Morals and Markets with Robert Skidelsky

Economics boffin Robert Skidelsky has written an interesting article over at CiF about the morality of capitalism, this is my paragraph-by-paragraph response:

"...Because no social system can survive for long without a moral basis..."

This isn't really correct. Slavery persisted for centuries in the ancient world as the economic prime mover and yet was and is morally suspect.

"...It has often been claimed that capitalism rewards the qualities of self-restraint, hard work, inventiveness, thrift, and prudence. On the other hand, it crowds out virtues that have no economic utility, like heroism, honour, generosity, and pity..."

I think this depends on other cultural factors. Capitalism may encourage or discourage certain characteristics, but it doesn't mean these don't exist.

Also it isn't entirely true that honour and generosity are "crowded out" - good businessmen and businesswomen know the value of honour and generosity.

"...For quality of life, we have to rely on morals, not markets..."

This is very true.

"...But it is truer to say that the market economy is sustained by the stimulation of greed and envy through advertising..."

I wonder if it is useful to distinguish between capitalism and consumerism, and if it is useful to distinguish between "good" (buying organic, locally produced, low-CO2-profile vegetables) consumerism and "bad" (cigarettes) consumerism?

"...In a perfectly competitive market, with full information, models of the market show that all the factors of production receive rewards equal to their marginal products, ie all are paid what they are worth..."

As in the market, so in life. If everyone had "full information" we'd all be much happier. But because having "full information" is unfeasible it isn't useful to use this as a stick to beat capitalism with.

"...But no actually existing capitalist market system spontaneously generates justice in exchange..."

This is why liberal democracies have (democratically elected) representatives who control the state and who provide justice.

"...That is why the liberal theory of justice demands at a minimum equality of opportunity: the attempt - as far as is compatible with personal liberty - to eliminate all those differences in life chances arising from unequal starting points..."

Sorry, I should read down further before I comment. I agree completely.

"...Finally, the claim that everyone is - under ideal conditions - paid what they are worth is an economic, not a moral, valuation..."

Yes, I agree with this.

"...The simplest way of doing this is to restrict advertising. This would prune the role of greed and envy in the operation of markets, and create room for the flourishing of other motives..."

Governments do restrict advertising. "Re-moralising" wants is an interesting idea. But I don't see how "restricting" advertising accomplishes that.

Promoting morality is a difficult thing to do without being morally puritan and judgmental of other people's pleasures.

I would say that a good step would be to replace "RE" lessons in UK schools with "morality and ethics" lessons where students were taught about different moral and ethical structures and asked to consider moral and ethical problems.