Preaching the Morality of Capitalism

This year, bashing the immorality of unfettered markets has been in vogue. It is high time to turn that debate on its head.

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By Ray Hennessey


Opinions expressed by Entrepreneur contributors are their own.

On the eve of Christmas Eve, otherwise known as the Obamacare enrollment deadline, it seems fitting to ask why those who support and defend the free markets seem so afraid to embrace the moral foundation of their arguments.

It has been a tough year for capitalists and business owners. Obamacare has created enough uncertainty to dent consumer spending. States and cities, fueled by big-money union financing, have passed new minimum-wage laws. No less a leading light than Pope Francis has been critical of profits and capitalist practices, if not principles.

The attacks come from different areas, but there is a common thread: Free-market ideas are wrong because they don't have God on their side. Those who back businesses do so at the expense of the dignity of the worker or the citizen. Poverty is created by income inequality, which is fueled by the agnosticism of greedy market principles. Capitalists hate kittens.

Related: What Role Should Religious Values Play in Business

Yet, faith and markets can go hand in hand. And they do. Just look at the flipside: Some of the very programs heralded as being most moral because they fetter markets are actually harmful to many of the people they were designed to protect.

Exhibit A is the Affordable Care Act. What you are seeing with Obamacare is yet another example of the moral failure of socialist policies. Too strong to use the "s" word? Well, look at it this way: The reason many citizens lost the coverage they had (and we told they could keep) was that everyone needed to have the same kind of coverage. This uniformity required required that these same citizens needed to pay more for it - to subsidize others who don't have coverage at all. The goal is to ensure that everyone gets insurance, and it is the requirement of every citizen - a requirement enforced by the IRS - to pay for this equality.

That is classic wealth redistribution: Some pay more so others who don't pay get access to the same things. Wealth redistribution is in vogue in some quarters, since we still hear that the rich need to pay their "fair share" in taxes or wipe out profits to pay employees more. But, with the Obamacare flavor of wealth redistribution, it isn't the rich who are asked to pay more. Rather, it is just about everyone with a job.

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This is taking from the middle class to pay for the lower class. In truth, that is always the dirty little secret of socialism: Sure, it comes under the banner of "tax the rich," Robin Hood rhetoric, but any economist would fail a polygraph test if he said the rich had enough wealth to support the poor. Wipe out all the capital of the wealthiest, distribute it evenly among the poorest, and you will not solve poverty, in this country or anywhere else. Instead, you have to target the middle class. It is these hard-working people, supporting their own families, who are forced by the state to take what they have earned and give to others, all in the interest of equality.

And if they resist, they are called immoral. Think about it: People who expressed objections to the economics of Obamacare were derided as being against health care itself. It wasn't that you wanted more precise calculations for how Obamacare would be paid for. It was that you wanted your fellow citizens - children even - to get sick and be denied care. To fight Obamacare was to root for the illness and death of your fellow man. To oppose it was immoral.

Now, I would argue, Obamacare as it is written and practiced is immoral to support. The administration, in botching the launch and trying to save face, last week said many people could simply go without insurance, because it was too expensive or too hard to get. That's because it has increased the number of uninsured. Obamacare, which succeeded on the moral argument of health care for all, is now failing that same moral test by taking away the health care of millions of people. True, this may be temporary, but it should not have happened at all. Obamacare isn't just a victim of mishandling, it is failing because of poor design.

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So why aren't opponents now seizing the moral high ground? Well, even on the right, there is a hesitancy to mix morality (and, more bluntly, the faith and belief that underpins a moral compass) with policy. This is particularly true of libertarians, many of whom very organized religion as analogous to the state, as a trading-off of one orthodoxy for another.

But, unless free-market proponets start talking about their positions from the moral lens, they will continue to be shouted down, by Pope Francis all the way down the union organizer. It should be the natural argument, because there is an inherent morality to capitalist principles. Take objections to minimum-wage hikes. If you are against minimum wage, you are attacked as being anti-worker and pro-poverty, as someone who wants hard-working people, particularly immigrants, to starve to death. But, most opponents to minimum-wage hikes feel that way because of fears that the business impact would eliminate some jobs and put people out of work altogether. Nothing leads to poverty faster than unemployment. It isn't greed, but rather legitimate concern that policy change would have an adverse moral outcome.

And, since we brought it up, let's talk about greed. Avarice is a deadly sin. But the pursuit of profit, for yourself and your business, is not inherently avaricious and therefore not sinful. Yes, we Christians grew up hearing the admonition that it was easier for a camel to pass through the eye of a needle than for a rich man to get into heaven, but experience tells us that the wealthy can do great things for many people. The Bill & Melinda Gates Foundation is a leading force in eliminating poverty and helping fight disease in the developing world, thanks to wealth acquired through Microsoft's profitability and innovation. Closer to home for me, the NYU Langone Medical Center in New York City is one of the leading centers of biomedical research thanks to Ken Langone, the founder of Home Depot, opponent of Obamacare and refreshingly unrepentant capitalist. Charity is fueled by the accumulation of wealth. It isn't a blind pursuit of profit either. Rather, many, because of a knowledge of their moral and religious responsibilities, build profitable businesses with a seeing eye toward helping others and improving society.

One would hope the Pope recognizes this, too. The Church's mission cannot succeed without charity from those who have acquired wealth, distributed to those who need it on the diocesan level. Catholics love profit. That's why you can't get three of us together in one room without holding a 50-50.

Free markets free people. Controlled economies do not. In fact, morality and religion have to be rejected to allow for socialism. That is why Marx was so antagonistic toward religion, which he referred to as "the impotence of the human mind to deal with occurrences it cannot understand."

That has left an open playing field for market libertarians to embrace morality in their arguments. Hopefully, they find a little religion.

Related: Ronald Coase, Lighthouses and Elon Musk

Ray Hennessey

Former Editorial Director at Entrepreneur Media

Ray Hennessey is the former editorial director of Entrepreneur.

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