The Morality of Free Market Capitalism

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Recognizing the inherent morality of free market capitalism means to first believe in its core values: maximized individual liberty, the opportunity for unlimited success and prosperity, and the goodness of failure. All three of these values contend that people are free to innovate, advance their ideas in competition with those of other individuals, and learn to continue pursuing success even when confronted with failure. Free market capitalism also necessitates a level of integrity and excellence in all products and ideas, because the competition of a free market will only reward the highest standard—a bar that keeps raising. Above all, a belief in the free market necessitates a belief in private property, and therefore the rights of the individual.

 

As a matter of individual sacrifice and perseverance, capitalism places every individual’s ideas and products in the risky position to either fail or succeed. In the instance of John D. Rockefeller’s refinery of oil, his insight on producing the best possible oil product—his kerosene versus the more prevalent whale oil—was based upon efficiency and appeal to the greatest number of people. After significantly driving down the price of kerosene in the late 1800s, Rockefeller’s standard for cheap and efficient kerosene out-competed the more expensive whale oil. The lesson from the near-collapse of the whale oil business is that capitalism, far from the rumors of its cruelty, doesn’t dismantle ideas and products needlessly (or permanently, since whale oil still has the potential for use should a capitalist make it a logical option), but by the natural rise of a competing product that is better in terms of efficiency, safety, cost, and any number of benefits that consumers need and want at a given time. As a matter of equal opportunity, not equal outcome, capitalism judges a person’s individual accomplishments and ideas regardless of how they compare to the talents of other individuals. All of the innovations that people offer their society as a whole are extracted without infringing upon their liberties, in a manner that specifically rewards the best work and ideas possible.

Capitalism encourages individuals to capitalize on their ideas without the involvement of government, which time and again proves to be the more effective solution for producing the highest possible standard of living, creating wealth, and obtaining individual success. This wisdom traces all the way back to 1873, when James J. Hill’s Great Northern Railroad was a private sector creation proving to be more efficient and operative than the government-subsidized transcontinental Union Pacific and Central Pacific railroads. The competitive nature of Hill’s railroad made it strive for the lowest cost, shortest route, and safest operation, a feat that contrasted with the failed government-funded railroads, which were crippled by inefficiency and low quality operations. The absence of a competitive system of capitalism meant that there was a greater incentive for fraud and waste than for reaching the highest standard. Capitalism therefore promotes individual liberty as much as it contributes to an overall collective good—in this case safer, more efficient, and cheaper public transportation.

To consider capitalism a system of selfishness is naive. Such a free system rewards individuals to the benefit of everyone’s livelihoods by the impartial judgment of the market, rather than the biased planning of bureaucrats. Free market capitalism is morally good because of its respect for freedom, hard work, perseverance, and creativity, in addition to preserving the property rights that are so vital to individual freedom. As a philosophy that denies limits, a free market optimistically grows the individual power of success and liberty to the benefit of the entire world. 

1 COMMENT

  1. Your examples are an interesting commentary on capitalism's advantages versus disadvantages. Particularly, I find it highly interesting that you talk about transportation, especially given that railroads are a particular pet peeve of mine, and because I think transportation is a field in which capitalism is particularly ineffective and indeed potentially harmful. What happened in 1873 is one thing, and it makes the perfectly valid point that government-run systems are more vulnerable to waste (although, that doesn't mean they're always more wasteful).

    If we look at the situation today, though, I would argue that capitalism is not going to be promoting any collective good as far as efficient and cheaper public transportation is concerned. What the U.S. railroad system needs today is damn near a complete overhaul – new tracks laid, among other things, to support the full effectiveness of a true high-speed system. Despite the public good that such a rail system could provide, I seriously doubt any private company would be able to provide one, given the massive amounts of start-up funding required and the lack of any immediate return. In this case, public funding is likely going to be necessary to at least kick-start that, just as public funding is necessary to maintain the highway system and the air traffic control grid.

    In a more general sense, capitalism does not directly promote the benefit of the entire world. Capitalism rewards behavior that creates profit. When behavior that creates profit ends up benefiting the entire world, capitalism produces a positive result. When behavior that creates profit ends up harming the general good, though, or when behavior that promotes the general good doesn’t create profit (as I addressed above with transportation), capitalism ends up harming society as a whole. For that reason, I believe that capitalism is best when tempered by reasonable regulation and when accompanied by public programs that provide valuable public services that a purely capitalistic system would never support.

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