We continue our publication of Steve Talbott’s book, with a series of excerpts. Here he discusses the role of ethics in the market.

“It’s a strange and pernicious notion that has been foisted upon Western society by economists: you and I, they tell us, by giving free rein to greed, selfishness, competitive malice, and megalomania, perform a valuable public service. We can spend our days pitting ourselves against the welfare and livelihood of others, and trust “the market” to transform our venality into a public good.

How could this grotesque belief – the belief that private vice equals public good – gain such widespread acceptance? How can we blindly assume a kind of alchemical transformation going on all around us when we never actually see it at work in concrete situations?

When I show disrespect to my wife, or compete with her in a manner that puts my interests above hers, or try to coerce her choices without her knowledge, the result is never an increased good for our society of two. It is more like hell. And the same thing holds for our larger family, and for our neighborhood. It also holds among co-workers at the office and
when friends and neighbors sell things to each other at a local bazaar. In fact, it holds wherever people have to do with people.

To say all this is not to impugn the market. Quite the contrary. It is to say that the market is such a critically important human achievement that what we do there actually matters. That’s why our greed makes a difference. To rejoice that capitalism unleashes the creative power of
millions of individuals is quite proper; to turn around and sheepishly say, “Now that the individual has been unleashed, it turns out that it doesn’t matter much what the hell he does” – well, then, why all the fuss about the creative potentials of the individual in the first place? Or
have we discovered some new sort of creative power with the potential for good but not for evil?

No, capitalism does not harness greed and turn it into good. What it harnesses is diverse individual choice and initiative, which it weaves, without central planning, into a collective tapestry. This is its great and absolutely essential virtue. But the virtue in no way obviates the fact that the tapestry, beautiful or soiled, depends on those individual choices, beautiful or soiled. When the choices are driven more and more by greed, society sickens – precisely because capitalism grounds society so fundamentally upon the free individual’s choices.”

(Abridged from “A Taste for Number Magic”, chapter 20 of Devices of the
Soul by Steve Talbott.)