Capitalism Is Not Inherently Immoral, Contrary to Prof. Eric Foner.

Gary North

Dec. 20, 2012

Prof. Foner has been around about as long as I have. He is an historian of American history, especially the 19th century. Here, he argues that John Winthrop's ideal of Christian liberty was individual liberty under God's law. As the governor of the Massachusetts Bay Company, he spoke for Puritanism. Winthrop did indeed hold this view.

He and his peers also believed in government regulation of the economy. I wrote a chapter of my 1972 Ph.D. dissertation on this. I summarized their laws here.

Foner argues that this view is not consistent with Adam Smith's defense of market arrangements in terms of personal self-interest. Foner again is correct. Service to others is the heart of the gospel: serve God, not mammon.

But he is incorrect when he says that capitalism is immoral. Capitalism follows Smith's lead: to be successful, a producer must serve the customer. You must appeal to his self-interest. This is surely moral. It is anti-coercive. It does not rely on a badge and a gun to extract wealth from someone else.

Winthrop's morality was theocentric. Smith's was anthropocentric, though only in Wealth of Nations, not in The Theory of Moral Sentiments (1759). This methodological schizophrenia was inherent in Smith's thought. It was never reconciled in his mind or his writings. The final edition of Theory of Moral Sentiments was published in 1790, 14 years after Wealth of Nations.

Economists have adopted Smith's methodology for Wealth of Nations. They have in modern times also stated their adherence to value neutrality. But they sneak morality back in whenever they announce policy recommendations. These involve making interpersonal comparisons of subjective utility, which is officially verboten, according to Chapter VI of Lionel Robbins' book, The Nature and Significance of Economic Science (1932).

There is a confrontation within the Republican Party: social conservatives vs. libertarians. But this is not based on morality vs. immorality or amorality. It is based on rival views of morality.