The Freeman
March  2004

Capitalism and Commerce: Conceptual Foundations of Free Enterprise 
Reviewed by Tibor R. Machan  
Professor at the Argyros School of Business and Economics at Chapman University. 

As readers of this publication are likely to be well aware, capitalism and commerce aren’t very popular with most intellectuals and academics. One cannot dispute the generalization that the bulk of textbook authors and writers of scholarly works, not to mention college and university teachers in the field of business ethics, are mainly business bashers. 
One harmful result of this sorry situation is that over the last several decades – during which college students have increasingly taken courses in business ethics – the topic has been taught mostly by those who are hostile to both capitalism and commerce. The major journals in the field are filled with critiques of all aspects of free-market capitalism and the kinds of commerce it makes possible. 
This work is rare, then, for placing on the record a straightforward, accessible explanation of the nature of capitalism and the moral and conceptual foundations in support of the commerce that takes place in such a system. The book is eminently suitable for use in an introductory or intermediate course on business and society, business ethics, or the philosophy of economics. 
The author, a professor of accounting at Wheeling Jesuit University, begins by noting that freedom – as understood in the classical-liberal tradition that unleashed capitalism all across the globe – is not primarily a means to spur wealth production, as most classical and neo-classical economists, since Adam Smith have understood it. Rather, it is a prerequisite of morally significant conduct itself. 
If what you do is coercively imposed on you – as per the zillions of government regulatory and tax measures of the welfare state – there is no moral significance to your actions. Only to the extent that such coercive force is escapable and human beings are able to act on their own volition is their conduct morally significant. This is when we can be justifiably either credited or blamed for what we do. More precisely, only when we act feely are we able to exercise moral judgment. And, by extension, only in a capitalist economic system can there be a moral dimension to economic life – which means, significantly, that there is no such thing as generosity, compassion, or charity without liberty. 
In Part I Younkins discusses the basic framework of a capitalist economy (“Individuals, Communities, and the State”). In Part II (“Ownership”) he covers the right to private property and its implications for various areas of capitalism, such as contract, work, labor unions, corporations and business in general. Part III deals with what Younkins dubs “Progress,” namely, entrepreneurship and technology. Part IV turns to the legal infrastructure required for the capitalist system to operate both justly and efficiently. Then in Part V Younkins faces the critics (“Obstacles to a free society”); for me this was the most interesting and stimulating section of the book. Finally, in Part VI, the author summarizes his thesis and assesses the prospects for the system he has so aptly described and supported with an impressive array of sound arguments. 
The book is not only a fine way for anyone to get a good grasp of the moral case for capitalism – a case in constant need of reiteration since even its most prominent defenders, academic economists, do not appreciate it much. It also provides a wealth of information on what literature is available for developing one’s understanding of the myriad topics related to the main theme. There’s a rich bibliography following each chapter, as well as a useful Appendix, “A Reader’s Guide to Free-Market Organizations and Periodicals.” 
Now if there were also an effective marketing campaign to get this work to outshine all the business-bashing competitors that continue to pollute millions of young minds about the nature of freedom and the free-market system. Certainly Professor Younkins has given us a fine product with which to undertake such an effort. 
Copyright © 2004 / All rights reserved • Back to Edward W.Younkins' Homepage