Freedom and Economic Order

by Linda C Raeder

  Indeed, Marxists and fellow travelers regard the great disparity of wealth produced by putative capitalist exploitation as not only intrinsically wrong but the very height of injustice. The intrinsic evil of material inequality follows from the distinctive definition of right and wrong implicit in Marxist thought. Marxism involves a revolution not only in economic organization but also morality, in particular, its redefinition along materialist and consequentialist lines. The radical materialism of Marxism involves the attribution of causality to material factors and reduction of human experience to exclusively immanent or intra-worldly dimensions. The consequentialism of Marxist moral constructs involves the attribution of good and evil, right and wrong, not to individual action-in-itself but rather the results or consequences of human action. The conjunction of radical materialism and moral consequentialism leads to a redefinition of good or right as that which results in a relatively equal distribution of material resources, evil or wrong as that which results in an unequal or widely disparate distribution of such resources. Communism and other forms of collectivist economic organization that aim result in a greater equalization of wealth are therefore good; capitalism, which results in an unequal distribution of wealth, is therefore evil. The validity of such judgments will be further examined in a following chapter.

  The Marxist moral vision may further be characterized as a variant of the so-called “politics of projection” widely associated with certain influential forms of modern political ideology.[63] Western civilization traditionally conceives the battle between good and evil as occurring not in the external social or economic order but rather within the individual human breast. Good and evil are traditionally regarded as attributes of individual intention and action, not attributes of the abstract order of society as a whole. Such reflects the moral realism characteristic of traditional Judeo-Christian ethics. As has been discussed, moral realism involves the recognition that only human beings bear moral agency; a social or economic order is not a conscious, thinking, willing entity capable of intention or action, moral or immoral. Over the course of modernity, however, various philosophies have emerged that project the battleground between good and evil from the interiority of individual conscience onto the external social order, especially its political and economic dimensions. The source of evil is typically linked not to individual choice and action but rather a particular political or economic system. Jean-Jacque Rousseau (1712-1778), the eighteenth-century writer who profoundly influenced French thought in the decades preceding the French Revolution, pointedly expressed the leading idea: “. . . [M]an is naturally good . . . it is by their institutions alone that men become wicked.”[64] Rousseau, however, was not the only modern thinker to engage in psychological projection of this nature. Marx and his descendants similarly regard evil as an attribute of the overarching social order and not the individual. Insofar as man “becomes bad” by virtue of existing “institutions,” the eradication of evil requires the eradication of such institutions, including the economic, political, and legal institutions comprised by liberal-capitalist order.

  Selfishness, Greed, Materialism

  We previously observed that the widespread if implicit embrace of the socialist vision in modern society stems in large part from the conviction that socialism embodies a morality superior to that of capitalism. The essence of the socialist ideal is greater equalization of material wealth among members of society. Such a goal is portrayed as an unequivocal moral advance over the individualism and alleged selfishness of both capitalism and the traditional Judeo-Christian ethics implicit in its operation. Marxists and fellow travelers subject capitalism to intense and unremitting moral criticism. As discussed, it is depicted as intrinsically evil and radically unjust, a system in which the “rich get richer and the poor get poorer.” Capitalism is said to benefit only the privileged few, the capitalists; the vast majority, the workers, are exploited and oppressed. It is further charged with promoting vulgar greed, selfishness, and materialism, fostering a society whose members care for little more than mere accumulation of personal possessions. Advertisers and marketing experts are said to encourage a “false consciousness,” persuading the people, among other untruths, that material possessions will lead to happiness. Not only are higher, nonmaterial, values neglected or despised but the impersonal “cash nexus” of the market demeans the value of human being. Human personality counts for nothing to capitalist employers, whose only concern is the hard “bottom line”—increasing their profits. Nor is individual personhood valued by buyers in the marketplace, whose only concern is to pay as little as possible for producers’ wares. Human beings in a capitalist economy are dehumanized, treated as replaceable cogs in the grinding wheel of “buy and sell.” Indeed, as we have seen, Marx maintains that the very essence of human being—man’s species being—is systematically violated by capitalist relations of production.

  Economic socialization will rectify all such evils. Communist relations of production will establish a more just society concerned with the good of all its members, not merely the dominant class of capitalists. Socialized economic organization will not only achieve justice but also diminish and perhaps eliminate the greed, selfishness, and materialism wrought by capitalism. It will do so by removing the cause of all such evils at their very root, namely, the institution of private property that gives rise to the nefarious motive of profit. Moreover, the dehumanizing impersonalism of competitive capitalist economic relations will be replaced by a system of social cooperation that permits each individual the full realization of human nature. Socialist men, unlike their capitalist counterparts, will care for one another: “From each according to his ability, to each according to his need.” Selfishness, materialism, and possessiveness will eventually recede from human experience as new socialist relations of production transform human values and beliefs.[65] Class status itself will disappear, as will the class struggle that has heretofore plagued every society in human history. Every person will be equally valued, the needy and poor, the sick and homeless, as well as the productive and the strong. All members of society will be sustained by the collective efforts of the whole. No person will live in want; every human being can realize his potential. History itself has been aiming for such a glorious and inevitable end—the establishment of a truly just society—throughout the long and tortuous experience of humanity in time.

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  Few people dispute the fact that capitalism produces a material prosperity unparalleled in human history. From the perspective of morality, however, such material success does not decisively establish the superiority of capitalist economic relations. If capitalist prosperity can only be achieved by the institutionalization of immorality, greed, selfishness, and injustice, by dehumanization and violation of human nature, capitalism must of course be rejected despite its proven material benefits. For such reasons, the morality of the market order must be scrutinized and appraised, as must the competing morality and moral claims of socialism and other forms of economic centralization.

  The typical moral charges leveled against capitalism, as we have seen, include selfishness, greed, materialism, callous indifference to human welfare, and injustice. We begin with selfishness, previously touched upon in discussing Smith’s metaphor of the “Invisible Hand.” We observed in that context the irony of the modern criticism of the market as inducing selfishness, a view in contradiction to that of Smith and other classical economists. Early proponents of the market economy lauded capitalism precisely for its propensity to mitigate, not encourage, the moral flaw of selfishness. It does so, as we recall, by institutionally and spontaneously channeling self-interested and even selfish desires into actions beneficial to other human beings. Such follows from the fact that the material goals of any individual, whether selfish or altruistic, can only be realized in a market economy by serving other people, the consumers. A selfish monster who greedily aims to amass wealth merely to gratify his own pleasure must, at least for a time, set aside his ow
n desires and consider the needs and desires of others. There is no other way to achieve financial success, and thus obtain the means necessary to gratify personal or selfish desires, in a capitalist economy.

  The market’s propensity to mitigate selfishness in this manner may be further elucidated by a concrete illustration. To that end, imagine the existence of two hypothetical groups of people in a society ordered by market exchange, whom we shall call the “selfish” and the “selfless.” The first group is composed of narcissists and sociopaths, persons so consumed with unspeakable selfishness as to never consider anything beyond their personal gratification. The second group represents the moral opposite, a group, one might say, composed of Mother Teresa’s. Such individuals are genuinely selfless, caring nothing for themselves but only the welfare of others; their consuming life-purpose is to relieve human suffering to the extent of their ability. We assume that members of the disparate groups live one among the other in a free society ordered by market exchange and satisfying its preconditions (private property, the rule of law, and mutual trust). The government is classically liberal, limited and concerned with securing to every individual his natural rights to life, liberty, and property. There is neither a governmental “safety net” that secures to individuals the necessities of life nor corporate welfare that subsidizes business with taxpayer funds.

  Our interest concerns the manner in which the constituent members of the two opposing groups, the selfish and the selfless, can achieve their widely divergent goals in a free society so conceived. The selfish egoists aim only to gratify themselves; the altruists aim only to alleviate suffering in this world. How may such opposing goals be realized? The first point to emphasize is that members of both groups require material goods and services to achieve their goals. The selfish materialists need gold or automobiles or mansions or whatever—the more the better—to gratify their desires. The selfless altruists have no desire for such goods; they care nothing for their own material well-being. These too, however, require material goods, although of a very different kind: they need food and clothing, medicine and housing, and all the complementary goods required to relieve human suffering. However angelic the selfless servants, such material goods do not fall from clouds.

  The second point, indeed the crucial point, is that members of the two groups, despite their radically different goals, must, in a capitalist economy, employ identical means to achieve them. A market economy, as we recall, provides one way, and only one way, to acquire income or wealth, which of course is necessary for the acquisition of any material good or service.[66] Both the selfish and the selfless must generate the income needed to obtain the material goods essential to fulfilling their respective goals, whether luxury automobiles or medicine for a sick child. As we have seen, the only means by which this can be accomplished in a market economy is by producing a good or service that other persons, customers or consumers, will voluntarily purchase.

  We recall in this context that economic theory does not address the ends or goals that people should value, whether these should be selfish or selfless. “Economics is a science of means, not of ends”; it is neutral with respect to the substantive content of human ends and discloses only the means necessary to realize them. An individual’s values or purposes are not determined by the economic arrangements of a society but rather by his character, shaped by his philosophy, religion, and beliefs—his worldview. A spiritual or morally sensitive person may share the values of Mother Teresa; insensitive and vulgar brutes will pursue values of quite another sort. Whatever an individual’s personal values, however, the only way to realize them in a society ordered by market exchange is to obtain the means (income) required to do so by producing a good or service subjectively valued by other people. The vulgar brutes can only gratify their selfish desire for material possessions by first producing something that other people will voluntarily purchase from them, and to do so they must consider the needs and desires of other people. The brutes can then use any profits so gained to acquire self-gratifying possessions (or perhaps spend their evenings counting their gold). The Mother Teresa’s of this world can only obtain the funds they need to alleviate suffering in the same manner; they too, like the brutes, must produce some good or service that other people will voluntarily purchase. They can then use any profits so gained not to gratify themselves but rather to help those in need, to buy and provide food, medicine, and so on.

  Selfless altruists do have the further option of soliciting donations for their humanitarian mission (“charitable contributions”) and using such contributions in turn to purchase the goods they distribute to those in need. This latter method, however, does not change the nature of things. Those persons who donate to charity must first obtain the resources to do so, and this, again, can only be achieved by producing something of value to other people. In a capitalist economy the dramatically opposing ends of the selfish and the selfless must be realized by identical means. The divergent ends of the respective groups are not determined by the economic system but rather chosen by the individuals themselves. Capitalism no more forces selfishness than selflessness upon individuals; it no more produces the selfish monster than the Mother Teresa. Capitalism, contrary to its critics, cannot be blamed for human selfishness.

  It is as false to blame capitalism for materialism and greed as for human selfishness. There is nothing intrinsic to a market economy that compels people to be materialistic, greedy, or selfish. Such vices are potentialities of human nature wherever and whenever found, personal values informed by extra-economic factors and prevalent in every society and every form of economic organization known to man. Indeed, capitalism may serve to mitigate not only selfishness but greedy materialism as well. Individuals fortunate enough to live in a prosperous capitalist economy have the added luxury of potentially raising their sights beyond materialistic concerns and pursuing values higher than material satisfaction. The prerequisite for such moral and cultural advance—the prior satisfaction of fundamental material needs—is far more likely to be realized in a capitalist order than any form of socialized economy. Capitalism, as repeatedly noted, not only facilitates satisfaction of material needs but has produced the highest standard of living for the largest number of people in the course of human history. Such material prosperity, in turn, has created conditions conducive to cultural development and pursuit of spiritual, intellectual, and artistic values.

  Moreover, an individual can live quite well on relatively limited income in a market-based society, if content with basic necessities. It is true that writers, painters, musicians, and other creative individuals may fail to find a wide market for their art in a capitalist economy, but such is a more or less inevitable outcome of a system tailored to satisfy consumer tastes and values. The tastes of the masses are generally more pedestrian than avant-garde. Those artists, however, who decide that pursuit of their art is of greater importance than personal development of more marketable skills can nevertheless live comfortably if not luxuriously in a competitive market order, which tends to drive costs of living to a minimum. Moreover, wealthy individuals in capitalist society often employ their wealth not solely for personal gratification but also to help others, including starving artists. Philanthropic or charitable giving in the United States has traditionally played an important role in American society.[67] Americans are among the most generous people on earth by any objective measure of philanthropic activity, a fact no doubt related not only to their spiritual heritage but also the material success of a capitalist economy.

  Both theory and history demonstrate that a centrally organized economy cannot provide a standard of living for the masses equal to that achieved by capitalism, a fact clearly relevant to issues of materialism and greed. Persons who are chronically dependent on political power, and not their own efforts, for the satisfaction of their most basic needs must live in a perpetual state of economic insecurity that readily encourages preoccupation with material concerns. It is difficult to study Shake
speare if one is hungry; it is difficult to care about the starving children in India if one’s own children are starving. Consider the experience of Communist China in the 1960s under the totalitarian dictator Mao Tse-tung. The communist government devised and implemented widespread centralized economic planning, including a plan for rice production; individual production was outlawed. The failure of the central plan resulted in death through starvation for millions upon millions of Chinese people, who were utterly dependent on government-provided rice for their survival.[68] Moreover, governments that exercise command-and-control over basic resources are tempted to employ such power to suppress resistance to their rule, as occurred in the Ukraine under Josef Stalin; it is estimated that 35 million Ukrainians starved to death as a result of the forced imposition of collectivized agriculture. [69] The tragic experience of the people of communist North Korea further demonstrates the devastating consequences of centralized economic control. The infamous North Korean famine of 1994-1998 resulted in death from starvation or hunger-related illnesses of somewhere between 240,000 and 3,500,000 North Koreans, from a total population of approximately 22 million people.[70] In 2011 it was anticipated that one to six million North Koreans would starve in the following year if international aid were not forthcoming.[71] In every instance, the implementation of a centralized command-and-control economy has been disastrous for the people at large. Such systems readily reduce human existence to a sheer struggle for material survival, which obviously must take precedence over preoccupation with “higher” values. For such reasons, a centrally organized economy is far more conducive to engendering materialism than its capitalist counterpart, and understandably so. Indeed, as previously observed, communism and related constructs are fundamentally materialist ideologies. Marx named his philosophy of history dialectical materialism and implicitly defined morality in material terms. There is simply no basis for the charge that individuals who order their affairs by market exchange are more materialistic than their counterparts in a centralized or socialized economy. Indeed the opposite may be closer to the truth.