Economy and Virtue PDF
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Economy and Virtue Economy and Virtue Essays on the Theme of Markets and Morality edited by dennis o’keeffe foreword by david willetts The Institute of Economic Affairs First published in Great Britain in 2004 by The Institute of Economic Affairs 2 Lord North Street Westminster London sw1p 3lb in association with Profi le Books Ltd ‘The Argument for Free Markets’ by Walter E. Williams reprinted by permission of the Cato Institute ‘Character, Liberty and Social Structure’ by David Marsland reprinted by courtesty of Society All other material and this collection copyright © The Institute of Economic Affairs 2004 The moral right of the authors has been asserted. All rights reserved. Without limiting the rights under copyright reserved above, no part of this publication may be reproduced, stored or introduced into a retrieval system, or transmitted, in any form or by any means (electronic, mechanical, photocopying, recording or otherwise), without the prior written permission of both the copyright owner and the publisher of this book. A CIP catalogue record for this book is available from the British Library. isbn 0 255 36504 7 Many IEA publications are translated into languages other than English or are reprinted. Permission to translate or to reprint should be sought from the Director General at the address above. Typeset in Stone by MacGuru Ltd [email protected] Printed and bound in Great Britain by Hobbs the Printers CONTENTS The authors 11 Foreword by David Willetts 16 Acknowledgements 20 Summary 21 1 Introduction 25 Dennis O’Keeffe 2 The argument for free markets: morality versus effi ciency 34 Walter E. Williams Introduction: freedom, sacrosanct persons and property 34 Widespread consensus that governments must not sponsor murder does not obtain vis-à-vis government- sponsored theft 35 Even in free societies like the USA the values of freedom have today been in some degree eroded 36 It is basic values which bring economic effi ciency and wealth, and not vice versa 36 Informal institutions are crucially important 37 Institutions and wealth 38 Natural resources and population size are not defi nitive in the development of wealth 39 The intellectual defence of liberty demands a moral rather than an economic argument 40 Demystifi cation of the state 41 Victims of wrong policy, visible and invisible 42 Opponents of government interventionism must be made visible 43 Justice concerns processes, not results 46 In a free society income is earned through the provision of goods and services 47 The vision of black markets 50 Conclusion 51 3 The morality of markets: taxation as a Prisoner’s Dilemma 52 Christopher Badcock Introduction 52 Axelrod’s computer games of iterated Prisoner’s Dilemma 56 The question of taxation resembles a Prisoner’s Dilemma 61 Every social relationship is a Prisoner’s Dilemma and mutual cooperation is the logic of the market 66 4 Selfi shness, exploitation and the profi t motive 68 Antony Flew Immoral capitalism: from Tawney to Ramsay MacDonald to Einstein to Plant 68 Interested actions are not necessarily selfi sh 73 Aristotle’s critique of profi t 74 Aristotle’s errors on usury: unless people cease to wish to purchase goods and services, abolishing money will not make them less mercenary 79 The fi nal, fatal fl aw in the critique of market greed 84 5 Economic science and the morality of capitalism 88 Israel M. Kirzner Introduction 88 People think we have to tolerate immorality in order to enjoy the advantages of capitalism 90 In at least one sense capitalism is ethically neutral 95 Why it is wrong to link free markets with greed: a summary 97 6 Character, liberty and social structure 101 David Marsland Introduction 101 Freedom and personal autonomy are core conditions of full and genuine morality 102 The rule of law and limited government are crucial to moral development 104 Ultra-socialist enemies of virtue 107 Pseudo-moralistic campaigning against the market 113 Socialism or virtue? 114 7 Below the angels: morality and capitalism 116 Arthur Shenfi eld Introduction 116 Four allegations against capitalism 116 Inequality 118 Greed and selfi shness are not externally distinguishable in market behaviour from altruism 122 In fact capitalism and the care for the poor and unfortunate rose in tandem 123 Bourgeois, aristocratic and working-class virtues 128 The positive case for the morality of the free economy: property and moral training 128 Forward to capitalism 137 8 Individual responsibility and competence 138 Peter King Introduction 138 The structural thesis and the growth of welfare 138 Murray’s attack on the removal of responsibility 140 The wisdom of assuming that individuals are competent and responsible 141 The aim is not censoriousness but the call to responsibility 143 Communitarianism 144 Individualist responsibility 145 9 Markets, the Internet and morality 147 Sean Gabb Introduction 147 What is the Internet? 147 The Internet and the moral order 149 An indirect source of moral improvement: the attenuation of market imperfection 150 The morality of non-economic choice 155 The Internet as a moral force in the public sphere 156 The media reborn 158 A closing note in troubled times 160 Summary 160 10 Capitalism and corruption: the anatomy of a myth 161 Dennis O’Keeffe Introduction 161 Positive and normative economic theory 163 Marxist theory and practice have had disastrous effects 167 Anti-capitalists today do not seek to replace the whole market economy 168 These moral critiques are not theorised in market terms, merely alleged 169 A developed economy permits most people to pursue economic advantage 172 Are markets morally neutral? 175 Why we need markets 178 Capitalism and peace 179 A brief religious note 181 About the IEA 184
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