Richard Kyte: Free markets can come with a price

2011-02-27T00:30:00Z Richard Kyte: Free markets can come with a priceBy Richard Kyte | The Ethical Life La Crosse Tribune
February 27, 2011 12:30 am  • 

In 1776, an event occurred that set the course for the American way of life: Adam Smith’s “The Wealth of Nations” was published. So influential did Smith’s ideas become to the burgeoning American republic that one could almost consider the Scottish philosopher to be among the nation’s founders.

Smith established a blueprint and a justification for free market economies. He argued that the common good is advanced most effectively by giving individuals the freedom to pursue their own interests: “every individual ... intends only his own gain, and he is ... led by an invisible hand to promote an end which was no part of his intention.”

In other words, people are selfish, but if they are allowed to act on their selfishness, they will inadvertently promote the common good.

Smith was not oblivious to the potential dangers of his proposal. One concern arises from the division of labor. In primitive societies, he said, every person assumes many roles, which naturally lends itself to a shared conception of the public good. But in a capitalistic society, the division of labor requires each person becomes a specialist and spends much of his or her life doing only one thing. This leads to a narrowness of view, and thus to bitter political disputes defined by special interests.

Another concern arises from the conflation of needs and desires. In a capitalistic society, the consumption of goods drives the economic engine. It doesn’t matter much whether the goods are necessary, what’s important is that people keep producing and consuming them. This produces an inclination for people to think that they cannot be satisfied without “more.” And because there is no end to “more,” there is no reaching a state of satisfaction.   

The remedy for the first problem, Smith said, is public education. Society needs education to provide citizens with a broad perspective and a common language so that political disputes may be negotiated reasonably and effectively.

The remedy for the second problem is to cultivate the virtue of temperance, so that people do not become slaves to the very desires that generate the wealth of the economy.

Temperance, one of the four cardinal virtues, had been a fixture in Western societies since the ancient Greeks. It consisted in the ability to regulate one’s desires, taking the appropriate kind of enjoyment in physical pleasures. The temperate person was able to distinguish needs from desires and not allow reason to be swayed by lust or gluttony.

Among ancient writers an oft-cited example of intemperance was Philoxenenus of Leucas, a famous glutton, who wished to have a neck as long as a crane’s so that the pleasure of swallowing his food could be extended indefinitely. Nobody today wishes to have a neck as long as a crane, but plenty of people will buy diet soda, or fat-free potato chips, or Viagra, in order to extend the pleasures of drinking, eating and sex indefinitely and without (apparent) consequence.

In today’s society, the management of pleasure has come to be seen not as a moral problem but as a technological challenge. The very word “temperance” is nearly extinct from our everyday vocabulary, a sure indication that we have little use for the concept.

Reflecting on the growing intemperance of his age, the English poet William Wordsworth wrote:

“The world is too much with us; late and soon,

Getting and spending, we lay waste our powers;

Little we see in Nature that is ours;

We have given our hearts away, a sordid boon!”

If Wordsworth thought the citizens of 19th century England were out of tune with nature, wasting their powers by “getting and spending,” what would he say of Americans today? What would Adam Smith say of a people who extol the material advantages of a free market while failing to appreciate its moral risks?

The Ethical Life is a series of reflections on the ways ethical thinking influences our actions, emotions and relationships. Richard Kyte is the director of the D.B. Reinhart Institute for Ethics in Leadership at Viterbo University.

Copyright 2015 La Crosse Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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