Economics and Morality

I'm not an economist. I'm not going to pretend I know much about it (though it's an area I plan on investigating in the future). But it doesn't take much knowledge to realize that economics and morality are separate subjects  - even though they often intersect. If modern American society has a failing, it is that we often let our economic system make moral choices for us.

It is difficult for Americans to lead moral lives when they are told from the youngest age that your worth as a person is largely tied to your economic success. I'd like to think that most of us know this isn't really true, yet we don't bat an eye when businesses and institutions are allowed to behave as if economics are their only concern.

A lot of people (especially in my liberal bubble) like to blame capitalism for this. But capitalism is just an economic theory, and as such, it is amoral. In a free market, resources will be distributed efficiently through the laws of supply and demand. We have little reason to doubt this is not true. However, capitalism cannot answer the question of whether such a distribution of resources is moral.

In the same vein, government regulations are neither good nor bad as a whole. Each regulation needs to be judged on its own merits. Much like our individual freedom must be protected by certain laws, I believe a free market also needs to be protected by proper regulation. A complete lack of regulation does not result in a free market, but anarchy. But overregulation can also stifle markets in the same way that overly strict laws oppress people. It is a question of balance.

Yet for some reason, the idea of a free market as being free of regulation has become a sort of pseudo-religion for some people, as if business should be free from the shackles of morality in pursuit of the all mighty dollar.

This inability of some people to make a sufficient distinction between economics and morality creates a lot of political conflict. There are several issues that generate fruitless debates because the two sides are trying to answer different questions. We saw a great example of this when Senators Bernie Sanders and Ted Cruz debated America's healthcare policy this past week.

I personally like Senator Sanders, but he is a lousy debater. His main argument is generally that universal healthcare is a right. I agree. But this is a moral argument. I think almost all people would agree that everyone should have good healthcare. But there is plenty of evidence around the world that universal healthcare can also be practical and he missed his opportunity to make these arguments. Senator Cruz's arguments, on the other hand, were more practical (if occasionally disingenuous about the effectiveness of universal healthcare in other places), centering on the difficulty of how to pay for it. This is an economic argument.

This is not a real debate because they were answering two different questions. Senator Sanders was attempting to answer the question: Should all Americans be provided with healthcare? Senator Cruz was attempting to answer the question: How do we pay for health care in America? Their positions are not mutually exclusive. They could both be right (or wrong).

I believe this is true for many issues in America. The two sides are answering slightly different questions, so oftentimes they both might actually be correct. If a progressive argues that it is morally right to have a stronger social safety net, and a conservative argues that will hurt us economically, they might both be correct. It's a question of priority. Is morality more important to you or economics?

But that's not the simple question it seems, because the two are linked. It may be tempting to do what we believe is right, but everything has a cost. And that cost may mean that we are able to do less good in the future. Once again, the word of the day is balance. Neither socialism nor capitalism are the answers. We need a balanced system where we are able to do good now but not at the cost of being able to do good in the future.

In other words, we need compromise.