Authored by Bradley Thomas via The Mises Institute,
In a December 23 article published on mises.org, Lipton Matthews made the compelling case for advocates of free market capitalism to prioritize the moral superiority of capitalism rather than making the case for capitalism’s superior productivity.
“Demonstrating the impracticality of socialism is necessary, but is also an ineffective strategy to galvanize goodwill for capitalism, because objections to capitalism are usually predicated on moral grounds,” he wrote.
Indeed, in the battle of emotions vs. rational justification in the human brain, emotions are king. You cannot penetrate emotional objections with more charts and spreadsheets.
The most compelling case for economic freedom is not its economic efficiency but its consistency with fundamental moral principles, like voluntary exchange, property, and enhanced individual choice.
To libertarians and other free market supporters, the case is clear. But why do so many still insist that socialism is a morally superior system?
The term “socialism” was trending on Twitter on December 28 and 29, with the following tweet exemplifying the arguments made by many in support:
Selflessness. Meeting people’s needs. These are the characteristics that socialists use to describe their desired system. Nothing about productivity or wealth creation. Theirs is a purely emotional appeal to moral sensibilities.
It’s unwise to merely dismiss such adherents of socialism as being naïve or ignorant. Rather, an understanding of mankind’s historical development tells us that believing socialism to be the moral means of organizing society may be hardwired into our consciousnesses.
In its most basic sense, morality is described as the principles defining “good” or “bad” behavior. But how does a society come to understand which is “good” or “bad” behavior?
In his 2012 article “The Origins of Envy,” published by the American Enterprise Institute, Max Borders cites Max Krasnow, a postdoctoral researcher specializing in evolutionary psychology at Harvard University, who informs us that emotions are “the coordinated response of diverse psychological and physiological systems to a class of stimuli.”
In other words, your brain reacts to things in the world around you, and these reactions have forged emotions in our brains over millions of years. This hardwiring of our emotions was developed based upon survival. And because each new generation can’t learn the right survival instincts from scratch, we have a certain level of emotional responses and learned behavior built into our cognitive systems. Think about reflexes such as jumping in fear when you think you see a snake—that response kicks in before your mind has a chance to reflect. This is a built-in instinct.
Throughout most of human history, mankind developed as small tribes of hunters and gatherers. Innate instincts were developed for survival purposes—creating the foundation for a moral code.
A certain set of moral rules emerged, largely because they enhanced the survival chances of the group. These rules were shaped by the primary characteristics of man’s environment. The small tribes people lived in were largely self-sufficient and were small enough to share the same goal (survival).
This moral code based on tribal instincts included these key characteristics:
- Self-sacrifice (making oneself worse off to benefit another; a zero-sum exchange)
- Intentionally helping others
- Providing help to identifiable beneficiaries with shared goals (i.e., survival of the group)
In this setting of small tribes, it was quite reasonable to believe that anyone accumulating wealth was doing so only at the expense of others. Hunters and gatherers were only able to accumulate a finite amount of food to sustain the group. So if John managed to take and accumulate more than his “share” of the day’s food supply, he could do so only at the expense of lessening Jane’s allotment. Jane’s very survival would be threatened because she may not get enough calories to survive.
Tribal instincts established that for the good of the survival of the group (a common goal), John shares his fowl with Jane (intentionally helping an identifiable beneficiary) and gets nothing in return (zero-sum exchange).
Thus, a moral code was established in early, tribal man.
In their 2011 essay “Markets and Morality” in Cato Journal, economists J.R. Clark and Dwight R. Lee referred to this type of moral code as “magnanimous morality.”
They chose this terminology because it is very easy to praise this type of moral behavior, and it is easy to observe and trace the benefits of such self-sacrifice.
The instincts that developed from such scenarios formed emotions such as guilt and provided a foundation for the code of magnanimous morality. Tribes that developed these emotional and moral adaptations were more likely to survive than those that didn’t.
Notice how closely this primitive moral code tracks with the Twitter socialist’s emphasis on “selflessness” and “meeting people’s needs.”
The “Extended Order”
As mankind evolved into larger societies that developed a growing diversity of individual goals, division of labor, trade, and new moral codes of conduct emerged.
These new moral codes emerged because those practicing them were able to grow and prosper relative to other societies—given the changing social environment. These codes of just conduct were not consciously adopted or decreed by individuals—they evolved over countless generations.
The new moral code that emerged included:
- Self-ownership (i.e., individual rights)
- Refraining from harming others
- Property rights
- No one has an entitlement to the property or effort of another
- Equality before the law
- Free voluntary exchange
Recorded history over the last hundreds of years is crystal clear: those societies that adopted the above as priorities flourished far more than those that didn’t, and continue to do so.
In short, in order to successfully transition from small tribes to large-scale civilization, society must adapt to new rules of interaction; i.e., a new moral code.
Those still insisting that socialism is a morally superior system are appealing to innate moral instincts developed in primitive times, which many now recognize would spell disaster in today’s “extended order” of society. Inspired by Marx and Engels (among others), today’s socialists cling to a romanticized version of early tribal units that had to consciously share goods of value in order to survive.
Why Capitalism Is Necessary to Fulfill the Goals of “Magnanimous Morality” Favored by Socialists
As humankind evolves into large societies, the characteristics of magnanimous morality—as a means to organize society as a whole—break down, for several reasons:
- The number of people we can meaningfully care for is small relative to the total population (i.e., there is a limited number of identifiable beneficiaries)
- A wide diversity of skills and specialized efforts means a wide diversity of individual goals—not shared goals like in a small tribe
- Zero-sum self-sacrifice (i.e., giving without getting anything in return) cannot expand to too many others without spelling one’s own demise. If you keep giving while getting nothing in return, eventually you will starve.
- People cannot intentionally help others without knowing what their needs are
- In a larger society, there are simply too many people to understand what each individual’s needs are
- If economic exchanges were restricted only to those with whom we share personal bonds, the loss of gains from trades never occurring would drastically stymie economic growth
Instead, a competitive market based on private property better enables entrepreneurs to meet the needs of other individuals in a large, diverse society:
- Individuals acquire wealth through producing and exchanging goods and services that others want
- To receive, one must first give
- Therefore, they must first take into consideration what others need
- Prices, conveyed by the free exchange of private property, communicate the needs of those we don’t know. Consumers bid up the prices of those goods most in demand, which signals to entrepreneurs, enabling them to intentionally provide goods valued by others
- People become wealthy by making others better off, not by making others worse off. Market exchanges are decidedly not zero sum.
- In a market economy, one must serve others in society if he wants to acquire riches, even those he may not like
- Cattle ranchers in Wyoming who may hate New Yorkers still get up early in the morning to produce beef that will be enjoyed by New Yorkers because the rancher wants to earn income
- Relying on pure self-sacrifice would not achieve these results; forcing such sacrifice would not only violate our rights but foster resentment and tension
In order to win in the arena of ideas, it is critical to understand what motivates our opponents. Socialists are motivated by a moral code that was hardwired into our brains in primitive times, and are mistakenly translating it into a means of organizing a much more extended society than the one in which that moral code emerged.
Even granting the goals of “meeting people’s needs” and “selflessness” cherished by socialists, we can make the case that a competitive, property-based market economy is far superior at meeting those goals in modern civilization compared to a top-down, centrally controlled socialist system.