The moral argument for economic freedom

By Kevin Price

Efficiency tends to be the prevailing argument for less government. We read and hear about how smaller governments are more responsible fiscally, encourage a predictable economic environment, help economies to grow, makes businesses more profitable, and much more. These things are true. Efficiency alone is a compelling argument for economic freedom, which may be a reason why it is the only one we often see. However, it could also be indicative of the times we are living in.

Morality has become subjective. "Right from wrong" has been replaced by a vast grey area in which people increasingly make decisions based on their ability to get away with something and not on whether it is right or true. Yet, in spite of how "modern" our morals, we still find it illegal to take from one in order to improve the situation of another person. The movie, Almost an Angel was fun to watch as a man who thought he had died and came back an angel, robs from a chicken store to help those who are hungry. Of course, he ends up being punished for his "good deed."

One of the fundamental precepts of a country founded on liberty — like the United States — was to make sure that the government was only a protector and not a provider. An honest umpire that treated everyone the same under the law rather than a paternal character that awarded and punished people based on subjective factors. In a country founded by liberty, government would not be in the immoral redistribution business.

This is not the case with government driven or command economies. Command economies — be they communist, socialist, progressive, democratic socialist, or whatever — have the following immoral characteristics:

The government is a common vehicle for theft, taking money from one group to give to another in pursuit of political, social or other objectives. The taking of money from some to give to others is little more than stealing. Just because it has exercised the power to do it, it does not make it right. Government expenditures are only "moral" when they benefit everyone and show special interest to no one. Furthermore, it must be in areas that the government is the only one that can do it. "Might" still does not make "right."

These types of governments have monetary policies that print money to pay for government programs (inflation), which devalue all other money in an economy. When individuals or crime syndicates do this, we call it producing counterfeit money, when government does it we inaccurately call it a vehicle for stimulating economic activity. A truly capitalistic economy would depoliticize the money and link it to gold or other precious metals to preserve the currency's value. A gold standard would not limit economic growth, but create a stable economic environment and make the US dollar the investment darling of the world.

These economies create social distortions on a macro level that we would never want on a micro level. We would not want families to be given subsidies in a way that encourages divorce so the children would receive more money. We would not want to reward poverty and waste or discourage individuals from increasing their income. These types of distortions are common in these types of command economies, but are contrary to free markets or limited governments. Bubbles and busts — like our current housing situation — do not happen on their own, but are the result of distortions created by the government.

Few can honesty argue with capitalism's ability to produce jobs, new technology, better opportunities, and personal economic growth. But these are only part of a much larger economic system. I guess it is fine if one wants to reduce the merits of free enterprise to efficiency, but it sells the strengths and moral system far too short. Capitalism embodies liberty, efficiency, and morality. The most important and persuasive is its morality. Unfortunately, this argument has become absent in the war of ideas.

© Kevin Price