Moral Legislation in a Free Society

Whereas on many college campuses, the chief political debate is between liberty and Marxism, here at The King’s College it is between libertarianism and a more traditional conservative position. In other words, the King’s College student body is generally in disagreement between a strictly economic view of life and a more fully political view.

The question pertains to the distinction between economic and moral decision-making. When we fail to recognize this distinction, we reduce all decisions to economic ones and see people as simply rational actors making simply rational judgments in their choices. But it is not so.

In economic life, when human nature is left to follow its course, the result is widespread prosperity, not only for those who intend it for themselves by their selfish choices, but also for others. Shared prosperity is the unintended consequence of economically selfish decisions. Because I want to make as much money as I can, I produce the best bread that I can bake while keeping my costs as low as possible. People prefer my product over that of my competitor, and as a result most people get inexpensive but nutritious bread. Furthermore, my prosperity means higher employment in the area, which in turn means higher spending, which then allows businesses to expand in order to supply the increased demand for goods and services. One person’s selfish pursuit of his own prosperity results in general prosperity. This is traditionally known as "the hidden hand" of capitalism. It does require, however, public protection from various “externalities” such as pollution.

The moral life is inherently different, however. When left to follow its course, human nature does not tend toward moral virtue and community well-being. What results instead is not moral prosperity, but moral poverty, or the brutalization of one another and of oneself; we get New York City rather than Mayberry.

Consider the notion of "taking advantage." When people take advantage of others economically, they meet one another’s economic needs, material and otherwise. Taking advantage of others in economic activity may involve actions we generally consider uncharitable, such as price gouging. But a proprietor who charges four times the normal room rate for someone who is clearly stranded is nonetheless providing a service. The customer does not suffer the discomfort of sleeping in his car, and secures himself against various other imaginable evils (thugs, freezing temperatures, etc.). The situation is admittedly not an entirely happy one, but there are real benefits on both side of the transaction. Moral exploitation, by contrast, provides no service at all, except imaginary ones to the morally confused and vulnerable, for example what a pimp provides to the scared young runaway.

Pawn shops, check cashing stores, high interest rates on credit cards, loan sharks, profiteering during wartime—these are all examples of some people economically exploiting the difficult circumstances in which other people find themselves. But in each case the exploited is free to choose whether to use the exploiters’ services, and benefits in some way if he chooses to use them.

Taking advantage of others morally is called seduction. It involves exploiting their ignorance, their weakness, or their immaturity. In moral matters, “to take advantage of” is to harm. It’s what we mean by the phrase. It is always either a confession or an accusation. The equivalent exploitation in economic activity would be fraud, for example the “lemon” automobile or the adulterated food.

Fraud is a form of theft or even assault, and it calls for protective and punitive action by the government. For the same reason, morally exploitative action calls for the same government protection.

An excellent book not only on what political men need to learn from economists, but also on what economists need to understand about politics and the nature of the political as distinguished from the economic is Steven Rhoads' The Economist's View of the World (Cambridge, 1985). Rhoads teaches political science at the University of Virginia.