Here’s a nice post on the Undercover Economist’s blog about a question asked by the John Templeton Foundation, “Does the free market corrode moral character?”
Later in the post Harford (the Undercover Economist) references a study that demonstrates people from more free market-like economies cooperate better than those from less free market-like economies.
These results surprised some. I suppose that’s because conventional wisdom is that free markets is “everybody-for-yourself”.
I was not surprised. My view on capitalism differs from conventional wisdom. In my view, capitalism is made up of mutually beneficial, voluntary transactions. In other words, it rewards cooperation.
To be mutually beneficial, both sides of a trade feel they were made better off for making the trade. Also, since trades are voluntary, either side can decide not to trade if they don’t believe a trade will make them better off. That sounds like cooperation to me. Bill Gates got better off by making us all better off with the products his company produced. You may not be reading this on a computer today if it wasn’t for Mr. Gates.
Humans are naturally self-interested creatures. That’s not bad. We have to be. We need a safe place to lay our heads at night. We need to eat.
This isn’t greed. Capitalism encourages us to serve the self-interests of others in order to serve our own self interests.
In less free market-like economies, serving others to serve your self-interest isn’t rewarded. To serve their self-interests people resort to less mutually beneficial and voluntary means such as coercion, stealing and power accumulation.