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2-Economics Work and ProperityThe fol­low­ing essay ap­pears in the final chapter of Russell Kirk’s textbook Economics: Work and Prosperity (Pensacola, Fla.: A Beka Book Publications, 1989), pp. 365–368.

Some people would like to separate economists from pol­i­tics, but they are un­able to do so. Another name for eco­nom­ics is po­lit­i­cal econ­omy. As we mentioned in earlier chapters, a sound economy can­not exist with­out a po­lit­i­cal state to protect it. Foolish political interference with the economy can re­sult in gen­eral poverty, but wise political encouragement of the economy helps a society toward prosperity.

Similarly, some people would like to separate economics from morals, but they are unable to do so. For unless most men and women recognize some sort of moral principles, an economy cannot function except in a small and precarious way. Moral beliefs, sometimes called moral values, make possible production, trading, saving, and the whole economic apparatus.

All human creations and institutions have some connection with moral ideas and moral habits, for human beings are moral creatures. Concepts of right and wrong haunt us in everything we do—whether or not we wish to be concerned with moral questions.

So it is that the final section of this final chapter of [Economics] on the first principles of economics suggests that material prosperity depends upon moral convictions and moral dealings.

Adam Smith, the principal founder of economic science, was a professor of moral philosophy. He took it for granted that moral beliefs should affect economic doings.

The success of economic measures, like the success of most other things in human existence, depends upon certain moral habits. If those habits are lacking, the only other way to produce goods is by compulsion—by what is called slave labor. Let us examine briefly some of the moral qualities that make possible a prosperous economy.

Any economy that functions well relies upon a high degree of honesty. Of course, some cheats and charlatans are found in any society, yet on the whole, in a prospering economy most people behave honestly. “Honesty is the best policy,” Benjamin Franklin wrote in the eighteenth century, echoing an old English proverb. He means that honesty pays, in an economic sense.

For any advanced economy is based upon contracts: agreements to sell or to buy, promises to pay, deeds of sale, all sots of “commercial instruments.” Many commercial contracts are oral, rather than written. Today’s markets especially depend upon implied con­tracts (as distinguished from detailed writ­ten contracts). You may have seen a public auction, at which a bidder may pledge a large sum of money merely by raising one hand or nodding his head. The auctioneer trusts the bidder to keep his promise to buy at a certain price. On a much vaster scale, the complex apparatus of stock markets depends on such implicit contracts—and on ordinary honesty.

On the other hand, those societies in which theft, cheating, and lying are common do not ordinarily develop successful economies. If production and distribution can be carried on only under armed protectors and without any certainty of being paid, then lit­tle will be pro­duced and dis­trib­uted above the level of sub­sis­tence. When bar­gains are not kept and loans are not re­paid, prices are high and in­ter­est rates are higher—which dis­cour­ages pro­duc­tion and dis­tri­b­u­tion.

An­other moral qual­ity or habit im­por­tant for the suc­cess of an econ­omy is the custom of doing good work—of pro­duc­ing goods of high qual­ity. The Ro­mans had a word for this: in­dus­tria, a moral virtue, from which our Eng­lish word in­dus­try is derived. Goods should be pro­duced, and ser­vices ren­dered, for the sake of turn­ing out some­thing sat­is­fac­tory or even ad­mirable—not for the sake merely of cash payment. This af­fec­tion for qual­ity is bound up with the hope of pleas­ing or help­ing the pur­chaser or cus­tomer: doing some­thing kindly for other peo­ple, even though producer and dis­trib­u­tor may never see most of the cus­tomers. This be­lief in working faith­fully and well is con­nected with the virtue called char­ity. For char­ity is not a hand­out, pri­mar­ily; the word means “ten­der­ness or love, af­fec­tion for other people.” The pro­ducer who cre­ates first-rate goods is serv­ing other peo­ple and can take satisfaction in that service.

One more virtue of the marketplace is a kind of courage: what the old Romans used to call fortitude. This economic courage in­cludes the will­ing­ness to take risks, the ability to en­dure hard times, the tal­ent to hold out against all the dis­ap­point­ment, harassment, in­grat­i­tude, and folly that fall upon peo­ple in the world of get­ting and spend­ing.

It would be easy enough to list other moral be­liefs and cus­toms that are part of the foundation of a pros­per­ous econ­omy, but we draw near to the end of this book. So in­stead we turn back, for a mo­ment, to one vice we dis­cussed ear­lier—and to the virtue which is the op­po­site of that vice.

The vice is called envy; the virtue is called gen­eros­ity.

Envy is a sour emo­tion that con­demns a per­son to lone­li­ness. Gen­eros­ity is an emotion that attracts friends.

The gen­er­ous man or woman is very ready to praise oth­ers sin­cerely and to help them in­stead of hin­der­ing them. Gen­eros­ity brings ad­mi­ra­tion of the achieve­ments and qual­i­ties of other peo­ple.

Now, gen­eros­ity, too, is a moral qual­ity on which a sound econ­omy depends. Producer and distributor, when they are moved by generosity, do not envy one another: they may be competitors, but they are friendly competitors, like contestants in some sport. And in a society with a strong element of generosity, most citizens do not support public measures that would pull down or repress the more productive and energetic and ingenious individuals.

A spirit of generosity toward others is still at work in America. But in much of the world, a very different spirit has come to prevail. In Marxist lands, envy is approved by the men in power. Private wealth and personal success are denounced on principle. The Marxist indoctrinator deliberately preaches envy. By appealing to that strong vice, he may be able to pull down constitutions, classes, and religions.

Because the mar­ket brings sub­stan­tial suc­cess to a good many in­di­vid­u­als, the Marxist hates the market. A consistent Marxist declares that when two people exchange goods in any market, both are cheated. Yes, both—that is what the Marxist says. Exchange it­self is “capitalist oppression,” the Marxist propagandist pro­claims. Certainly there is little profitable ex­change in Communist countries. Envying the market’s popularity and success, the Marxist denounces the market furiously.

In the long run, the en­vi­ous so­ci­ety brings on pro­le­tar­ian tyranny and gen­eral poverty. In both the short run and the long run, the gen­er­ous so­ci­ety en­cour­ages political freedom and economic prosperity.

Also, a successful free econ­omy makes pos­si­ble ma­te­r­ial gen­eros­ity: it cre­ates a mate­rial abundance that gives wealth to private charities and en­ables the state to carry out measures of public welfare.

From the gen­er­ous so­ci­ety comes plenty. The old Greeks often rep­re­sented in their sculp­tures and paintings the symbol of the cornucopia, the horn of plenty, a large goat’s horn overflowing with flowers, fruit, and grain. To this day, the cor­nu­copia is the symbol of a prospering economy.

The American market economy, what­ever its short­com­ings, has put a cor­nu­copia into most households in the United States. The rewards of the market economy have been generous.

If the horn of plenty is to con­tinue to over­flow with good things, it must be cher­ished with courage and intelligence. Crush­ing tax­a­tion, im­pru­dent med­dling, ma­li­cious envy, or revolutionary violence might de­stroy the horn. To pro­tect the cor­nu­copia, it is necessary to understand economics tolerably well. Otherwise, a society of generosity may give way to a society of envy.

In our time of troubles, many strange economic doctrines are preached. Yet there is reason to believe that the productive market economy will be functioning well a century from now. The errors of command economies and the blunders of utopian welfare states have be­come obvious to a great many people, while Adam Smith continues to make economic sense. So long as many people work intelligently, with good moral habits, for their own advantage and for the prosperity of a nation, an economy will remain healthy. But hard work and sound habits may be undone by foolish public policies or by the violent envy of totalist states. There is a strong need for watchfulness on behalf of the economy.

This book has not been able to tell you every­thing about the Goose with the Golden Eggs. But we have been able to offer some in­formation about the care and feeding of this creature; and we have cautioned you not to slaughter her.

Nowadays this Goose goes by the name of Mar­ket Economy. It seems probable that she still will be preening her feathers when you are ready to take your part in the world of work. If you treat her kindly and intelligently, she will continue to lay for you.

Books on or by Dr. Kirk, including the book Eliot and His Age, may be found in The Imaginative Conservative Bookstore. Essays on or by Dr. Kirk may be found here.  

This essay was published in The University Bookman and is posted here with their permission.

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