But before and beyond our arguments about material outcomes, we often neglect the foundations from which these successes flow. In turn, we’d do well to remember what economic freedom actually is and what it’s ultimately for—how it affirms our dignity, unleashes our creativity, and empowers our communities to respond to the various moral crises we face.
In an essay for the Hoover Institution, “The Humane Side of Capitalism,” economist Russell Roberts reminds us of these features, observing that the common critiques against capitalism are often rooted in confusion not about its material blessings but about the social and spiritual nature of the human person and the moral legitimacy of free and open exchange.
“A lot of people reject capitalism because they see the market process at the heart of capitalism—the decentralized, bottom-up interactions between buyers and sellers that determine prices and quantities—as fundamentally immoral,” Roberts writes. “After all, say the critics, capitalism unleashes the worst of our possible motivations, and it gets things done by appealing to greed and self-interest rather than to something nobler: caring for others, say. Or love.”
“Is capitalism good for us?” he goes on to ask. “Does it degrade us or does it lift us up?”
Here, again, advocates of capitalism will be quick to point to the corresponding strides in human progress. But what about its moral logic and the underlying spiritual implications?
Roberts proceeds to examine key aspects of capitalism through this moral lens, asking whether they’re features or bugs—not strictly from the standpoint of fueling “material prosperity” but according to a deeper and broader vision of human freedom and flourishing.
First, he focuses on competition, noting that critics of capitalism often misunderstand market competition as being necessarily zero-sum and dog-eat-dog. To the contrary, through free and voluntary exchange, competition serves a moral purpose by producing a diversity of institutional values and approaches, which in turn leads to a diversity of opportunities and alternatives. This diversity doesn’t just benefit consumers; it protects employees, providing a wider variety of employers to partner with and greater freedom and flexibility when a particular employer isn’t a great fit:
Competition in sports is typically zero sum. The team with the higher score wins and the other team must lose. But economic competition is positive sum. Market share has to sum to 100 percent.…
Competition in a free-market system is about who does the best job serving the customer. Unlike traditional competition, there isn’t a single winner—multiple firms can survive and thrive as long as they match the performance of their competitors. They can also survive and thrive by providing a product that caters to customers looking for something a little different.
As a result, competition yields greater abundance and blessing overall, and not just materially. Competition poses win-win propositions in a variety of areas, yielding progress and diversity in corporate-culture building, institutional ethics and business practices, and overall vocational alignment.
Second, and somewhat relatedly, capitalism promotes cooperation among diverse parties, and in doing so, teaches us and orients our hands to serve one another to the best of our abilities. As it was put in the infamous Keynes-vs.-Hayek rap video (which Roberts wrote): “Give us a chance so we can discover the most valuable way to serve one another.”
While material profit is often a byproduct of these collaborations, when we look at the global economy, we see a far more complex set of human motivations at work. Just as we were made to create, we were made to trade and collaborate and cooperate, both with neighbors and with nature.
When Apple introduced the iPod in 2001, the 10GB model held two thousand songs, the battery lasted ten hours, and its price was $499. By 2007, the best iPod held twenty times that number of songs, the battery lasted three to four times longer, and its price was $299. Apple didn’t improve the quality and lower the price because Steve Jobs was a nice or kind person. Apple improved the iPod because its competitors were, as always, constantly trying to improve their own products. But I don’t think money was the only thing motivating improvement at Apple. Steve Jobs was happy to get rich. But he was also eager to keep his firm afloat in order to employ thousands of people at good wages and to work alongside those workers to create insanely great, ever better products. The money was nice. But it was not all (and maybe hardly at all) about the money.
Taken together, these features orient our hands toward the love and care of others. To succeed in such a system, we must always keep our eyes set on serving our neighbors better and more wisely. Far from merely boosting material welfare, such an order has the potential to strengthen the bonds of a virtuous society, inspiring sacrifice, generosity, trust, patience, friendship, self-governance, and so on.
“The other moral imperative of capitalism comes from repeated interactions between buyers and sellers,” Roberts concludes. “When there are repeated interactions, sellers have an incentive to treat their workers and their customers well—otherwise, they would put future interactions at risk…. In markets, reputation helps ensure honesty and quality. Being decent becomes profitable. Exploitation is punished by future losses.”
In defending economic freedom, we can and should continue to point to the end-game economic realities, but in doing so, we needn’t neglect the connections between freedom and all the rest. We can praise the material abundance of our modern, capitalistic world but in a way that connects with a moral framework for free enterprise and a moral response to the economic challenges of the day.
If we hope to battle the social corrosion of our day and build an economy that is both dynamic and humane, we ought to set our sights where virtue actually begins: in each and every human heart. Economic freedom is but one step on the path to human flourishing, but it’s one we can’t do without.