Adam Smith's virtues revived
by William H. Peterson
Adjunct scholar with the Heritage Foundation.
Another "Professor of Moral Philosophy" à la Adam Smith at Glasgow University in the 18th century? Hopefully. But no hint in the academic title, "Capitalism and Commerce" by Edward W. Younkins, professor of accountancy and business administraton at Wheeling Jesuit University in West Virginia, a man who sees capitalism resting on a solid moral foundation of voluntarism and contractualism.
His book sings the logic and workings of back-to-basics libertarianism. It is a welcome moral play, an antidote to a rising tirade of business-and-capitalism-bashing amid a rash of corporate scandals such as Enron, WorldCom and Global Crossing. Mr. Younkins sees the stock market, however bubbly and seesaw overall, largely policing itself as these ne'er do well firms quickly suffered steep stock price drops, thus punished far more swiftly than could Congress or the SEC.
Hints of moral insights in the Younkins approach to capitalism and commerce can be inferred from his post at a Jesuit institution, his founding the university's degree program in political and economic philosophy, his editing a collection of Templeton Prize winner Michael Novak's essays entitled "Three in One: Essays on Democratic Capitalism, 1976-2000," his many contributions to the Foundation for Economic Education's free-market monthly Ideas on Liberty.
Neither Adam Smith then nor Edward Younkins now show any delusions of business moral stamina resisting state temptations a la tariffs. The economic scenario in the 18th and 21st centuries, apart from most other periods, is one of special interests, including the power-corrupted state itself, all talking up money or other support to politicians who listen tantalized — and often give up in a long day of moral relativism.
Mr. Younkins defines capitalism then as, ideally, uncompromising laissez-faire and centers the duty of a minimal state as but precluding any one person from using force or fraud against another person. Our author sees the free market reinforcing a free society rather than just a pragmatic network of efficient production.
Mr. Younkins embraces the Adam Smith metaphor of the Invisible Hand of self-interest serving the public interest, to wit a line in "The Wealth of Nations" (1776) that "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner but from their regard to their own interest."
So Mr. Younkins, in the vein of Milton Friedman's 1962 blockbuster, "Capitalism and Freedom," would repeal tariff, antitrust, licensure and income tax laws. While for a strong defense, he would drop the idea of America as the world's policeman. He would privatize Amtrak, the Post Office, Social Security, air traffic control, local garbage pick-up and disposal, and so on.
He says a free society needs a secure private sphere so the individual can pursue his freely chosen peaceful norms, actions and ends — without the arbitrary intervention of others. Mr. Younkins adds, here can be no morality without responsibility and no responsibility without self-determination. Responsible self-determination implies honesty, rationality, self-control, productiveness and perseverance.
So Mr. Younkins sees capitalism as a creature of morality. He holds only individuals can be moral agents, that government's job is not to regulate business but to sustain market preconditions such as private property rights. Such a job was attained by America's Founders but got lost in a rush of state mistakes like the 16th Income Tax Amendment of 1913 and the New Deal's adoption of a Welfare State, a fateful move.
Society thrives in a pure capitalist order as its members act by mutual agreement and mutual advantage. Indeed, per Ludwig Mises and Edward Younkins, society becomes a "consumer democracy" as consumers — with their powerful power of the purse — rule over entrepreneurs and capitalists. So innumerable voluntary trades daily build up social cooperation, as producers and consumers vote their dollars over and over in an endless plebiscite.
Mr. Younkins gets off similar insights as he applies his moral framework to a host of social institutions, among them — each with a chapter and bibliography — the state (minimalist only), civil society (no group rights, only individual rights), private property, contracts, law, work, labor unions (voluntary only), corporations (not state-created as the state has but to recognize and record their free formation), corporate governance, justice, technology, entrepreneurship (advancing a positive-sum world), and mainly political no obstacles to a free society."
Hopefully "Capitalism and Commerce" will attract intellectuals on the left and right here and abroad to rectify or reinforce their own thinking. Hopefully it will also be adopted on the campus here and abroad as a textbook with foreign editions and translations.
Can morality and laissez-faire capitalism save a shaky and shady world? Hopefully. Recall an apt old IBM motto: "World Peace Through World Trade."
CAPITALISM AND COMMERCE: CONCEPTUAL FOUNDATIONS OF FREE ENTERPRISE