I love the Templeton Foundation and I think they do fantastic work. But questions like “Does the Free Market Erode Moral Character?” bother me a great deal. As opposed to what? Socialism? Socialism certainly erodes moral character. Some of the most alienated, selfish, deracinated people I’ve ever met were people who grew up under the yoke of Communism. Arthur Brooks’s work has definitively shown that large welfare states siphon off philanthropy and erode altruism.
Adam Smith’s case for the free market rested on the fact that it encouraged good character (as Yuval Levin recently detailed), and I think Smith won that argument a long time ago. A more fruitful question, with deep religious and philosophical implications and precedents, would be “Does wealth erode moral character?” Debating that would still allow for some healthy attacks on the free market, because without free markets, wealth really isn’t something to worry about.
I don’t understand Jonah’s objection. “Does wealth erode moral character?” strikes me as a less fruitful question, because the answers are less likely to be controversial. Most of the world’s religious traditions teach that yes, it does. The arguments there are familiar. It would be harder to make a “no, it doesn’t” argument, at least based on the evidence, but I suppose one could make an interesting case that wealth might erode moral character, but not as much as grinding poverty does.
Posing it as Templeton did strikes me as guaranteeing a more insightful debate, especially given that there are a lot of serious people critical of the free market in the wake of the global meltdown. Mind you, Templeton is foursquare behind free markets, but it is by no means clear that free markets and moral virtue fit hand in glove. In fact, if you look at the (excellent) collection of answers we received, you’ll find a variety of opinions short of a full-throated “Yes!” from well-known capitalists and conservatives like Michael Novak and John C. Bogle. The discussion is more fruitful than Jonah gives it credit for being.
In my book “Crunchy Cons,” I quoted author Alan Ehrenhalt saying, “To idealize markets and to call oneself a conservative is to distort reality.” Ehrenhalt’s point is that the free market is so dynamic by nature that it makes it very difficult to conserve certain moral values and institutions that conservatives consider essential to the good life. Notice, though, that Ehrenhalt uses the verb, “to idealize.” That’s important. Few of us today would doubt the superiority of the free market over competing economic systems in providing for the material needs of the population. What we debate is where to draw the line — that is, which parts of our common life should be off-limits to market morality. If I’m reading Jonah correctly, he doesn’t believe that the market can corrode morality. Or rather, because there is no sensible alternative to some form of market capitalism, the question of whether the free market erodes moral character is a meaningless one. This I don’t get.