrote An Inquiry into the Nature and Causes of the Wealth of Nations
http://en.wikipedia.org/wiki/The_Wealth_of_Nations
in which he discussed how free-market trade provides incentives to moral behavior. EVERYONE who is well educated should recognize this quotation:
"But man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour, and shew them that it is for their own advantage to do for him what he requires of them. Whoever offers to another a bargain of any kind, proposes to do this. Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of. It is not from the benevolence of the butcher the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity, but to their self-love, and never talk to them of our own necessities, but of their advantages."
In other words, society can be structured so that people will help you or other people who need help while looking out for number 1.
Hayek
http://en.wikipedia.org/wiki/Friedrich_von_Hayek
is good author on contrasting economic systems, showing how they can be actively immoral.
Smith's overall conclusion on the relation between morality and free markets is a bit more mixed than that of someone like Hayek, though. He does say things like the excerpt you quote quite frequently, but he also has a number of comments lamenting the immoral behavior that profit motives cause, like an encouragement to fraud and collusion. He does worry that some attempts to solve the problem would be worse cures than the disease, but he doesn't think that no problem exists, or that self-interest always produces moral outcomes, or that government regulation to mitigate the immoral effects of self-interest is always wrong.
His policy proposals on that latter point are pretty pragmatic, and he endorses regulation when he thinks it has relatively large gains for relatively small downsides. For example, he proposes that the government ought to require employers to pay their employees in hard money, and not permit them to pay in promissory notes or in goods. His reasoning is that this prevents unscrupulous employers from tricking employees, either by paying them in goods whose value has been misrepresented, or by convincing them to work for promises of payment that the employer doesn't really intend to keep.
You have completely missed the point. Contrasting economic systems is completely irrelevant.
The choice here is not between different economic systems, but between different moral systems.
You cannot make a free market your moral system because markets are amoral. That is, it is not that they are not immoral and so should be replaced with something else; rather, they have no moral content - morality comes from somewhere else.
You can pay someone to punch a third party in the nose. You get the value of knowing that someone is going to get hurt. The other guy gets your money. The transaction, in the free market, by itself has no moral content, though. A free market just means exchanging value for mutual gain. It doesn't say that those values have positive or negative moral worth.
False distinction. The GP is saying that economic systems are moral systems. He even says why, and cites examples.
He didn't miss your point. He saw your point, and thinks it's wrong.
Your use of "moral content" is entirely ambiguous, because that content will vary depending on which moral system you refer. And since a market is essentially an amalgamation of individuals (whom likely have or are capable of inducing moral content through their actions and desires), it is likely that a market has a great deal of moral content regardless of which system you pick.
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Do not confuse capitalism with anarchism.
Capitalism believes in a government which protects private property and human life with physical force. You can pay someone to punch someone else, but that's inconsistent with capitalistic philosophy.
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You are completely incorrect, the free market is a moral system because it does not rely on coercion or force to compel others to interact. All interactions in a free market system are voluntary and beneficial to all participants in the transaction. No other economic system can make those claims.
Firstly, 'The free market' can never be 'a moral system'. The first term refers to a system of trading, where goods and services are interchanged and relative monetary values are established. The second refers to sets of principles, reasons and motives for doing certain things. The first is at most a subset of the second, but that is only the case if you amend it with a philosophy that equates monetary value to moral value.
Secondly, your view of free markets is naive. Lack of transparency and the problem of monopolies are only a few of the many problems that completely free markets suffer from. We have an FTC, because markets need to be regulated. Leaving them completely free leads to morally unacceptable results.
It can be beneficial to all "participants" but disastrous to society as a whole, can it not? Look at the current rage against free market instruments like CDOs and other complex unregulated derivatives.
Are you really claiming we dont need "coercion or force" from regulators like the SEC or FTC?
Are you really claiming we dont need "coercion or force" from regulators like the SEC or FTC?
It is naive to think any one human agents or regulatory agency is able to prevent those "complex unregulated derivatives" or not be corrupted by unethical firms/special interests/etc.
The free market system already have a "fail-safe" or "regulatory" function through the bankruptcy of entrepreneurs and rewarding prudent entrepreneurs with the leftover possessions of the bankrupt one. Failure is at the heart of the free market enterprise system. It is a feature, not a bug.
It is those who wishes to prevent these failures at all and any costs that keep our society stagnated or hurling down to its destruction as they keep funding economic activities that is out of reality with human needs and desire.
Wow... taking @dantheman's statements a bit too literally maybe? There are very, very few free market proponents who would be in favor a pure free market. Just about everyone agrees that some degree of regulation is necessary (or else paying for a murder would be a proper free market transaction).
People can be coerced by their circumstances; but that's beside the point.
You can hire someone to murder someone else. Nothing wrong with that transaction in a free market. Similarly, you can be a credit card processor for child pornography - you take your cut, but since you don't do the deed, it's not your problem.
Do you see the problem?
(Hint: morality isn't emerging here. It comes from somewhere else.)
And I have no idea why you mentioned some "other economic system". I didn't. Why? Because I wasn't contrasting economic systems. I was contrasting moral systems.
He explains his reasoning in the next sentences.
True.
But some moral systems are consequentialistic [1] and for its proponents, the means are justified by the ends. A free market could be seen as a means to reach the moral end. Thus, they are often mixed up.
[1]: http://en.wikipedia.org/wiki/Consequentialist
I suspect (some) people misunderstood what I was trying to say.
I wasn't trying to say that I thought free markets were immoral, or that they were not moral. (And so we should find a different economic system, or something).
I was trying to say that you cannot replace your personal morality, your moral system, with a free market (whatever that even means). That is, I was trying to say that markets were amoral, without moral content.
I think some of it comes from confounding a moral system (i.e. a system for evaluating the morality of an action) with a system which acts in a morally correct manner.