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The Ethics of Capitalism: An Introduction
Can capitalism have moral foundations? Though this question may seem strange in today's world of vast economic disparities and widespread poverty, discussions originating with the birth of capitalism add a critical perspective to the current debate on the efficacy and morality of capitalist economies.
Authors Daniel Halliday and John Thrasher use this question to introduce classical political philosophy as a framework by which to evaluate the ethics of capitalism today. They revisit and reconstruct historical eighteenth- and nineteenth-century defenses of capitalism, as written by key proponents such as Adam Smith and John Stuart Mill. They ask what these early advocates of market order would say about contemporary economies, and argue for the importance of connecting these foundational defenses to discussions of economic systems and the roles they play in economic justice and injustice today.
The textbook covers longstanding problems that are as old as the discussion of capitalism itself, such as wage inequality, global trade, and the connection between paid labor and human flourishing. It also addresses new challenges, such as climate change, the welfare state, and competitive consumption, and provides topical global case studies. Additionally, it includes study questions at the end of each chapter and an author-created companion website to help guide classroom discussion.
Authors Daniel Halliday and John Thrasher use this question to introduce classical political philosophy as a framework by which to evaluate the ethics of capitalism today. They revisit and reconstruct historical eighteenth- and nineteenth-century defenses of capitalism, as written by key proponents such as Adam Smith and John Stuart Mill. They ask what these early advocates of market order would say about contemporary economies, and argue for the importance of connecting these foundational defenses to discussions of economic systems and the roles they play in economic justice and injustice today.
The textbook covers longstanding problems that are as old as the discussion of capitalism itself, such as wage inequality, global trade, and the connection between paid labor and human flourishing. It also addresses new challenges, such as climate change, the welfare state, and competitive consumption, and provides topical global case studies. Additionally, it includes study questions at the end of each chapter and an author-created companion website to help guide classroom discussion.
288 pages, Paperback
Published June 1, 2020
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Displaying 1 - 8 of 8 reviews
April 21, 2022
This is a very pedagogical introduction to the topic, clearly presented and perfectly adapted for classroom use. However, under the guise of a dispassionate ethical examination of capitalism, it is obviously intended as a gateway drug to libertarianism.
The chapter I found most unsatisfactory was chapter 11, "Do Markets Wreck the Planet?", which is a very cursory look at how markets might cope with the environmental crisis. Arne Naess and deep ecology are summarily dismissed as "extreme" ("it is somewhat hard to explain why such things as trees, mountains, and the like are valuable simply because of what they are" p217, p225); there is no mention of Herman Daly's ecological economics or even degrowth, depopulation or rewilding; the Julian Simon faith in humans as the ultimate resource is affirmed without him being explicitly referenced ("we should think that the most important resource that we have as human intelligence and ingenuity" p221, in a section itself entitled "Resources Aren't Intrinsically Limited"); and a market in hunting post-reproductive big game (including rhinos) is defended (one of the mere three recommended readings for the chapter is an article by libertarian author David Schmidtz stating "the theoretical foundations for a defensible market in hunting" p233.)
The main pro-capitalist lesson of the chapter is that capitalism makes countries richer, and that "richer societies deal with calamities better than poorer ones" (p225.) Given that richer countries also contribute more to global warming (per capita) and environmental problems generally, that is only a compounding factor in climate injustice.
At one point, the authors explain that "unlike prevention, alleviation is able to harness some of the unique strengths of capitalist economies", which are better at insulating "individuals and nations from the negative effects of warming" (p225). But the first proposition has its converse: "unlike alleviation, prevention is unable to harness any of the unique strengths of capitalist economies".
One of the rhetorical tricks used by the authors to uncouple climate change from capitalism is to argue that "the countries most responsible for continuing to pump carbon into the atmosphere are, like China, not capitalist societies in any straightforward sense" (p223): "the two largest increasing carbon producers are and will continue to be India and China" (p226.) That is clearly a disingenuous argument, since *per capita* emissions of GHG in the USA (in 2018) are 19.9 metric tons of CO2e (Australia and Canada are even higher), while they are less than half as high in China (8.87) and about one eighth as high in India (2.5). And neither country would have industrialised as much (and therefore polluted as much) if they had not liberalised their economy (anti-capitalist countries are good at keeping their population poor, which, sad to say, is good for the environment, ceteris paribus.)
In the chapter entitled "Should Some Things Not Be for Sale?" (in which the answer is mostly a libertarian no), the authors also make a case for the legalisation of recreational drugs, including heroin. One of their arguments is that illegal drugs are "routinely... cut... with impurities", "mixed with substances such as brick dust (similar colour), ground glass, and floor cleaner. None of these substances will do you any good if you ingest them" (p240). Legalisation, on the other hand, "as well as improving the product, ... often lowers the price" (id.) I'm not sure a mixture of brick dust, ground glass and floor cleaner would be any more harmful to my body than the equivalent amount of heroin. Given a choice between the two, I would in fact rather take the former. As to lowering the price of heroin, I fail to see the benefit, since the substance should not be consumed in the first place, and higher prices will act as a deterrent.
The chapter I found most unsatisfactory was chapter 11, "Do Markets Wreck the Planet?", which is a very cursory look at how markets might cope with the environmental crisis. Arne Naess and deep ecology are summarily dismissed as "extreme" ("it is somewhat hard to explain why such things as trees, mountains, and the like are valuable simply because of what they are" p217, p225); there is no mention of Herman Daly's ecological economics or even degrowth, depopulation or rewilding; the Julian Simon faith in humans as the ultimate resource is affirmed without him being explicitly referenced ("we should think that the most important resource that we have as human intelligence and ingenuity" p221, in a section itself entitled "Resources Aren't Intrinsically Limited"); and a market in hunting post-reproductive big game (including rhinos) is defended (one of the mere three recommended readings for the chapter is an article by libertarian author David Schmidtz stating "the theoretical foundations for a defensible market in hunting" p233.)
The main pro-capitalist lesson of the chapter is that capitalism makes countries richer, and that "richer societies deal with calamities better than poorer ones" (p225.) Given that richer countries also contribute more to global warming (per capita) and environmental problems generally, that is only a compounding factor in climate injustice.
At one point, the authors explain that "unlike prevention, alleviation is able to harness some of the unique strengths of capitalist economies", which are better at insulating "individuals and nations from the negative effects of warming" (p225). But the first proposition has its converse: "unlike alleviation, prevention is unable to harness any of the unique strengths of capitalist economies".
One of the rhetorical tricks used by the authors to uncouple climate change from capitalism is to argue that "the countries most responsible for continuing to pump carbon into the atmosphere are, like China, not capitalist societies in any straightforward sense" (p223): "the two largest increasing carbon producers are and will continue to be India and China" (p226.) That is clearly a disingenuous argument, since *per capita* emissions of GHG in the USA (in 2018) are 19.9 metric tons of CO2e (Australia and Canada are even higher), while they are less than half as high in China (8.87) and about one eighth as high in India (2.5). And neither country would have industrialised as much (and therefore polluted as much) if they had not liberalised their economy (anti-capitalist countries are good at keeping their population poor, which, sad to say, is good for the environment, ceteris paribus.)
In the chapter entitled "Should Some Things Not Be for Sale?" (in which the answer is mostly a libertarian no), the authors also make a case for the legalisation of recreational drugs, including heroin. One of their arguments is that illegal drugs are "routinely... cut... with impurities", "mixed with substances such as brick dust (similar colour), ground glass, and floor cleaner. None of these substances will do you any good if you ingest them" (p240). Legalisation, on the other hand, "as well as improving the product, ... often lowers the price" (id.) I'm not sure a mixture of brick dust, ground glass and floor cleaner would be any more harmful to my body than the equivalent amount of heroin. Given a choice between the two, I would in fact rather take the former. As to lowering the price of heroin, I fail to see the benefit, since the substance should not be consumed in the first place, and higher prices will act as a deterrent.
June 5, 2021
Strong recommendation overall - personally, a lot of valuable new information. Just the further reading sections at the end of each chapter alone are highly appreciated.
The strength of the book is clearly putting a lot of concepts and worries related to systemic criticism of capitalism and its alternatives into (initially mostly into historical) context. There were one or two chapters that I thought were weaker than the others (the one on global trade seemed to me a bit overly taking position; the one on goods that should not be traded could have mentioned personal data privacy or the trade of emissions as current topics). But these comments shall not distract from the fact that this will become my favourite go-to book for discussions about capitalism for quite some time.
The strength of the book is clearly putting a lot of concepts and worries related to systemic criticism of capitalism and its alternatives into (initially mostly into historical) context. There were one or two chapters that I thought were weaker than the others (the one on global trade seemed to me a bit overly taking position; the one on goods that should not be traded could have mentioned personal data privacy or the trade of emissions as current topics). But these comments shall not distract from the fact that this will become my favourite go-to book for discussions about capitalism for quite some time.
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June 6, 2022Technically finished last year but forgot to update so it can go towards this year as I am so behind my reading goal
October 15, 2020
I found this via a recommendation from Tyler Cowen on his daily Marginal Revolution email. It is a great introduction to the ethics of capitalism, and even for someone who has read a bit on the subject, there were new topics to learn about.
The book's main point is there is more to capitalism than its ability to grow the economy. When capitalism was first being theorized it was seen as moral in of itself. The book attempts to review the moral benefits of capitalism, compare them to alternative systems, and identify ethical weaknesses in modern capitalism.
Some points I picked up were:
1) Capitalism was first introduced against the backdrop of feudalism. Capitalism was an improvement over feudalism in everyway, both in terms of morality and efficiency. In fact many of the bad aspects of modern society could be understood as the reemergence of feudalism.
2) Socialism failed in practice. From incentive problems, to information problems, to inherent coerciveness Socialism was flawed from within. One should not compare idealised Socialism to in practice capitalism, societal orders must be judged by their effects in practice.
3) Labour markets are a key thing to watch in capitalism, and in the modern era there are some worrying signals. From runaway salaries at the top, alienated labour in production lines, and exploitation there are many concerns. There are solutions to these questions, the modern welfare state, Rawls's property owning democracy, UBI, and meritocracy; all of which may work at different times.
4) Trade is a good thing. It not only creates value for the world, but ensures the poorest of the world improve their living standards.
5) Capitalism may be at risk from people competing in status games. These games may bid the prices up in a zero sum fashion, not increasing value towards the most socially useful things (when analysed from some standpoints).
One great element of the book are the recommended reading lists at the end of each chapter. The authors give a mini summary of what to expect with the book, allowing you to go deeper into topics more precisely.
Coupled with these reading lists are study questions. The book is intended as an accompanying textbook for an undergraduate course and is set out in a way to help teachers organize their tutorials. I personally did not find them useful, but available if you want them.
The book's main point is there is more to capitalism than its ability to grow the economy. When capitalism was first being theorized it was seen as moral in of itself. The book attempts to review the moral benefits of capitalism, compare them to alternative systems, and identify ethical weaknesses in modern capitalism.
Some points I picked up were:
1) Capitalism was first introduced against the backdrop of feudalism. Capitalism was an improvement over feudalism in everyway, both in terms of morality and efficiency. In fact many of the bad aspects of modern society could be understood as the reemergence of feudalism.
2) Socialism failed in practice. From incentive problems, to information problems, to inherent coerciveness Socialism was flawed from within. One should not compare idealised Socialism to in practice capitalism, societal orders must be judged by their effects in practice.
3) Labour markets are a key thing to watch in capitalism, and in the modern era there are some worrying signals. From runaway salaries at the top, alienated labour in production lines, and exploitation there are many concerns. There are solutions to these questions, the modern welfare state, Rawls's property owning democracy, UBI, and meritocracy; all of which may work at different times.
4) Trade is a good thing. It not only creates value for the world, but ensures the poorest of the world improve their living standards.
5) Capitalism may be at risk from people competing in status games. These games may bid the prices up in a zero sum fashion, not increasing value towards the most socially useful things (when analysed from some standpoints).
One great element of the book are the recommended reading lists at the end of each chapter. The authors give a mini summary of what to expect with the book, allowing you to go deeper into topics more precisely.
Coupled with these reading lists are study questions. The book is intended as an accompanying textbook for an undergraduate course and is set out in a way to help teachers organize their tutorials. I personally did not find them useful, but available if you want them.
September 9, 2022
Except for the Introduction, where capitalism as victim almost made me put down the book before I even started, I thought this a pretty well-rounded discussion on capital markets. It does take a Libertarian bent a lot of the time, but the authors do well to add divergent views in the Further Reading sections and the References; the Further Reading sections are worth a star all by themselves, and my TBR pile is a little fatter now.
October 30, 2020
This is «An Introduction» because the author has a very approximative grasp of the concepts, even the main piece: Capitalism, is a form a Socialism, commonly found as Cronyism in some texts.
June 15, 2021
Nice introduction, perfect as a starting point for getting deeper into certain topics.
April 30, 2023
Halliday and Thrasher provide a clear and concise overview of the general moral arguments which can be made in favour of capitalism as a political economy. They provide the best version of the arguments and recognise their limitations. A great place if you want to defend free markets and a great place to start with you want to know the best arguments the opposition has to offer.
Displaying 1 - 8 of 8 reviews