Por Samuel Gregg
Fuente: NR | Capital Matters
7 de agosto de 2022
Conservative arguments for markets can’t be limited to technical economics.
If there is one thing that I have learned from several years of arguing the conservative case for free markets against the many conservatives who have embraced highly activist views of the government’s economic role, it’s this: Winning the economic argument is not enough.
By this, I don’t mean that the economic case against protectionism, industrial policy, wage-supplements for families, or proposals to put workers (invariably, union officials) on company boards is unimportant. It is, in fact, essential if the faulty logic, bad economics, and even-worse history underlining these ideas are to be understood by the significant number of young conservatives tempted to embrace a conservative version of state capitalism.
I have discovered, however, that good economic arguments only go so far in changing the minds of market-skeptic conservatives. If the state doesn’t engage in extensive and deep economic regulation, I’ve heard more than one conservative say, what’s to stop rampant materialism from becoming the norm? How, they say, do we prevent the type of dynamic commercial relationships associated with markets from putting immense pressure on other types of human relations, especially families?
The good news is that many free-market thinkers in the past thought long and hard about these matters, many of which revolve around the type of moral and cultural ecology most suitable for market economies. Consider, for instance, the German ordoliberal economist Wilhelm Röpke.
A leading architect of the 1948 German economic miracle, Röpke’s 1960 book A Humane Economy stresses the importance of understanding the fact of scarcity, the workings of free prices, the significance of marginal utility, and other foundational assumptions of free-market economics. But the book is equally focused on the moral and cultural conditions needed — self-discipline, Tocquevillian habits of association and a rich civil society as well as virtues such as trust, honesty, generosity, and a sense of justice, to name just a few — if markets are not to facilitate societies in which hedonism and materialism constitute the limits of our moral horizons. The sources of these preconditions, Röpke specified, are “families, church, genuine communities, and tradition”: i.e., forms of knowledge and human association that self-described conservatives typically value.
Twenty-two years later, another free-market thinker made similar arguments, albeit with an American focus. In The Spirit of Democratic Capitalism, Michael Novak concisely articulated the economic arguments favoring markets over interventionism using language about as far removed from an economics textbook as can be imagined. Yet Novak devoted as much time to exploring the political, constitutional, and cultural preconditions required for a functioning market economy in which norms that went beyond utility-satisfaction were taken seriously.
Figures such as Novak and Röpke stand in an even older tradition of free-market advocates who understood well the importance of the moral-cultural ecology in which markets operate. As demonstrated by Gregory M. Collins in Commerce and Manners in Edmund Burke’s Political Economy, the father of modern conservatism certainly favored greater domestic and international economic liberty and market freedoms. He was also deeply critical of the reigning mercantilism of his time. Burke nonetheless believed that expanding commercial liberties had to be embedded in habits and institutions that Burke associated with social affections, aristocratic moderation, and religious norms.
On one level, Burke believed that this implied wealthy people embracing the Jewish and Christian teaching that they had concrete responsibilities to those on society’s margins. In many places, Burke emphasized the political and economic dysfunctionalities associated with delegating these obligations to governments. This was one reason Burke was so skeptical of government attempts to redistribute wealth. But he also maintained that failure to privately assist those in need was morally wrong, and corroded many of the bonds that bound communities together.
Similar observations about the cultural context in which markets operate were made by Adam Smith. In 1790, Smith added a new part titled “Of the Character of Virtue” to the sixth and final edition of his Theory of Moral Sentiments.
Smith’s reasons for making this substantial addition to a book first published in 1759 may never be fully known. But perhaps Smith understood that as commercial society and liberties to innovate, trade, own and use property, and economically associate with others began to spread, it was important to stress that these freedoms should be enveloped by moral expectations, especially commercial, classical, and particular religious virtues. Self-interest, even rational self-interest, wasn’t enough for Smith.
Many of these insights are developed by the 2002 Nobel economic laureate Vernon L. Smith and the economist Bart J. Wilson in their 2019 book Humanomics: Moral Sentiments and the Wealth of Nations for the Twenty-First Century. They define the two spheres that Adam Smith explores in the Theory of Moral Sentiments and the Wealth of Nations as, respectively, “the personal social” and “the impersonal economic.”
Smith and Wilson then illustrate how neoclassical economics with its attention to utility-maximization struggles to account for how cooperative people are in reality. Using Adam Smith’s study of human sociability as their starting point, they demonstrate how our development of sensibilities such as fellow-feeling and benevolence help us grasp how our decisions may advantage or wound others. This helps us adjust our choices, including in economic life.
In short, the decisions that drive market transactions are less narrowly self-regarding than often supposed. That means we can’t understand economics just as an empirical method of inquiry that doesn’t account for either the effects of human sympathy or the concerns for justice that flow from that sympathy.
These, I’d suggest, are the type of thinkers and arguments that should be put in front of young conservatives skeptical of markets today. For one thing, they illustrate the complexity of market economies while paying equal heed to the type of moral-cultural underpinnings that conservatives care about. But they also remind us that there’s no government program able to will such a moral ecology into existence. Indeed, excessive interventionism tends to crowd out the type of bottom-up, associational life that people such as Röpke, Novak, Burke, and Smith considered essential if free markets are to contribute to civilizational development, rather than the inverse.
In other words, conservative arguments for markets can’t be limited to technical economics, as important as it is. It has to enter the realm of political economy. Until it does so in full force, market-skepticism among American conservatives will only grow.