Saturday, September 4, 2010

More on morality of markets

Earlier this month I blogged in support of Boyes view that the market order embodies morality that not only guides society to greater degrees of well being, but more importantly engenders a sense of liberty and responsibility.

This morality emerges over time in the evolutionary process at the heart of spontaneous order. An important historical example often overlooked in US history in favor of more statist and immoral examples (think Hoover and FDR and the New Deal) was articulated over on Sound Money. Note the ending sentence, I am coming to believe that the emergence and dominance of statism and dirgisme is a result of the focus on efficiency rather than morality by those who advocate liberty and responsibility.

As for the Founders’ supposedly primitive understanding of economics, we will see that their views were remarkably sophisticated and arguably superior to the dominant views of our day. They provide principles and policies by which even the most complex economic order can be governed. And the economic system they established, far from appealing to greed and selfishness and leading to an unjust distribution of wealth, has helped to create the wealthiest nation in human history—a nation in which even those Americans who are classified as poor enjoy prosperity unimaginable to the wealthiest citizens of a few generations ago.

In the Founding era, defenses of property rights proceeded along two main lines: justice and utility. The justice approach treats property as a fundamental right that it would be morally wrong to infringe, regardless of whether it served a useful purpose. The Continental Congress declared in 1774, for example, that “by the immutable laws of nature,” the people “are entitled to…property.” In the Virginia Declaration of Rights (1776), property is an “inherent” right. Massachusetts (1780) called it a right “natural, essential, and unalienable.” Four other states used similar language.[6] Viewed in this way, to deprive someone of his property is to violate a right—to commit an injustice.

Over the past two centuries, writes Greg Forster, “the moral argument for capitalism became less prominent. The case for capitalism was more often made on efficiency grounds alone.” Earlier defenders of property rights—“from Aquinas to Locke to our own time—have successfully availed themselves of both approaches.”

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