The Moral Case For Free Enterprise

     The recent financial crisis has set off a new battle in the culture war between free markets and big gov’t. It is a struggle to shape the nation’s identity and future. While a majority of Americans favor the free enterprise system the arguments made in its defense often fail to show why we are better off with free markets. Its proponents hinder their efforts by making arguments that are dry and technical. The moral case for free markets is not being made as frequently and eloquently as it can be and Arthur Brooks does a great job addressing this. His book makes the argument that should be a model for everyone who believes in free markets. It is optimistic and persuasive and is based on the data and not some ideological vision. Brooks’ thesis is that free markets are more popular and that it is the more positive way to live. I took away three things from this book worth remembering: a majority of Americans favor free markets; free enterprise is about the pursuit of happiness; and free enterprise is morally right.

            We’re all capitalists now! Brooks makes a great start by pointing out that free enterprise is the preferred option for the majority of Americans. He demonstrates that whether its taxes, markets, the role of gov’t, etc. studies consistently show that 70% of Americans favor free markets. Alexis de Tocqueville noticed that enterprise is part of our national DNA almost two hundred years ago when he wrote Democracy in America. He noticed two exceptional qualities in Americans: their dogged pursuit of their own interests; and their tendency to organize themselves for community service. The 30% are opposed to free enterprise and prefer gov’t solutions. They are made up of leaders and followers. The leaders are the intellectuals, academics, and entertainers, the intellectual upper class. They are the five percent, which means that a majority of them are not in the demonized one percent OWS protestors do not like very much. They find support among Blacks and Hispanics who are more likely to trust the gov’t to solve problems. Among young people between 18 and 34 a majority have a positive view of socialism. This match-up makes for an intense battle of ideas, especially as there are now more outlets to transmit a variety of viewpoints.

            Brooks sets himself apart in his chapter on free enterprise and the pursuit of happiness because he uses aspirational themes that are necessary for making the moral case. He points out that the battle for free markets is about our ability to pursue happiness. Brooks’ research on this subject has shown that the key to happiness is earned success. It is the ability to create value honestly by working for it rather than having it handed to you. People who believe they have earned their success, however they define it, are more likely to report being happy than those who have not. In the 1996 General Social Survey 45 percent of adults said they feel “completely successful” or “very successful” in their work. Among this group 39 percent said they were happy and 20 percent of those who said they were “somewhat successful” or less so said they were happy. In another survey in which respondents were asked if they agreed with the statement that they were responsible for their own success those who agreed/strongly agreed spent 25 percent less time feeling sad than those who disagreed/disagreed strongly. The differences in happiness levels cannot be accounted for by differences in income, education, age, sex, race, religion, politics, and family status. If you control for all those factors by looking at two people who share these traits then you will still see that the one who feels successful will be twice as likely to report feeling very happy about his life. Studies also show that all lottery winners report the same level of happiness, or worse, they had before they won the lottery within months. In fact, they were less happy about simple pleasures (spending time with friends) and new pleasures made possible by their new wealth. A University of Michigan study in 2001 showed that going on welfare increases the likelihood of a person feeling inconsolably sad by 16 percent. Other studies show that welfare recipients are unhappier than equally poor people who do not receive welfare benefits.  This foray into the weeds is meant to drive home the point that the key to human flourishing is not money but earned success in life. On the other side of that coin is the equally important fact that inequality does not make people unhappy. In this context free enterprise is important because it enables us to pursue happiness in life by giving us the opportunity to earn our own success. This transitions smoothly into the moral argument for free enterprise that Brooks makes in the last chapter.

            Lincoln said, “I don’t believe in a law to prevent a man from getting rich…So while we do not propose any war upon capital, we do wish to allow the humblest man an equal chance to get rich with everybody else.” The ultimate goal of the 30 percent coalition is to achieve an equality of outcomes because they believe that equality makes for a fair society in which everyone is better off. Fairness is the euphemism they use to justify income redistribution. It is a moral issue for them and Brooks adamantly warns us not to cede the moral ground to the 30 percent. He offers a competing definition of fairness based on a system that rewards honest hard work and excellence. It is a concept we all understand and live by. This system rewards both the rich and poor and it is not a zero-sum game. The equality that matters is equality of opportunity and not results. Just imagine what sports would be like if all the runners always finished at the same time. Everyone has different goals and priorities and beliefs about what is success and it is absurd to think that everyone will be happier if we all had the same level of wealth. By challenging these presumptions of the 30 percent we can start to push back their control of the moral ground and offer a compelling alternative to greater gov’t intervention into our lives.

            I found myself nodding in agreement as I made my way through the book because Brooks connected the dots that I had seen. The point of free enterprise is not to avoid gov’t intervention wherever possible. The goal is human flourishing and that can only be achieved when people are free to pursue happiness. As we saw, happiness is not the result of having greater wealth but of having earned your success by doing honest work. I would add that it is about having the freedom to pursue the virtuous, good life. It is why so many originally came here and it is why people from around the world continue to risk their lives to come to the U.S. That’s what free markets are about and we should always remember that the stakes are high.