Capitalism without Guilt

I recently listened to a podcast of a talk called Capitalism without Guilt given by Yaron Brook at the London School of Economics. I was interested, because I did not expect the Director of the Ayn Rand Institute to be speaking at the LSE. He said that the fundamental objection to capitalism is not economic, but moral.

People operate in the market to make money. Some will have a passion for what they do, but their basic drive is to make their own life better. The businessperson’s motivation is not the “common good” or “social utility”, but to make their lives better. The market is a place where people meet to fulfil their self-interest. Buyers and sellers both want to make their lives better.

We are taught that to be good or virtuous is to be selfless and to sacrifice to others. We were taught to think of others first and yourself last. According to philosophers, morality is about being selfless and caring for others. The more you sacrifice, the more noble you are. The more you give the better you are. According to most moral teaching self-interest is wrong. People honour philanthropy and community service, but denigrate business, profit seeking and entrepreneurship.

We tend to assume that all businessmen are evil. We feel safe because an elevator has been checked by a bureaucrat. We sleep at night because Ben Bernanke is in charge of a monetary system.

We have a morality that is inconsistent with capitalism. Very few people live a selfless life. They pursue self-interest. When you live one life, but believe you should be living another, you get guilt. Guilt is a powerful emotion. It is an amazing mechanism for controlling people. It is why rich people cote for increases in taxes. They need to redress their guilt, because they have this unrealistic morality.

We will continue to move away from capitalism, as long as our current morality is maintained. Brook does not agree with it. We need a new morality with the objective of making a human life as good as possible. Goodness lies in the pursuing self-interest. Ayn Rand said that the number one value is self-interest.

Capitalism is a moral system, because it allows each one of us to pursue our self-interest. This is good. Brook says that we need to reject to morality of living for others, and live instead for our own flourishing. I disagree, but his talk got me thinking. Capitalism has lifted economic well being in an amazing way, but capitalistic economic theory requires people to pursue their self-interest. Yet this does not fit well with Christian morality.

This is a conundrum that has puzzled me for a while. I found the answer in another book that I am reading. I will post on it in the next few days.