russell kirk on the moral foundations of economics - tic

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The Moral Foundations of Economics: Russell Kirkby Russell Kirkby Russell Kirk

The following essay ap pears in the final chapter ofRussell Kirks textbookEconomics: Work and Prosper-ity(Pensacola, Fla.: A Beka Book Publica tions, 1989),

pp. 365368.

Some people would like to separate economists from poli-tics, but they are unable to do so. Another name for eco-nom ics is political economy. As we mentioned in earlierchapters, a sound economy cannot exist without a politicalstate to protect it. Foolish political interference with theeconomy can result in general poverty, but wise political en-couragement of the economy helps a society toward pros-perity.Similarly, some people would like to separate econom ics from morals, but they are unable to do so.For unless most men and women recognize some sort of moral principles, an economy cannotfunction except in a small and precarious way. Moral beliefs, sometimes called moral values, makepossible production, trading, saving, and the whole economic apparatus.All human creations and institutions have some connection with moral ideas and moral habits, forhuman beings are moral creatures. Concepts of right and wrong haunt us in everything we dowhether or not we wish to be concerned with moral questions.So it is that the final section of this final chapter of [Economics] on the first principles of econom icssuggests that material prosperity depends upon moral convictions and moral dealings.Adam Smith, the principal founder of economic science, was a professor of moral philosophy. Hetook it for granted that moral beliefs should affect economic doings.The success of economic measures, like the success of most other things in human existence, de-pends upon certain moral habits. If those hab its are lacking, the only other way to produce goods isby compulsionby what is called slave labor. Let us ex amine briefly some of the moral qualitiesthat make possible a prosperous economy.Any economy that functions well relies upon a high degree of honesty. Of course, some cheats andcharlatans are found in any so ciety, yet on the whole, in a prospering economy most people be-have honestly. Honesty is the best policy, Benjamin Franklin wrote in the eighteenth century, echo-ing an old English proverb. He means that honesty pays, in an economic sense.For any advanced economy is based upon contracts: agreements to sell or to buy, promises to pay,deeds of sale, all sots of commercial instruments. Many commercial contracts are oral, rather

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than written. Todays markets especially depend upon implied contracts (as distinguished from de-tailed written contracts). You may have seen a public auction, at which a bidder may pledge a largesum of money merely by raising one hand or nodding his head. The auctioneer trusts the bidder tokeep his promise to buy at a certain price. On a much vaster scale, the com plex apparatus of stockmarkets depends on such implicit contractsand on ordinary honesty.On the other hand, those societies in which theft, cheating, and lying are common do not ordinarilydevelop successful economies. If production and distribution can be carried on only under armedpro

tec

tors and with

out any cer

tainty of being paid, then lit

tle will be pro

duced and dis

trib

uted

above the level of subsistence. When bargains are not kept and loans are not repaid, prices are highand interest rates are higherwhich discourages production and distribution.Another moral quality or habit important for the success of an economy is the custom of doinggood workof producing goods of high quality. The Romans had a word for this: in dustria, amoral virtue, from which our English word industry is derived. Goods should be produced, and ser-vices rendered, for the sake of turning out something satisfactory or even admirablenot for thesake merely of cash payment. This affection for quality is bound up with the hope of pleasing orhelping the purchaser or customer: doing something kindly for other people, even though pro-ducer and distributor may never see most of the customers. This belief in working faithfully andwell is connected with the virtue called charity. For charity is not a handout, primarily; the wordmeans tenderness or love, affection for other people. The producer who creates first-rate goodsis serving other people and can take satisfaction in that service.One more virtue of the marketplace is a kind of courage: what the old Romans used to call forti-tude. This economic courage includes the willingness to take risks, the ability to endure hard times,the talent to hold out against all the dis appointment, harassment, ingratitude, and folly that fallupon people in the world of getting and spending.It would be easy enough to list other moral beliefs and customs that are part of the foundation of aprosperous economy, but we draw near to the end of this book. So in stead we turn back, for a mo -ment, to one vice we discussed earlierand to the virtue which is the opposite of that vice.The vice is called envy; the virtue is called gen erosity.Envy is a sour emotion that condemns a person to loneliness. Generosity is an emotion that attractsfriends.

The generous man or woman is very ready to praise others sincerely and to help them in stead ofhindering them. Generosity brings admiration of the achievements and qualities of other people.Now, generosity, too, is a moral quality on which a sound economy depends. Producer and distrib-utor, when they are moved by generosity, do not envy one an other: they may be competitors, butthey are friendly competitors, like contestants in some sport. And in a so ciety with a strong elementof generosity, most citizens do not support public measures that would pull down or repress themore productive and energetic and ingenious individuals.A spirit of generosity toward others is still at work in America. But in much of the world, a very differ-ent spirit has come to prevail. In Marxist lands, envy is approved by the men in power. Privatewealth and personal success are denounced on principle. The Marxist indoctrinator deliberatelypreaches envy. By appealing to that strong vice, he may be able to pull down con stitutions, classes,and religions.Because the market brings substantial success to a good many individuals, the Marxist hates themarket. A consistent Marxist declares that when two people exchange goods in any market, bothare cheated. Yes, boththat is what the Marxist says. Exchange itself is capitalist oppression, the

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Marxist propagandist proclaims. Certainly there is little profitable exchange in Communist coun-tries. Envying the markets popularity and success, the Marxist denounces the market furiously.In the long run, the envious society brings on proletarian tyranny and general poverty. In both theshort run and the long run, the gen erous society encourages political freedom and economic pros-perity.Also, a successful free economy makes possible material generosity: it creates a material abun-dance that gives wealth to private charities and enables the state to carry out measures of publicwelfare.From the generous society comes plenty. The old Greeks often represented in their sculptures andpaintings the symbol of the cornucopia, the horn of plenty, a large goats horn overflowing withflowers, fruit, and grain. To this day, the cornucopia is the symbol of a prospering economy.The American market economy, whatever its shortcomings, has put a cornucopia into mo st house-holds in the United States. The rewards of the market economy have been generous.If the horn of p lenty is to continue to overflow with good things, it must be cherished with courageand intelligence. Crushing taxation, imprudent meddling, malicious envy, or revolutionary violencemight destroy the horn. To pro tect the cornucopia, it is necessary to understand economics tolera-bly well. Otherwise, a society of generosity may give way to a so ciety of envy.In our time of trou bles, many strange economic doctrines are preached. Yet there is reason to be-lieve that the productive market economy will be functioning well a century from now. The errors ofcommand economies and the blun ders of utopian welfare states have become obvious to a greatmany people, while Adam Smith continues to make economic sense. So long as many people workintelligently, with good moral habits, for their own ad vantage and for the prosperity of a nation, aneconomy will remain healthy. But hard work and sound habits may be undone by foolish publicpolicies or by the violent envy of totalist states. There is a strong need for watchfulness on behalf ofthe economy.This book has not been able to tell you every thing about the Goose with the Golden Eggs. But wehave been able to offer some in

for

ma

tion about the care and feed

ing of this crea

ture; and we have

cautioned you not to slaughter her.Nowadays this Goose goes by the name of Mar ket Economy. It seems probable that she still will bepreening her feathers when you are ready to take your part in the world of work. If you treat herkindly and intelligently, she will continue to lay for you.Books on or by Dr. Kirk may be found in The Imaginative Conservative Bookstore. Essays on or by

Dr. Kirk may be found here.

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