McCloskey has provided us with a delightful book that examines capitalism's impact on our character traits. Her central task is to convince us that the capitalist life promotes virtuous characters. I thank McCloskey for providing us with one of those rare academic treatises that makes us smile and laugh. More importantly, however, I thank her for providing us with an excellent and timely work. Just a few years after several well-publicized corporate scandals shook our society's faith in business is the perfect time to examine capitalism's influence on our character traits.
McCloskey attempts to complete at least three significant tasks in this book. First, she defends capitalism against those she terms the "clerisy." These are the academicians, artists, and others who, in an unthinking, uncritical, and unsupported manner, claim that capitalism has alienated, fragmented, and corrupted us. Second, she argues against those economists, including herself at one time, and others who believe in what she terms "Prudence Only." This is the view that ". . . capitalism is a matter of Prudence understood as ruthless self-interest . . . ." According to this view, our market activities should be motivated solely by rational self-interest. This motivation is justified because it is successful in terms of creating societal wealth and efficiency. Third, she agrees with the view many hold that capitalism both makes us better off and is consistent with a virtuous life that involves more humanity than Prudence Only allows. She takes this point a step further than most, however, by claiming that it actually promotes virtuous characters and is necessary for the development of a full, virtuous life.
Although I am in the role of critic here, I must confess my sympathy with much of McCloskey's project. I am in complete agreement with her rejection of both the clerisy and Prudence Only. I am less convinced, however, by her claim that the sort of capitalism she advocates best promotes the virtues. The primary focus of my comments will be on that claim.
McCloskey's view that capitalism makes us better off is not new, and, in my mind, is rather uncontroversial. Many have objected to it by pointing out that those persons who are at the bottom rungs of the socioeconomic ladder are not made better off by capitalism. Doing so, however, runs into at least two difficulties. First, it merely begins the seemingly endless debate over whether even those persons who are the worst off in a capitalist society are better off than they would be in a society with some other kind of economic system. To see how endless that debate can be, we need only consider how many have argued that John Rawls's difference principle supports capitalism because it makes the least advantage better off, while many others have argued that the same principle rejects capitalism because it does not make the least advantaged better off. Second, and perhaps more importantly, the objection misses the real point of the view. McCloskey and others do not hold the view that capitalism makes every single person better off, but, rather, they hold the view that it makes the society in total better off by creating greater progress in goods and services. Of course, objectors then can question whether that is the proper way to measure whether a society is better off or they can claim, following Jean-Jacques Rousseau, that despite such merits capitalism is not justified because it produces inequalities that ultimately enslave us. I am unwilling to lodge such objections, however, because I agree with McCloskey that the concerns in question are no more true of capitalism than they are of any other economic system.
The claim that the capitalist life is consistent with a virtuous life also is not new, and, again in my mind, is rather uncontroversial. It is obviously true that one can pursue profit and goods in the marketplace without losing one's humanity. There was a corner grocery at the end of the street on which I lived as a child. I remember once accidentally handing the owner too many $1 bills when I was paying for some candy. He handed the extra back to me and said, "son, you might need this later." He obviously pursued profit through his store, but doing so did not cost him his humanity. He had enough left to be kind to me. Likewise, Aaron Feuerstein clearly still had his humanity when he chose to keep 3,000 employees on the payroll with full benefits for three months after a fire destroyed Malden Mills. His desires for profits had not led him to ignore the needs of those who worked for him and the needs of the community at large. Nor, had desires for profits led Ray Andersen, the CEO of Interface Carpeting who decided to start moving his company toward full sustainability, to ignore the impacts of his business on the environment and future generations. In none of these cases has capitalism led the persons in question to ignore values and traits that give us humanity.
McCloskey's view that capitalism actually promotes the virtues, however, is more novel and controversial. This is because she believes that capitalism is necessary to develop the full, virtuous life that the ancient Greeks, most notably Aristotle, advocated. This view requires demonstrating not only that one can have a virtuous character while living the capitalistic life, but, also, that such a life pushes one toward the virtues in a way that no other economic system can.
This is a daunting task that McCloskey undertakes with various levels of success. With respect to demonstrating that capitalism promotes the virtues better than other systems, McCloskey is rather persuasive. This is most clearly the case when she criticizes the clerisy for romanticizing the past. She makes a strong case that life before capitalism was no picnic. She demonstrates several ways in which life is better for most people today under capitalism than it was in the past when capitalism was beginning to replace feudalism. Each of those ways plays a role in developing the virtuous life.
At that time, goods and services were much harder to come by and the lives of average people were not conducive to moral growth and development. McCloskey writes, "The amount of goods and services produced and consumed by the average person on the planet has risen since 1800 by a factor of about eight and a half." She adds,
An Irish peasant woman digging pratties in her lazybed in 1805 or a Norwegian farmer of thirty acres of rocky soil in Dimmelsvik in 1800 or the American daughter of poor English people in 1795 Massachusetts had brutish and short lives. Many of them could not read. Their horizons were narrow. Their lives were toilsome and bitter.
Such people clearly had little time or opportunities to develop their understanding of the world and the people around them. Without that kind of development, however, it is hard to see how they could be any better positioned to develop virtuous character traits than we are today. They had little opportunity to improve their lives or the lives of those around them. This is not to say that they could not live virtuous lives. Surely, many people lived virtuous lives prior to capitalism. The point, though, is that the clerisy often suggests that life prior to capitalism was an idyllic life that allowed people to live more virtuously than we can today. Given how difficult their lives were, McCloskey is correct to question why the clerisy holds this view.
Life is longer and healthier today. McCloskey writes, "Clean water, inoculation, better food, and penicillin purchased with the higher income raised the expectation of life at birth in the world from roughly 26 years in 1820 to 66 years in 2000 . . . ." Longer and healthier lives are at least as conducive, and probably more so, to developing virtuous characters than are shorter, unhealthy lives. One need only think about how much more the typical 45- or 55-year-old understands about people and the world than does the typical 25-year-old to see the relevance of longer lives to virtues. Likewise, one who lives a healthy life that is not spent constantly fighting disease is better positioned to develop one's life than is one who is unhealthy. Again, this does not mean that those who live short or unhealthy lives cannot be virtuous, but, rather, it means that they are no better positioned to be so, and probably have a more difficult time in many ways, than those with long and healthy lives.
McCloskey, however, occasionally lapses into her own romanticizing of capitalism. She writes,
A little farmer's market opens before 6:00 a.m. on a summer Saturday at Polk and Dearborn in Chicago. As a woman walking her dog passes the earliest dealer setting up a stall, the woman and the dealer exchange pleasantries about the early bird and the worm. The two people here are enacting a script of citizenry courtesies and of encouragement for prudence and enterprise and good relations between seller and buyer. Some hours later the woman feels impelled to buy $1.50 worth of tomatoes from him. But that's not the point. The market was an occasion for virtue, an expression of solidarity across gender, social class, ethnicity.
Although the story is charming, it romanticizes capitalism in a way that is just as problematic as how the clerisy romanticizes the past. Moreover, it plays into the hands of McCloskey's opponents. Both the clerisy and advocates of Prudence Only can claim that it does not paint a realistic picture of the market activities we face on a daily basis, and, thus, does not respond to the points they make in favor of their own visions of capitalism.
This does mean that there are no farmer's markets, nor does it mean that the kind of events McCloskey describes do not happen. I have gone to the farmer's market at Shaker Square in Cleveland many times and I have had encounters similar to that McCloskey describes. When I do, however, it feels like I am leaving our modern, capitalist society for a short while. Clearly, the farmer's market falls within the definition of capitalism McCloskey provides: ". . . private property and free labor without central planning, regulated by the rule of law and by ethical consensus." The farmers and customers engage in activities that fall within this or any other definition of capitalism. The problem is that such farmer's markets are far from the typical setting for our market activities today. They constitute an extremely small percentage of the capitalist encounters the vast majority of us have. The typical capitalist encounter is far less idyllic. Not all go badly or unpleasantly, but they are more likely to involve something like standing in a cashier line for several minutes only to be hardly acknowledged once you get to the end of the line until the cashier says something like, "that'll be $107.32. Cash or credit card?" Or, you have to tell the cashier several times that you do not need scratch remover to go with the CD you purchased and that you do not want yet another points card that you cannot fit in your wallet or ever remember to take with you to the store. Or, they involve something like being on the phone on hold for several minutes only to find out that the corporation from which you bought your defective DVD player wants to weasel out of its warranty.
The point is that the capitalism most of us know today is not the capitalism in McCloskey's farmer's market story. Nor, is it the capitalism of the earlier example of the corner grocery store in my hometown. That corner grocery no longer exists. Most people in Ardmore, Oklahoma now buy their groceries in the Wal-Mart Supercenter. My interactions in that Wal-Mart have been like those I describe far more often than they have been like that in McCloskey's farmer's market story. All this is not intended as a criticism of Wal-Mart or any other corporation, but, rather, as a plea that we be more realistic about the actual features of the capitalist society in which we live when we are critical of those who romanticize the past.
The fact that capitalism is not like the idyllic picture of the farmer's market raises another issue that is the most important point I wish to raise today. That issue is whether the kind of capitalism McCloskey advocates actually best promotes the virtues she has in mind. She writes, ". . . an unsubsidized capitalism works, and . . . state socialism, or a subsidized and regulated capitalism, does not." I do not question McCloskey's claim about socialism, but I do question her claim that unfettered capitalism best promotes virtues.
Undoubtedly, it is true that excessive regulation stifles progress and economic growth. That does not mean, however, that no tempering of capitalism in the form of reasonable regulation and prodding can be justified. Whereas McCloskey argues against such tempering, I argue that it is necessary both to produce a desirable world and to promote the very virtues McCloskey thinks capitalism promotes. Without such a tempering, those in the market would be driven by Prudence Only even more than they already are and McCloskey's virtues would become even more difficult to find.
The progress McCloskey points to time and again has occurred during a period in which capitalism has been regulated and prodded. In order to demonstrate how capitalism has promoted civic engagement, McCloskey writes, "Look at the ‘civic engagement' of Howard Dean's Internet-based campaign for the Democratic presidential nomination in 2003-2004, or the new unionism built on e-mail mobilization." Issues about how much government was involved in the development of the Internet and e-mail aside, McCloskey's own example shows that regulation has not prevented a crucial area of progress. Given that, it is not clear why she thinks we need to leave capitalism unfettered in order to bring about the progress in goods and services she admires.
More importantly, the moral progress that capitalism has given us is, in part, the result of the fact that we have tempered it. Clearly, McCloskey does not think that one should do anything one wishes to do in order to succeed in the marketplace. As we should expect from someone who advocates virtue ethics, she thinks there are virtuous and vicious ways to succeed and one should opt for the virtuous ways. Without a tempering of capitalism, however, there is little to keep us from falling into a kind of Prudence Only that ignores the virtuous ways. Reasonable regulation and prodding serve the important function of delineating the boundaries of what we should and should not do in order to succeed in our market activities.
The position I am adopting is consistent with the virtue ethics McCloskey espouses, especially with ideas found in Aristotle. Aristotle argues that we do not come into the world with either virtuous or vicious characters, but, rather, we acquire our characters through practice. He writes, "Virtue of character . . . results from habit . . . . [T]he virtues arise in us neither by nature nor against nature, but we are by nature able to acquire them, and reach our complete perfection through habit." Although we develop our characters through what we do, Aristotle does not believe we are left alone in this process. Society's systems of rewards and punishment and praise and blame play the important role of providing us with incentives to practice the virtues and avoid the vices. He writes, ". . . they impose corrective treatments and penalties on anyone who does vicious actions . . . and they honour anyone who does fine actions; they assume that they will encourage the one and restrain the other." This is exactly what the tempering of capitalism should do. Through reasonable regulation and prodding, it should provide us with the incentives to pursue our market activities in ways that conform to virtue rather than vice.
This is not to suggest, however, that all the regulation and prodding of capitalism that we see is reasonable. Often, it is unreasonable and fails to provide a justifiable delineation of the boundaries of what we should and should not do in order to succeed in our market activities. Recently, the state in which I live, Ohio, passed a referendum that bans smoking in all bars and restaurants. I am not a smoker and I have an extremely negative view of the activity that is no doubt driven in part by the fact that my father, a smoker, died of lung cancer at age 59. My life will be better with the ban as I no longer will have to avoid particularly smoky locations. Nevertheless, I question this regulation. Governments should not tell competent adults what risks they can take with their lives, nor should they tell businesses to what clientele they can cater.
Moreover, McCloskey is correct to claim that government involvement in the marketplace in the form of spending often does not go to the right people. She writes,
. . . if modern government were in fact effective in giving a hand up to the deserving poor, if most of its expenditure were on behalf of such people, I would be very much more happy with it. But as it stands in the United States the typical government program is more like road building than Head Start. It benefits politically well-connected construction unions and the owners of paving firms, not little kids from the inner city.
Like McCloskey, if I could reallocate government spending I would have more of it go to the deserving poor. This issue illuminates two ways, however, in which I disagree with McCloskey. First, government programs like Head Start do provide effective help for at least some people. I count myself as one such person as I was a Head Start kid. I would not have become a university professor had it not been for the skills and love of learning that I acquired in that program. It provided me with exactly the helping hand I needed. I cannot provide any evidence to support this claim for those who might call for it. I can offer only anecdotal evidence. It is interesting that I am the oldest of three brothers and the only one who attended college. This is interesting because I also am the only one who attended Head Start. My family no longer qualified for the program by the time the next brother was old enough. Of course, these facts prove nothing and there are many other possible explanations for them besides Head Start. Nevertheless, my feelings about what the program provided me should be given at least some weight when we consider the merits of government spending.
Second, McCloskey seems to think that funds going to the wrong people is a necessary outcome of government spending. Although it often is the case, it need not be so. To the extent that it is at any given time, we should use our power at the ballot box and our power of protest to change it. McCloskey's correct claim that government spending often goes to the wrong people does not argue for doing away with all tempering of capitalism. It argues for changing government spending in ways that will position more people for success in market activities.
A view McCloskey advances early and often throughout the book actually supports the kind of tempering of capitalism that I suggest. In connection with the undesirable outcomes of capitalism to which many people point, she writes, ". . . the bad things in a capitalist world are not all testimony to the badness of capitalism. Much of human good and evil arises from our fallen natures, and has nothing to do with the circumstances in which we are put. . . . [W]e must in our moralizing not mistake human failing for specifically capitalist failing." McCloskey is correct that we must blame people for the wrong they do within a system rather than blame the system itself. Just as we blame a football player, not the NFL, when he throws a punch or spits in the face of an opponent, we should blame people, not capitalism, when they are involved in wrongdoing in the marketplace. The pressing question, however, is why, given that she recognizes people will sometimes do wrong, McCloskey does not accept a capitalism tempered by reasonable regulation and prodding. After all, the NFL institutes rules to regulate what players can do on the field precisely because players will do more wrong without rules to guide their behavior. Reasonable regulation and prodding provides, in a manner consistent with Aristotle's views on the role of the systems of rewards and punishment and praise and blame, a similar guide to behavior in market activities.
Although I believe the views McCloskey adopts on the virtues throughout the book actually support my position here, this is most apparent in the chapter titled "Love and the Bourgeoisie." There, McCloskey argues that capitalism, like any human activity, requires a kind of solidarity. She writes, "An economic actor must have a social stage, since no contract can be explicit about every aspect of a complex transaction, or even of a simple transaction." She adds, "You can't run human groups on Prudence Only, not well. And ‘well' means not merely prudently and profitably. . . ." Capitalism promotes the virtues because they are necessary for activities that constitute the system. This, however, is precisely why we need a tempered, rather than an unfettered, capitalism. We must regulate and prod those who do not pursue market activities in virtuous ways on their own. We know there are such people. McCloskey acknowledges as much.
In the end, the difference between McCloskey and myself lies in a disagreement over the kind of capitalism that is necessary to promote virtuous character traits. We both reject the positions of the clerisy and advocates of Prudence Only. The remedy for McCloskey is an unfettered capitalism, while for me it is a capitalism tempered by reasonable regulation and prodding. I welcome her comments on this difference between us. I wish to thank her again for providing us with this excellent and delightful work.