We find rising prosperity and social peace in places that generally accept free markets, and we find poverty and strife in places that reject free markets—with Venezuela as the current prime example. Despite that, we hear much debate today over the morality of markets. When people are at liberty to engage in, as Robert Nozick put it, “capitalistic acts between consenting adults,” the consequences of those acts make some people unhappy. Those people complain about income inequality, worker exploitation, “commodification” of certain goods, and the undermining of key societal values.

The renewal of these complaints in recent years makes Michigan State political scientists Arthur Melzer and Steven Kautz’s Are Markets Moral? especially timely. The book is a compendium of 11 essays from authors with diverse views. Melzer and Kautz write in their introduction, “Is it somehow the case that the essential principles of the capitalist system are at odds with morality, or, less drastically, do the practical workings of the system eventually but inevitably weaken or overthrow moral practices and outcomes?” They want to know why some thinkers believe free market capitalism to be unobjectionable while others regard it as morally suspect.

In his own chapter, Melzer gives readers an overview of “the moral resistance to capitalism.” He focuses on the profit motive and points out that there are both right-wing and left-wing arguments that it does considerable harm. Right-wing critics contend that free markets lead people to a constant pursuit of wealth at the expense of higher, more intrinsically satisfying ends in life. The culture becomes overly materialistic, in this view. Left-wing critics complain about a different set of harms: markets make people unjust and exploitative. The rich use their gains to grow steadily richer while the poor grow poorer. Even if the poor don’t actually become worse off, the widening gap makes them feel worse off.

Defenses / Brown University political theorist John Tomasi kicks off the debate with a sharp essay, “Economic Liberties and Human Rights.” His central claim is that “all people, everywhere, have powerful rights to engage in private economic activity.”

He discusses the counter-arguments that have been made by such thinkers as Mill, Keynes, and Rawls that economic liberty leads to undesirable conditions that the state must correct by restricting the right to engage in economic activity. To them, Tomasi replies,

Though eminent scholars have sometimes looked down their noses at the familiar work-a-day virtues associated with economic liberties, many ordinary working people see the development and exercise of these virtues, in support of one’s own dreams and the dreams of those one loves, as the very core of a free life.

Critics of the free market, he says, ought to pay some attention to the complaints of ordinary people who have lost economic liberty.

New York University law professor Richard Epstein follows Tomasi with an essay arguing for “smart consequentialism.” He, too, defends the morality of capitalism, but argues that the best way to do this is to show the benefits of capitalism rather than appealing to notions of universal rights and especially the moral absolutism of Kant.

After considering numerous legal and moral problems, Epstein writes:

I cannot understand why a set of legal rules that seeks at every point to advance human welfare would be dismissed as immoral. On the other hand, I see every sign of danger in legal rules that block the road to success with ill-conceived regulatory and taxing initiatives.

Ill-conceived regulatory and taxing initiatives are, of course, inevitable consequences of efforts to reform or “humanize” capitalism.

Challenges / In the book’s first chapter that questions the morality of markets, New York University sociologist Steven Lukes surveys the arguments of critics on the right and left. English poet William Wordsworth lamented that as the market expands, we “lay waste our powers” and “have given our hearts away.” Another romantic, Thomas Carlyle (coiner of the epithet “dismal science” to refer to the field of economics and its embrace of free markets), saw capitalism as the destroyer of “communal bonds.” Lukes correctly observes that markets upset hierarchies and some people regard that as too high a cost to bear.

On the left, Lukes notes that Marx complained not only about the immiseration of the proletariat, but also that capitalism converted previously honored professionals such as lawyers, priests, poets, and scientists into mere paid laborers. Among contemporary enemies of the free market, Harvard political philosopher Michael Sandel bemoans the way “commodification” tends to degrade commercial goods and Stanford philosopher Debra Satz maintains that markets are noxious when they jeopardize equality. She opposes, inter alia, markets for human organs.

Lukes is quite taken with Keynes’ idea that capitalism will eventually deliver such abundance that material concerns will no longer be of issue and humanity’s remaining problem will be for everyone “to live wisely and agreeably and well”—which evidently doesn’t require much economic liberty. He closes with the rather defeatist cry, “I doubt whether the advocates of thick economic liberty and the virtues of the market can be brought to see what I have called illusions as illusions.”

Princeton legal scholar Robert George is not nearly so hostile to market liberty as Lukes. Instead, he advances a conservative criticism of business, which he thinks too often forgets that it has a stake in the health of social institutions. “The long and short of it,” he writes, “is that if we want limited government and a level of taxation that is not unduly burdensome, we need healthy institutions of civil society, beginning with a flourishing marriage culture supporting family formation and preservation.” George isn’t blaming free markets for the decline of the family, but others argue that drugs, gambling, pornography, video games, and so on are capitalist products that are to blame. George simply says that businesses should refrain from undermining the family and instead try to strengthen it.

But the enormous good capitalism has done must not be forgotten. George points especially to education. There is much hostility toward business in academia, he notes. The critics overlook the support that businesses give to education, both directly and indirectly via taxes. The taxes needed for public support of education, he reminds the academic critics, are mostly possible only because of market activity.

In the same vein is an essay by the late Peter Lawler, professor of government at Berry College. His “Higher Education and American Capitalism Today” explores the effect of capitalism on colleges and universities. More and more, when Americans go to college, they are there simply to learn a technical or vocational competency, not to read and think about the best works of humankind. Our mania for trying to put as many people through college as possible is a failure. Lawler writes, “Lots of students leave college with big debts and no prospects of becoming prosperous enough to make the monthly payments. Our colleges are charging students ridiculous rates not to prepare them effectively to be free beings who work.” Were more of us truly educated, Lawler believes, we would be better able to “resist the reductionist excesses of both capitalism and communism.” Like Wordsworth, Lawler thinks that capitalism is leading us astray.

Cultural views / Gurcharan Das, an Indian businessman, contributes a chapter on a concept vital to his culture: dharma. It doesn’t translate easily into English, but it implies a personal obligation to act honorably in all public and private dealings. It’s the “invisible glue” that, according to Das, made Indian society work. Under dharma, the pursuit of business success was perfectly fine, but subject to moral constraints. Those who violated dharma were subject not to legal punishment, but punishment by other market participants through the loss of reputation.

India’s trouble, Das says, is that for many decades it was dominated by statist thinking that came from British intellectuals. Jawaharlal Nehru, India’s prime minister from the modern nation’s founding in 1947 to his death in 1964, was responsible for fastening “a dirigiste, socialist state.” He notes, “Ironically, socialism was out of character with the historical temper of the country.”

Fortunately, India made an about-face in 1991 when new political leadership embraced free markets. The result has been tremendous economic growth. During the decade from 2003 through 2012, the nation averaged 8% annual growth, allowing millions of Indians to escape from grinding poverty.

Next, University of Illinois at Chicago economist and historian Deirdre McCloskey explains what she calls “The Great Enrichment.” For nearly all of human history, people lived precariously—the Hobbesian “short, nasty, brutish” life. What allowed humanity to start to become rich, she argues, was more than anything else a change in the way people thought about market activity. “What changed,” she writes, “was not the security of property, but the rhetoric of trade and production and improvement—that is, the way influential people talked about earning a living.”

That change led to “the Bourgeois Deal”—namely, if the bourgeoisie were allowed to produce, trade, and prosper, eventually everyone would be better off. Without the protective shield of that change in thinking, McCloskey argues, government would have stepped in and blocked capitalistic improvements in order to protect vested interests. Who mostly benefits from free markets? McCloskey answers, “The wretched of the earth.” Without it, the great majority of humans would still lead lives of “utter, terrified misery.”

Following McCloskey comes University of California, San Diego political scientist Fonna Forman. I expected her to present a strong counter-attack against the market advocates when she opened her essay with the story of her great-grandfather, who left Poland for the United States, choosing to settle in Milwaukee because the city had elected a socialist mayor. But Forman instead argues that we should rethink what most people take to be Adam Smith’s message that society functions best with a strictly individualistic capitalism. She offers several case studies involving improvements in Latin American cities that came about without capitalism.

She explores the “tradition of public thinking about urban life that has been steadily retreating in Europe and the United States, in favor of more overtly private agendas.” She does that in a series of case studies involving local politics in Latin American cities. In Bogota, Colombia, for example, the mayor succeeded in improving social norms through “behavioral intervention,” such as persuading people to be more conscientious drivers and to use less water when showering. While those stories are interesting, it’s hard to see any indictment of the morality of free markets in them. Neither Smith nor any other market proponent ever said that there aren’t nonprofit means of addressing civic problems.

Conclusion / The book’s final section consists of two essays dealing with Smith, Locke, and Montesquieu. Utah State political theorist Peter McNamara contrasts Smith and Locke, concluding that while Smith was quite certain that commerce has a beneficial moral effect on people, Locke was far less certain. Utah Valley University political scientist Andrew Bibby brings the volume to a close with an essay on the French liberal Montesquieu’s thoughts on the relationship between commerce and morality. He regarded it as beneficial, tending to “cure destructive prejudices.”

Naturally, the debate over the morality of markets will continue. Anyone who wants to enter the fray will find this book full of valuable insights.