Many defences of capitalism, markets or free enterprise focus upon what we might call their “technical” advantages. Such defences argue that markets are “efficient”, that they promote “incentives” to hard work, trustworthiness and imagination, that they allow economic agents to discover their own preferences, that they convey economically relevant information around the economic system quickly, cheaply and effectively, that in practice they foster growth and prosperity better than alternative economic orders.
Those who want to attack private capitalist market systems typically urge, on the other hand, that for all their supposed technical advantages, such systems are fundamentally immoral. Sometimes defenders of such systems want to shrug in response, happy to see this characterised as a “head vs heart” issue, declaring, as it were: “If private capitalist market systems make us more prosperous than other systems, that should be enough virtue by itself — it’s all very well preaching about how “moral” your preferred economic system is but that’s not much use if it means everyone is poorer.”
I, on the other hand, do not accept that this is a “head vs heart” issue. I believe that the most important defences of private capitalist market systems are that they are morally superior to other systems, and that it would generally be better to have private capitalist markets than most alternatives even if those alternatives made us richer. Some of that resides in the moral virtues that private capitalist market systems incentivise and reward. But much of the moral merit of such systems is not simply a matter of their rewarding virtue but, rather, of being virtuous in-and-of themselves.
You will have spotted that I am using the formulation “private capitalist markets”. That is because I want to include within the economic system I am describing three key things: private property, capitalism and markets. Let us understand what each of these three things is and why it is intrinsically morally desirable — not simply technically desirable in terms of the prosperity it results in.
“Private property” is the product of work that I have produced or that someone else has produced and passed to me. The notion that property can be private is a consequence of the belief that we own our own labour — that we belong to ourselves rather than being fundamentally the property of our liege lord or tribe or slavemaster. That I can own things — that I can keep or store some of the fruits of my labour or that other people can give me the fruits of their labour and they then become mine — is not simply a technically useful idea. The fundamental defence of private property is not that people need incentives to work or to be creative in the form of control over things they consume. The fundamental defence is that private property is itself a moral category, a product of being a private person, an individual, a freeman.
Those who deny that property should be private or that try to collectivise or confiscate all private property are not simply guilty of engaging in practices likely to see economies grow more slowly. They are, at a fundamental level (albeit a level they themselves do not see and would not accept) thieves or enslavers.
Capitalism is the system for funding (“providing capital for”) projects via “capitalists” — i.e. in which those that invest are not (or not always) those that manage or execute projects. It is thus by definition a system in which there is the opportunity for those with good ideas, but without funds, to seek funding to allow them to try those ideas out. Any system without private capitalists must be a system in which those with funds of their own are not permitted to lend them to those without funds, in exchange for a return. That must mean it is either: a system in which only those who already have money are the only ones able to start new businesses, or to invest in new machinery, or to invest in educating themselves; or a system in which all funding of projects for those without their own funds comes from collective property (i.e. typically from the state – so it is “state capitalist”).
So, by definition, what is moral about capitalism is that it is a system the essence of which is the creation of opportunity for those without their own wealth. That may well be efficient, in that more talents are used and more good ideas taken up. But that is not its main moral virtue. Its main moral virtue is that it is a morally good thing if those with good ideas, talent and an appetite for working are not denied the opportunity to put their ideas into action just because they lack funds themselves. This fundamental moral virtue is, perhaps, amplified by a technical virtue in that in private capitalist systems there is (as a practical matter) a better chance of finding those with good ideas and funding them that tends to be the case under, for example, a system in which all such funding is collectivised — so private capitalism tends to be a system of more opportunity than state capitalism (but that is a contingent rather than basic moral point).
Markets are by definition the venues of freely chosen exchange. That involves a positive morality in that it allows for the exercise of freedom and the opportunity for human flourishing. Markets are also morally positive in that they allow for social intercourse where there is huge moral or ideological diversity, and thus they are an integral necessity of a politically, religiously and morally liberal society.
This, then, should be the core defence of private capitalist market systems. Not simply that they are heartlessly efficient or otherwise utilitarian. Not even that they reward virtues such as imagination, trustworthiness and hard work (though that is all true and valuable in its way). Rather, the best defence is that private capitalist market systems respect individual autonomy and thus respect property, that they create opportunity for those without wealth to pursue their schemes, that they allow for the exercise of freedom and human flourishing, and that they allow for peaceful and mutually advantageous social intercourse even where there is huge moral or ideological diversity. Private capitalist market systems do not only reward virtue. They are intrinsically virtuous in themselves.