The morality of capitalism

What your professors won't tell you is the subtitle to Tom Palmer's new book The Morality of Capitalism (Jameson Books 2011). Tom – who travels the world beating the drum for liberty – has assembled a powerful team of contributors, including two Nobel laureates and the founder of Whole Foods Market. Though the authors obviously don't have a consistent style – some very academic, some didactic, others very personal in their approach – you can still strain out a huge number of interesting arguments and points about the morality of markets that you won't see in common circulation and certainly won't hear from your professors.

Cato's David Boaz, for example, points out that human beings are social creatures and the like to associate and collaborate. Sure, they are self-interested, but they wold be self-interested under any system, not just capitalism. The virtue of free-market capitalism is that people can only make themselves better off by helping others.

The Chinese economist Mao Yushi takes that further with an interesting paradox. If we were all completely benevolent – looking out for the interests of other people rather than ourselves – we would have just as much conflict as capitalism is said to give us. We would be fighting shopkeepers to charge us more and reduce their quality. The arguments would be just as red in tooth and claw, but the incentives would all be to reduce value rather than to create and increase it, as capitalism does.

Tom Palmer himself provides a heartfelt story of when he was in severe pain, but was treated with huge courtesy, kindness, and human decency in a private hospital. That contrasted mightily with his subsequent treatment in a public hospital, where he was bossed about and treated like a lump of meat. You can't raise or lower people's natural feelings of humanity by force, he concludes, but you can certainly prompt them to show their humanity – or inhumanity – by your choice of incentives. In one setting, Tom was a valued customer; in the other, a necessary inconvenience.

Palmer also has a chapter on Adam Smith, pointing out that the Sage of Kirkcaldy is too often caricatured as saying that 'greed is good'. It is plain from his writings, though, that he believed no such thing. Self-interest has its place, but there are limits to this as there must be to every human characteristics. Seeking wealth by helping other people, which is the essence of the market, is just fine, though. The desire to accumulate money is entirely benign if you want it to feed, and clothe your family or to spend for the public benefit. The more money that philanthropists have, the more philanthropy they can deliver: why do people think then, that the pursuit of money is immoral?

There are 101 more insights like this in the book. Congratulations to and for doing it.