Markets and the Good   /   Fall 2023   /    From the Editor

Introduction: Markets and the Good

Thinking beyond the tyranny of economics.

Jay Tolson

Illustration by Aaron Bastin/Alamy Stock Photo.

Only three decades ago, amid what was hailed as a new “Springtime of Nations,” post–Cold War exuberance fueled widespread confidence in the triumphant spread of liberal democracy and free-market capitalism to all parts of the globe, including those few remaining redoubts of “truly existing socialism,” with their fusty politburos and dysfunctional command economies. The brutal 1989 Tiananmen Square crackdown notwithstanding, even the People’s Republic of China was thought to be on the road to democracy thanks to its earlier adoption of a hybrid form of capitalism with “Chinese characteristics.” Though not alone in predicting that the opening up of China’s economy would lead to the liberalization of its politics and society, the editorial pages of the Wall Street Journal were among the louder cheerleaders for that optimistic line of economic determinism. If only they had been right. Among the disappointments of more recent years has been the sight of China not only backsliding but, in some respects, becoming more resolutely authoritarian, with Xi Jinping exercising the kind of strongman rule not seen since the days of Mao Zedong. Similarly, economic liberalization did nothing to prevent Vladimir Putin’s construction of his “power vertical” and his gradual dismantling of anything but nominal (or “managed”) democracy.

But the temptations and perils of putting economics first are certainly not limited to our last, disappointing round of “end of history” forecasting. The lineage of thinking that places economics at the determinative center of both our individual and collective lives extends to the foundations of the modern liberal tradition. In the second of his Two Treatises of Government, first published in 1689, John Locke memorably enshrined property (or “estate”) as the third inalienable right, after life and liberty. Much scholarly ink has been spilled over why Thomas Jefferson changed it to “the pursuit of happiness” in the Declaration of Independence, though Locke himself had used the phrase in his Essay Concerning Human Understanding, which appeared in the same year as Two Treatises. At the very least, though, it is clear that those early modern thinkers believed that “property” was essential to any meaningful pursuit of happiness. For his part, Adam Smith, a moral philosopher even more than a political economist, believed that the pursuit of self-interest through free exchange built virtuous character, as long as self-interest, distinguished from selfishness, was properly understood as being consistent with justice. In Smith’s view, private property and the free exchange of goods and services secured not only individual liberty but a just social order and a flourishing nation.

What the classical liberal thinkers did not anticipate were the transformations that would be brought about by rapid industrialization and an increasingly globalized economic order dominated by finance and the corporation—processes that would contribute to what the sociologist Karl Polanyi called the “disembedding” of the economy from the dominant institutional and cultural forms of society. Nor did the early liberal thinkers foresee the social dislocations and unrest that would come with the rise and exploitation of an industrial working class. The emerging critiques of the capitalist order by Karl Marx and others would not only challenge but demonize many of the fundamental tenets of laissez-faire liberalism, Pierre-Joseph Proudhon, the father of anarchism, declaring that “Property is theft.” But only in the early twentieth century did communist and fascist regimes emerge as rival powers to what might be broadly termed the liberal community of nations.

Indeed, in 1938, at what came to be known as the Walter Lippmann Colloquium, (inspired by the recent publication of Lippmann’s book An Inquiry Into the Principles of the Good Society), leading intellectuals gathered in Paris to consider, among other things, how the shortcomings of classical laissez-faire liberalism had contributed to the rise of authoritarian and hypernationalist regimes. Born in response to the crisis of Western democracy, neoliberalism found even more vigorous support in the 1947 postwar Mont Pèlerin conference in Vevey, Switzerland, organized by Friedrich Hayek. Contrary to what neoliberalism came to be associated with, the members of the Mont Pèlerin Society were originally concerned less with limiting the regulatory or redistributive functions of the state than with preventing acute class and social tensions resulting from various economic crises. One solution they put forward was an international rules-based free-trade system. With the help of international bodies such as the World Bank, this system was intended to foster prosperity and help participating nations limit inequality and handle inevitable swings of the economy.

Critics of neoliberalism charge that its emphasis on markets over all else progressively gutted vigorous democracy, replacing it with the rule of technocrats working hand in hand across government and private sectors. However valid that critique, certain features of neoliberal thinking were, arguably, contributing factors in the three decades—les trentes glorieuses, as the French called them—of widely shared prosperity that followed World War II. But with more fundamentalist neoliberals of the “Chicago school,” championing efficiency and profitability above other social and national goods, policies supporting or condoning union busting, deregulation, downsizing, and offshoring in the name of free trade and comparative advantage began to create the kind of socioeconomic inequality and divisions that inflame politics today, and not only in the United States.

How, then, do we think beyond what has come to be the tyranny of economics—or perhaps more accurately, how do we put economics in its proper place? Coming at these questions from different angles and different first principles, our authors variously dissect formative economic doctrines (see Kyle Edward Williams, “The Myth of the Friedman Doctrine”) and propose restoring the genius of the American system of capitalism (Jacob Soll, “Hamilton’s System”) or revising the purpose and priorities of the corporation (Michael Lind, “Profit, Power, and Purpose”). Others, in turn, prescribe restraints for the excesses of liberalism (Deirdre Nansen McCloskey “An Economic Theology of Liberalism”) or even an alternative to it, in the restoration of “common good” thinking associated with subsidiarity (Andrew Willard Jones, “Friendship and the Common Good”). Yet others examine how “burnout” and “emotional labor” became status markers and signs of virtue that weaken solidarity among workers of all kinds (Jonathan Malesic, “How We Obscure the Common Plight of Workers”) or the subtle ways in which we have reduced ourselves to cogs in our economic system (Sarah M. Brownsberger, “Name Your Industry—Or Else!”). Collectively, our authors suggest, the reluctance to question and rethink our fundamental economic assumptions and institutions—and their relation to other goods—may pose the greatest threat to real prosperity and human flourishing.