Morality and Markets

Pratt notes the moral argument in economics. I continue to wonder why it isn't obvious that economics is based on morality. The free market system founded on private property rights and non agression captures the kernel of what all ethical systems advocate.

The mixed economy, where actions occur because of coercion from government, is immoral. Under free market capitalism, the initiation of physical force is barred from human relationships. Citizens may voluntarily delegate the use of retaliatory force to an organization or government, but that government may use force only in retaliation and only against those who initiate its use.

Government regulation, by contrast, coerces behavior. It subordinates the businessman's judgment to the decrees of government officials, who impose their will by physical force.

So why teach business ethics as if morality were anything other than free market capitalism? Just teach what is required for free markets and capitalism to exist and endure and you have taught a moral system and ethical behavior. Wait a moment, however. What if consumers or workers do not demand the morally proper thing. For example, consumers might prefer a cheaper car without air bags,”… even though doing so places their own lives and the lives of their passengers at greater risk, which is morally irresponsible. Similarly, workers may forego demands of privacy at work if they are compensated with high enough wages. In short, not every moral business practice will simply emerge from the profit.”

This argument presumes to define which of the consumer’s expenditures is moral and which is immoral. This argument is immoral because it gives someone control over someone else’s choices.

Choices are moral as long as the principles of private property rights and non aggression apply. If I choose to purchase a less safe car, it is my choice. If passengers know the car is less safe, their decision to ride in it is their choice. If consumers demand lower quality autos at lower prices this must mean they believe the lower quality autos make them better off than the higher quality because they can use the saved money in other ways. Perhaps they will save more lives purchasing something other than the high quality car. We may not like some people’s decisions, some may use their freedom to act in self-destructive ways, and we may define some actions to be illegal. But, as long as they do not violate the rights of others, they are moral. They may not be legal, but are moral.