Turning Again to Adam Smith to Defend Capitalism

Yuval Levin explains why an 18th-century expert’s insights still offer value in the debate about capitalism’s benefits.

We live in an era of collapsing public confidence in the foundations of our way of life, and the market economy has been no exception. Polls show declining support for capitalism, especially among the young. …

… The most serious complaints are not fundamentally economic but moral. This sometimes is not obvious, even to the people lodging them. But arguments about inequalities of wealth or power, cronyism and special-interest influence, a shallow consumerism that corrupts the soul and undermines the dignity of work, a stateless cosmopolitanism that neglects national priorities, and a commitment to creative destruction over protective preservation are arguments about the ends of capitalism at least as much as its means. …

… It is important to make people aware that the market system has brought billions out of desperate poverty—and continues to do so. This is essential to the moral case for capitalism and an answer to the shallowest charges against it. But if the market were, as some of its critics suggest, a great machine for replacing material poverty with moral poverty, then evidence of its success in reducing deprivation would not be proof against the charge that it produces depravity. Similarly, evidence of economic growth is not an answer to the charge that overall prosperity comes at costs to some Americans that should be unacceptable to all of us.

The deepest challenges to capitalism therefore have to be answered on the grounds of morality, dignity, and justice. Such a defense would have to begin by shedding light on the market system’s moral goals and premises. And while these are not hard to discern in the thought of capitalism’s intellectual progenitors, they are actually not frequently articulated by its contemporary champions. To recover them, we would be wise to recur to those progenitors—and maybe especially to the thought of the man most identified with the original conceptual case for capitalism: Adam Smith.