Markets and morality

When the ghost of Jacob Marley bemoaned his eternal torment, Scrooge spluttered, “But you were always a good man of business, Jacob.” “Business!” cried the ghost. “Mankind was my business; charity, mercy, forbearance, and benevolence, were, all, my business. The deals of my trade were but a drop of water in the comprehensive ocean of my business!”

I can’t argue with the ghost’s priorities, but too often “business” becomes a bad word. In particular, many believers in social justice dismiss capitalism as the domain of the greedy rich. I can see why people of good will can’t stomach the Scrooges of the world clinging to their riches while the Tiny Tims go hungry. But assuming markets and morality can’t co-exist derails thoughtful debate on the role of government in our lives.

A vote for freedom says nothing about how that freedom should be exercised. Yet we often hear claims that capitalists value riches above the poor. Capitalist thinkers, however, have long made a strong moral case for free markets. Capitalism allows us to pursue happiness and rewards hard work. And the innovation and growth spurred by market economies benefit all, including the poorest among us. Also, as this time of year reminds us, human generosity is real.

However, welfare states can dampen that generosity. For one thing, it’s harder to be generous when the government lays claim to more and more of our income. In fact, a government that decides we can’t be trusted to take care of each other may strangle charitable inclinations. Scrooge, for instance, when asked to give to the poor, retorted that his taxes already go to support welfare institutions that “cost enough; and those who are badly off must go there.” Being forced to give up what is rightfully his transformed any compassion he may have felt into resentment.

Hidden behind the welfare state is a bleak view of human nature. Because of greed, the needs of the poor can only be solved through force. But this cynical picture is combined with faith in the goodness of the bureaucrats who divvy up our wealth. This illogical and dreary mindset, of course, does not account for the economic growth created by self-interest. Nor can government ever force the “charity, mercy, forbearance, and benevolence” lauded by Jacob Marley.

Charles Dickens’ story would hardly be as inspiring if Scrooge showered his wealth upon the poor only because he had to. Instead, the story inspires because it renews faith in the goodness of humanity. If, instead, anyone prefers a tale about what big government can do, I’d recommend 1984.