By Yuval Levin
Thursday, May 02, 2019
We live in an era of collapsing confidence in
institutions, and the market economy has been no exception. Polls show
declining support for capitalism, especially among the young. And the market
system is increasingly under attack not only from the left but from some smart
social conservatives, populists, and nationalists on the right. To effectively
defend democratic capitalism, its champions will need to understand the nature
of these criticisms, to see where they have a point, and to think about how to
make a case for markets that takes them seriously.
Not all the contemporary critics of capitalism are all
that serious, of course, just as not all its defenders are. But those who voice
the deepest grievances have in common some complaints that should not be
ignored.
For the most part, these complaints are not fundamentally
economic but rather are moral. This sometimes is not obvious even to the people
lodging them. But arguments about inequalities of wealth or power, cronyism and
special-interest influence, a shallow consumerism that corrupts the soul and
undermines the dignity of work, a stateless cosmopolitanism that neglects national
priorities, and a commitment to creative destruction over protective
preservation are arguments about the ends of capitalism at least as much as its
means. They accuse our society of a failure to prioritize the highest things,
and so they charge us with moral failings embodied in a corrupt political
economy.
This means, for one thing, that evidence of capitalism’s
ability to produce prosperity will be of limited use in response. It is
important to make people aware that the market system has brought billions out
of grinding poverty and continues to do so still. This is essential to the
moral case for capitalism and is an answer to the shallowest charges against
it. But if the market were in fact, as some of its critics suggest, a great
machine for replacing material poverty with moral poverty, then evidence of its
success in reducing deprivation would not be proof against the charge that it
produces depravity. Similarly, evidence of economic growth is not an answer to
the charge that overall prosperity comes at costs to some particular Americans
that should be unacceptable to all of us.
The case for markets as engines of liberty is crucial to
the defense of capitalism too, but in a similarly constrained way. The right to
property is especially vital to human dignity, and no society could be just
while violating it or trampling our other liberties. But modern capitalism may
not be the only way to respect these rights and liberties, so evidence of the
various ways that markets promote and undermine the dignity of persons would
have to influence our judgments about when to defend markets and when to
criticize them.
The deepest challenges to capitalism therefore have to be
answered on the grounds of morality. If, as Irving Kristol once asserted, the
market economy promises us wealth, freedom, and a just society, it is the third
of these promises that the system’s most serious critics insist it is failing
to keep. And a sense that our way of life is in some key respects unjust is
behind much of our broader loss of faith in institutions too.
Part of a moral defense of the market system would have
to shed light on its moral goals and premises. These are not hard to discern,
for instance, in the thought of capitalism’s intellectual progenitors. Adam
Smith was a professor of moral philosophy, and his project sought to ground a
modern successor to Aristotelian ethics in a sophisticated sense of human
sympathy and sociability. In a free society, Smith suggested, men and women
cannot be compelled to act morally, so we require institutions that form our
characters and dispositions so that we might choose to act morally. The market is one such institution. Through
the division of labor, it enables essentially every person to approach the
larger society on the basis of what he can offer rather than just what he
needs, reinforcing his dignity. And by valuing reliability, honesty, civility,
discipline, and similar bourgeois virtues, markets give us the habits required
to handle an enormous amount of freedom responsibly. Because they prioritize
the needs of consumers, rather than just those of the owners of capital,
markets are also powerfully democratizing forces. And because they are so very
good at making us productive and rich, they help the poor to rise as well.
That markets can be perverted by cronyism, corruption,
self-dealing, and the capture of regulators is not an argument against them.
Every system can be so perverted — decidedly including all the modern
alternatives to capitalism that the human race has tried. Societies with market
economies should do what they can to minimize such corruption and to avoid the
circumstances that invite it, but that is more an argument against Medicare for
All than a case against capitalism.
And yet, these virtues of the market system alone do not
suffice as an answer. Capitalism is most vulnerable to moral critiques because
it rests upon a moral foundation that it can also undermine. It requires — for
its workers, employers, owners, and investors — a kind of human being that it does
not by itself produce and can easily corrupt. Left to itself, it would tend to
prioritize consumption over every other human endeavor and profit over every
other standard of the good, and so could badly distort our priorities. If our
politics and culture were merely extensions of the market system — if market
signals were our primary measures of merit, virtue, decency, freedom,
responsibility, and worth — then ours would indeed be an unjust society.
But our politics and culture are much more than that. The
best case for capitalism is a case for markets as one crucial set of
institutions in a free society deeply rooted in the West’s liberal and
pre-liberal soil. It is crucial because at its best it protects every man’s
right to the fruits of his labor, encourages virtues crucial to living free,
and has proven unbeatably capable of improving everyone’s living standards. But
it must remain rooted, because man does not live by bread alone, and because
both the market and the larger society depend upon other formative institutions
that help us all become better human beings and citizens.
These other institutions — the family, religion, schools,
civic associations, political bodies, and more — teach and habituate us in ways
that encourage distinct virtues of their own. They all have their excesses, to
be sure. But they also often work to keep one another in check. Their tensions
with the ethos of the market do the same. Communal and national loyalties can
make for inefficient economics, and obligations to tithe or observe the Sabbath
aren’t always great for business. But commitments such as these can help us see
that our communities aren’t just random collections of labor and capital, our
nation isn’t just another place to work or invest in, raising children isn’t
one consumer preference among many, and business isn’t everything.
Critics of the market should be willing to acknowledge
that it is made better by these countervailing yet supportive institutions
throughout our society. But defenders of the market therefore have to make
themselves defenders of these other institutions too, and of the social order
of which they are all part. The market can advance the cause not only of
prosperity but of justice only if it is embedded in this larger whole.
Seeing the virtues of markets in their embeddedness in
our larger social order can also help avoid the kinds of utopian arguments for
markets that some of their more libertarian defenders sometimes make. The case
for markets is a case for humility before the immense complexity of social
life. It begins from our ignorance, and properly understood it should steer us
away from overconfidence.
The tensions that arise among the demands of these
different institutions and the commitments that constitute our social order can
often be addressed by individuals setting priorities in their own lives. But
there are also instances when dealing with such tensions requires politics.
This means that sometimes our economic policy has to be determined by more than
purely economic considerations — by our sense of the kind of society we want to
be and the kinds of goals we want to pursue together. Overall economic growth
is one such vital goal, as surely everyone agrees. But there are other goals
that matter, including equity, cultural vitality, social order, family
formation, piety and religious liberty, individual and national
self-sufficiency, personal liberty and communal self-determination, and moral
traditionalism and moral pluralism, among many others. Ordering these
frequently competing or contradictory ends in hard cases is part of what our
politics is for, and the argument for capitalism cannot be an argument for
putting economics above all else.
To suggest that our commitments to market ideals must be
moderated in this way, and also that they should be allowed to moderate some of
our other commitments, is not to attack capitalism but to defend it. It is to
grasp its full significance, its place in the larger scheme of our free
society. Indeed, the same is true of liberalism itself: To show how its
strengths can invigorate us while its weaknesses must be mitigated by our other
fidelities is to show how liberalism can succeed, not why liberalism failed.
Against its most serious and able critics, then, the
market needs defenders who see it as one among the several crucial institutions
most indigenous to liberalism, and who acknowledge that, like all the others,
it draws on our society’s deep roots in pre-liberal traditions and can thrive
only as long as it does not twist or sever those. In other words, capitalism
needs conservative defenders, and deserves to have them.
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