TGIF: Capitalism and Self-Interest

The life-serving connection

It took me a while to see it, but Ayn Rand had it right when she said that the suspicion of, if not hostility to, the free-market economy—capitalism—flows from a suspicion of the pursuit of profit, that is, self-interest. Despite the blinding fact that the Declaration of Independence lists “the pursuit of happiness” as among man’s inalienable rights, a dominant, however conflicting cultural theme is that the pursuit of self-interest—egoism—is at best morally tainted and deserving of critical scrutiny.

That would explain why many Americans seem to dislike relatively wealthy people. (By world and historical standards, nearly everyone’s wealthy in America.) We libertarians like to think that this animosity is confined to those who make their fortunes off the taxpayers. I wish it were so, but I’m afraid that people who give billionaires the evil eye do not care whether someone’s wealth was a return on production or on political connections, that is, coercion. Many would no doubt endorse a line supposedly written by Balzac, “Behind every great fortune there is a crime.”

The pursuit of self-interest, or the good life, was once embraced more enthusiastically than it is today. In ancient Greece, philosophers linked morality to happiness in this world. Things went downhill when the West headed into the religion-dominated Middle Ages. In The Wealth of Nations, Adam Smith lamented that theology had severed the ancient link between ethics and happiness. (Perhaps he, along with key American founders, sensed that it is the contingency of life that accounts for the phenomenon of value in the first place—Rand’s central ethical point.)

With the Age of Reason and the Enlightenment, the atmosphere must have improved. But individuals were far from culturally free to pursue their happiness without guilt because morality had been contaminated with allegedly divine commandments, supposedly intuited duties (categorical imperatives), and admonitions about the need for self-sacrifice. Secular thinkers have been all too eager to keep religion’s ethical teachings even as they dumped faith in a deity. This is still true today. Atheists, especially the so-called New Atheists, hasten to assure their audiences that while they have given up the ghost, they have not lost faith in ecclesiastical self-sacrificial moral precepts. (See, for example, Ayaan Hirsi Ali, Richard Dawkins, and Bart Ehrman.)

Of course, self-interest couldn’t be rejected altogether. How could it be? Attempting to live by a consistent code of self-sacrifice would demoralize society, undermine civility, and sabotage the production of wealth. So some watered-down egoism had to be tolerated, but always with more than a dash of guilt that could be activated by charges of “greed” and “selfishness.” Note how the most successful producers are urged to “give something back to society”—as though producing amazing life-improving and inexpensive products counted for nothing. Self-interest has to be tempered, we are taught, because if pursued too vigorously, it would necessarily entail disregard for others. No one bothers to explain why rational self-interest—the only authentic kind: we’re reason-using beings—would have anything to do with harming other people. In many ways human relationships are constitutive of the good life; we’re poorer without them. The palpable harmony of basic interests is of personal, “selfish” value to everyone.

Further, not only has self-sacrifice never been justified as a virtue, but it is, strictly speaking, impossible. Wouldn’t it be self-regarding and therefore wrong to accept sacrifices from others? (Sacrifice is not to be confused with goodwill and generosity under appropriate circumstances. Our moralizers make a habit of conflating the two.)

The result is an incoherent moral stew. No wonder it fails as a guide to conduct. However, it is effective in instilling guilt and preparing people for selfless duty, which is always appealing to would-be rulers.

Well, if egoism—the conviction that the purpose of life is the achievement of happiness—is morally defective, then it must follow that a political-economic system founded on egoism must be the same. As long as self-interest is an object of suspicion, so will be free-market capitalism.

The profit motive is indeed central to the market economy, which has been the only engine of mass production/consumption in history. Even its staunchest enemies have agreed. While acknowledging the social benefits of the profit motive, Adam Smith recognized that the butcher, baker, and brewer put in long hours to provide our dinner not because they love us (though they may like us), but because they wish to pursue their own self-interest. And monetary profit isn’t the only benefit sought through productive work. A challenging long-term purpose enables us to exercise our rational faculties, set our value priorities, and live fully human lives. No one needs to apologize for that.

It appears that those of us who want to foster support for freedom and the free market will have to first build respect for the pursuit of self-interest. Rand said this throughout her career, but many libertarians shrank from that task (as I did), believing that explaining economics and rights theory would be hard enough without trying to teach an entire philosophy. Considering that America is now trapped in Trump World, how has that worked out, libertarians?

TGIF—The Goal Is Freedom—appears on Fridays.