All capitalism is moral capitalism
Simon Heffer has chastised David Cameron for using the term ‘moral capitalism’ in his speech at Davos:
My first thought was the quizzical one about Mr Cameron’s speaking on this subject in the first place. In pure terms it is a tautology. Capitalism is deeply moral and hardly needs the adjective to qualify it. It is moral because it is about the exercise of free will between buyers and sellers: and few things can be more moral than allowing someone to be free. Capitalism is about the link between effort and reward. It is about the creation of wealth according to the quality of one’s enterprise. Without wealth creation there is no scope for the taxation that enables the functions society deems moral: a welfare state, the defence of the realm, the maintenance of law and order. So anybody who feels he needs to make a speech about capitalism while qualifying it in this way at once raises the suspicion that he is being in some degree specious.
He is correct to criticise the terminology.
Simply, capitalism is the free exchange of goods or services with another individual. The only legal transactions are those to which all parties involved consent: and all such transactions are legal. Exploitation and slavery are illegal: if you don’t like the other party’s offer, you can always reject it. Thus, as a system devoid of immorality, it is inherently moral. That’s why we support it: and why we applaud the work of the SOAS Capitalist Society to promote capitalism as morality on campus.
The problem is that people, including Heffer in the passage quoted above, often use inferior arguments for capitalism. They say that it is proven to be the most efficient system (which it is: proven by Kenneth Arrow). They say that it is the most productive system (which it is: proven by Ludwig von Mises). They say that it leads intrinsically to democracy (which it does: proven by Friedrich Hayek). But these arguments are all flawed in that they are complex. One cannot sit down the public and make them read the Planning in the Socialist Commonwealth, the Road to Serfdom, and hardly expect them to read Arrow and Debreu’s 1954 article on competitive equilibria, no matter how important its conclusions!
We can, however, talk about consensus. Everyone wants consensus, but think that it is unobtainable, yet capitalism works only by consensus. That is the key to promoting capitalism as moral. Not by apologising for capitalism, and then butchering, ruining, dominating capitalism by government until consensus is dead. That undermines the source of its morality: and is exactly what our leaders are trying to do to us. No matter what happens, capitalism must survive, and that relies upon people perceiving it as moral.
