Here at Public Discourse, Samuel Gregg graciously notes my exchange in First Things with R.R. Reno (see here, here, and here) about economic freedom, and he observes that neither Reno nor I address what he takes to be a more important question: Leaving aside merely utilitarian considerations such as dramatically rising living standards, what are the principled, moral arguments for economic freedom?
Gregg argues that economic conservatives should base the case for economic freedom on a robust moral account of human fulfillment and that, until they do so, they are unlikely to overcome the common perception that capitalist systems are morally dubious.
Gregg is right that few economic conservatives argue for economic freedom in moral terms, and he is also right that, for many such conservatives, their reluctance to do so stems from the philosophical view that morals are subjective or, at any rate, insufficiently objective to ground the kind of argument that Gregg thinks ought to be made.
I also agree with Gregg that capitalism gets a bad rap because its friends generally argue for it in terms of its material benefits, while its opponents argue against it in moral terms, contending that it encourages greed, promotes inequality, and so on. Moreover, Gregg and I agree about moral philosophy. Like him, I am an Aristotelian-Thomist in morals and think of morality, as he does, in terms of human fulfillment.
But here Gregg and I part company. Gregg wants to show that Aristotelian-Thomistic moral premises about the human good imply the defining ideas of capitalism, such as private property, freedom of contract, and minimal governmental regulation of the market. I am quite sure, however, that no tight connection between morality and capitalism can be shown.
Indeed, it would be extraordinary if the correct moral philosophy implied that the economy should be organized on capitalist lines: It would follow, for example, that every society in the history of the world except for a handful of societies existing in the last few centuries had immoral economic systems. It would follow too that the greatest minds in the Aristotelian-Thomistic tradition, including Aristotle and St. Thomas, had failed to notice the economic immorality of their own societies. Such conclusions are very implausible.
In my view, capitalism is consistent with Aristotelian-Thomistic moral premises, but it is not obligatory given those premises. Indeed, Aristotelian-Thomistic moral theory does not, by itself, tell us much at all about how society should be organized, either politically or economically. In principle, monarchy, aristocracy, and democracy are all morally permissible political systems (which is not to say that every exercise of governmental power in such systems is morally permissible), and capitalism, corporatism, and socialism are all morally permissible economic systems. Aristotelian-Thomistic moral philosophy does not, by itself, imply much about political or economic arrangements.
There is an important reason for this. Aristotelian-Thomistic morality is based on the idea that there is an objective human nature, which implies an objective final end for human beings, so that actions are morally right or wrong depending on whether they are ordered as means to that end. Being based on objective human nature, Aristotelian-Thomistic morals apply to all human beings, wherever and whenever they may be found.
This great generality comes, however, at a cost. For, leaving aside a very few actions that by their nature are incapable of being ordered to the final end of this life—human flourishing—and so are always and everywhere wrong (such as intentionally killing the innocent), all other actions are right or wrong depending on whether, in the actual circumstances in which they are to be performed, they are in fact ordered to the final end.
In some circumstances, such actions will be right; in others, they will be wrong. Intercourse with one’s lawful spouse is right if done in the marital bedroom, wrong if done in church. For most actions, determining whether they are right or wrong requires looking at whether the action conduces to the final end in the actual circumstances.
Given the immense variety of circumstances in which human beings may live, there are very few absolute moral conclusions about how society should be organized. Yes, there are some political or economic arrangements that are incapable of being ordered to the final end—such as a law requiring people to worship idols or, perhaps, a law authorizing a named individual to take the property of anyone he pleases, without paying compensation—but these are extreme outliers. Most political and economic arrangements fall into that large category of actions that may be morally right or wrong depending on the circumstances.
To evaluate them, we have to determine whether, in the actual circumstances of the society in question, its organizing principles are appropriately ordered to the final end for human beings—that is, are they helping human beings lead good lives as far as circumstances allow.
For example, in early medieval Europe, when the collapse of the Roman Empire and extreme and pervasive poverty made governments very weak and societies were regularly exposed to invasions by barbarians commanding superior military forces, organizing society on feudal lines may well have been moral. Feudalism, for all its faults, was likely the best available way to maximize the probability that people could lead good human lives.
Under current conditions in the United States, however, imposing a feudal system would be obviously immoral, for our current arrangements—liberal democratic capitalism—are clearly doing a much better job of allowing a diverse, educated, and peaceful population to lead good human lives than would feudalism. It’s not a question of one system being inherently more or less moral than another; it’s a question of which arrangements are likely to produce the best overall results in the circumstances—where best means most likely to allow people to live good human lives.
This brings us back to Gregg’s demand for a purely moral case for economic freedom. Since capitalist economic arrangements are sometimes right and sometimes wrong depending on the circumstances, we should expect that arguments for economic freedom will turn on the effects of such arrangements on people’s ability to lead good human lives in the circumstances in which such arrangements are adopted.
In other words, the only arguments we can expect to find will be the kind that Gregg dismisses as merely utilitarian. They are not, however, utilitarian in either the philosophical or the colloquial sense. If capitalism improves the lot of the poor—which it most certainly does—then this is just as much a moral argument in favor of capitalism as is the argument that almsgiving is moral since it too improves the lot of the poor. In fact, since capitalism has done much more to help the poor than almsgiving ever has, the moral case for capitalism on this basis is vastly stronger than that for almsgiving.
If I am right about this, then we should expect that any moral argument for capitalism that abstracts from capitalism’s effects on people’s lives will fail. That, I think, is what we find. For example, Gregg says that economic freedom helps human beings participate in moral goods and fulfill their final end: The entrepreneur not only creates a new product or service but also “shapes himself interiorly by engaging his reason and free will in an act of self-determination that allows him to participate in some distinctly human goods (such as creativity and work) that lie at the heart of human fulfillment.”
I agree with that, but exactly the same thing could be said of the central-planning bureaucrat in a socialist system: He too uses his reason and free will to participate in creative work. Of course, entrepreneurs tend to get better results than bureaucrats, but that’s a factual argument of the kind we’ve currently taken off the table.
As a philosophical matter, Gregg’s argument shows not that entrepreneurial activity is essential for human flourishing, but only that it is one way in which human beings can flourish. A form of economic organization that left citizens only minimal opportunities to engage in creative work would make human flourishing very difficult, and for that reason would likely be immoral (only likely, because there could be exigent circumstances, such as war or natural disaster, that required such strictures to preserve the life of the society—again, think of feudalism in medieval Europe). But a form of economic organization that cuts off only one class of such actions—entrepreneurial ones—but leaves many others open (as would socialism, in its democratic form) is not necessarily immoral, at least not on the basis of the argument Gregg gives.
The futility of abstract moral arguments becomes even more apparent when we turn to particular cases. Suppose an entrepreneur develops a drug that cures some form of cancer. He soon finds that his economic freedom is significantly limited by the Food, Drug and Cosmetic Act of 1938, which requires that he seek the approval of the Food and Drug Administration before marketing his product. On the issue of whether the FDA’s procedures are moral, or even whether regulation of drugs in general is moral, it advances the argument not at all to say that, in order to fulfill their final end, human beings need to be able to use their intellects and wills to engage in creative work. True though this is, it does not imply that the entrepreneur gets to market his drug free of all restrictions by government. The moral quality of the regulation in question turns, rather, on its particular costs and benefits. Moral principles do not settle such particular cases.
Gregg is concerned that many people see no moral basis for a capitalist economy. I share that concern. The solution, however, lies not in abstract philosophical arguments. Such arguments do not in fact work, and, even if they did, most people would never understand them anyway. The solution lies in making clear how capitalism creates immense material prosperity—a relatively simple matter well-understood in economics—and then arguing that this prosperity is not merely a material benefit but a moral good, for it frees people, especially the poor, to get on with the more important activities that constitute good lives.
Robert T. Miller is a Professor of Law and the F. Arnold Daum Fellow in Corporate Law at the University of Iowa College of Law.