Description:

The market is simply the sum total of voluntary exchanges between individuals in the economy. The process of voluntary exchange both reflects and encourages social cooperation. Economists like Ludwig von Mises recognize the market as the cornerstone of civil society. These mutually beneficial associations between people result largely from specialization, division of labor, and trade. As a result, it is no wonder that markets promote peace, cooperation, economic prosperity, strong character, and social progress. Free markets are a necessary ingredient for achieving a humane and just society.

In this lesson, students will watch a video that explains the importance of freedom of choice. Free markets are compatible with enabling people to develop their humanity and work towards achieving what they believe is important as they pursue their own plans. Next students will read an article entitled “Markets and Morality” by Peter J. Hill. Finally, students will read a story about a man from humble beginnings who achieved life-changing success as an entrepreneur serving people in the market.

 

Time Required:

45 min

 

Required Materials:

Internet connection, writing instrument 

 

Prerequisites:

Lesson 7.1 – Virtue and Entrepreneurship

7.3.A – Watch and discuss the following video using the questions below to guide your discussion [10 min]:

Video:(Learn Liberty, 1:49min)

“What is the value of free will and the ability to make your own choices? Prof. James Otteson recalls a parable his teacher taught him in high school. If you had the ability to make a woman fall in love with you, would you like it? Would you prefer to force someone to love you or to have someone offer to give their love to you freely? Love freely given is so much more valuable. This story illustrates an important moral insight: Respecting people means allowing them to make their own choices, even if you believe the choices they will make are poor. Without the ability to choose for ourselves, we lose a bit of what makes us human. Do you find it frustrating when you are not allowed to make your own decisions? What would you do differently if people or government were not preventing your actions? Do you think you're better or worse when your choices are limited or taken from you?”

Discussion Questions: Free Will and Human Dignity: A Love Story

1.  What does Professor Otteson say it means to respect a person as a moral agent?

  1. It means to give the person the respect to choose for themselves.
  2. Moreover, it means giving the person the opportunity to choose even though sometimes they may make bad choices.

 

2.  How are respect for human dignity and allowing people freedom of choice related to one another?

  1. Freedom of choice is a key part of what makes us human. Seeking to impose your will on others is demeaning.
  2. It takes away part of what it means to be human when you command obedience and do not allow people to make their own choices.

 

3.  Do you think people should be allowed to exercise their freedom of choice? Are there constraints that should be placed on freedom of choice? (What if they might harm others? What if they might make a choice they will regret later?)

 

4.  Are there times when commanding obedience is acceptable? (Think about relationships between parents/children, teachers/students.)

 

5.  How are free markets and freedom of choice related?

  1. The free market is simply the sum of voluntary exchanges between individuals in the economy. It is the embodiment of the principle that people should treat one another with dignity and respect as moral agents.
  2. Free markets enable people to exercise their freedom of choice and provides incentives for them to choose in ways that not only benefit themselves, but also benefit others in society.

7.3.B – Read the following article and answer the questions below [20 min]:

Article: Markets and Morality by Peter J. Hill (FEE.org)

“A system is more moral if it holds individuals accountable for their actions and encourages them to help others than if it allows them to impose costs on others without their consent. This is not to argue that a market system can serve as a replacement for a society in which people act on the basis of moral conscience. Individual morality certainly will enhance capitalism, as it would any system. Honesty, compassion, and empathy make our world more livable whatever the institutional arrangement. Capitalism is not inimical to these qualities. When alternative economic systems are evaluated within a moral framework, sound reasons emerge for favoring private property rights and markets. Markets and morality can serve as useful complements in maintaining a just society.”

Discussion Questions: Markets and Morality

1.  What is the author referring to when he discusses the concept of a “free market” or “capitalist society?”

  1. The author explains, “What we call capitalism or a free-market society is a society based upon private property rights. Individuals may own, buy, and sell property (including their own labor) if they do not do so fraudulently, and they are free to do what they want with their property as long as they do not harm others. Individuals may decide to exchange property with others, thereby creating a market. This market process is not mandated by anybody and requires only a well-defined and enforced system of private property rights in order to exist.”
  2. The author explains that a free market or capitalist society is made up of individual property rights and the freedom to make choices about what to do with this property. The society does not need any central planning system; only an enforced system of private property rights.

 

2.  What are some of the moral strengths of a “capitalist” or “free market” society?

  1. Peter J. Hill explains, “Inherent in capitalism is the ability to: provide freedom of choice, encourage cooperation, provide accountability, create wealth for a large number of people, and limit the exercise of excessive power.”
  2. People are given the freedom of choice – they can live and organize their own lives in any way they wish. The author illustrates with the example of the ‘Hutterites’ who chose to share all common resources & not sell their labor. They are free to do this within a capital society. 
  3. The capital market promotes cooperation. People have the incentive to cooperate with others in order to save time and maximize the range and quantity of goods and services they can consume.
  4. Tolerance: People can chose to make different decisions about their lifestyles and still live and cooperate with others. The author uses the example of the vegetarian and meat-eaters – they are able to choose their own diets but still shop at the same places.
  5. A capital society promotes social harmony because it holds people accountable for their actions if they damage another person’s private property.
  6. Exchanges between people are “positive sum” – With well-defined laws in a capitalist society both parties will always benefit from exchanges so people are constantly having more value and becoming better off.
  7. No one central body or government has excessive power over other people’s freedom.

 

7.3.C – Read the following article and answer the questions below [15 min]

Article: From the Sixth Grade to a Harvard Degree by Lawrence W. Reed (FEE.org)

“Giving money to worthy causes is a noble thing, but having the wisdom and the drive to do what it takes to earn it in the first place is what’s really great… In 77 years of life, Nub [Norval Morey] went further than most of us ever will if we live to be 100. He was a pioneering inventor, an entrepreneurial genius, a job creator, a benefactor of education.”

Discussion Questions: From the Sixth Grade to a Harvard Degree

1.  According to the author, how can you measure the greatness of a person?

  1. “Greatness…something that springs from character, the critical, self-determined stuff that defines a person. A great man or woman is one who does great things from the heart and doesn’t care if it makes the papers.
  2. Giving money to worthy causes is a noble thing, but having the wisdom and the drive to do what it takes to earn it in the first place is what’s really great.”

 

2.  According to the author, “Norval Morey not only knew what it takes to make a successful company tick; he knew what it takes to make a successful country tick as well.” What kinds of ideals did Norval promote?

  1. He spoke out in favor of individual liberty and free enterprise.
  2. Nub was a down-to-earth, no-pretense guy whose least concern was whether he impressed you. I never once heard him say anything boastful.

 

3. How did a man with a 6th grade education go on to be “a pioneering inventor, an entrepreneurial genius, a job creator, a benefactor of education”?

  1. Norval achieved success through hard work and dedication. He developed his skills.
  2. He was also free to pursue the life he thought best for himself.
  3. Norval “…spent the first half of the 1930s working the family farm, cutting and hauling wood, and taking on every odd job he could find. He then moved to Idaho to work as a logger near Lewiston. Returning to Michigan at the start of World War II, he labored in defense plants in Detroit until the army drafted him in 1942. He faced danger head-on as a combat squad leader in northern Italy. Back in his home state after the war, he became a sawmill operator. Wood was his passion and his career for the next four decades.”

Lesson Recap

 
  • Markets promote peace, cooperation, economic prosperity, strong character, and social progress. Free markets are a necessary ingredient for achieving a humane and just society.

 

  • Freedom of choice is a key part of what gives us a truly human experience.

 

  • “Inherent in capitalism is the ability to: provide freedom of choice, encourage cooperation, provide accountability, create wealth for large numbers of people, and limit the exercise of excessive power.” – Peter J. Hill

 

  • Markets promote and encourage cooperation and social harmony. Exchange is “positive sum,” meaning both parties gain from the transaction.

 

  • Markets and morality serve as useful complements in maintaining a just society.

 

Additional Resources

Article: The Moral Element in Free Enterprise by F.A. Hayek (FEE.org)

“It is, on the one hand, an old discovery that morals and moral values will grow only in an environment of freedom, and that, in general, moral standards of people and classes are high only where they have long enjoyed freedom—and proportional to the amount of freedom they have possessed. It is also an old insight that a free society will work well only where free action is guided by strong moral beliefs, and, therefore, that we shall enjoy all the benefits of freedom only where freedom is already well established. To this I want to add that freedom, if it is to work well, requires not only strong moral standards but moral standards of a particular kind, and that it is possible in a free society for moral standards to grow up which, if they become general, will destroy freedom and with it the basis of all moral values.”

 

Article: Is the Free Market Ethical?  by Fred Foldvary (FEE.org)

“The case for the free market exists on firm moral ground: the free market, free from coercion, is the only ethical market.”

 

Article: The Pursuit of Profit is Pro-Social by Matthew McCaffrey (FEE.org)

“Thinking of social enterprise as distinct from conventional business helps obscure the vital truth that profit seeking is not only compatible with increases in human welfare, it is probably the most powerful force for producing them ever devised. In fact, that’s the beauty of free-market enterprise: it’s social whether it pursues an explicit social agenda or not”

Article: Honesty and Trust by Walter E. Williams (FEE.org)

“Both are crucial for efficient human interaction and a smoothly working economy”

 

Article: Lot Lizards, Sexism and Markets by Jeffrey Tucker (FEE.org)

“The moral of the story: if you have a problem with the way the market is treating you, don’t go to government. It’s too blunt an instrument. There might be an app for that. Or you might be looking at an opportunity to create and sell your own app. Markets contain within themselves the basis for solving their own problems, and always more elegantly than the rough hand of the law. You don’t need to “bring a dude with you” after all.”

 

Article: There’s No Such Thing as an Unregulated Market by Howard Baetjer Jr (FEE.org)

“There is no such thing as an unregulated free market. If a market is free, it is closely regulated by the free choices of market participants. The actions of each constrain and influence the actions of others in ways that make actions regular — more or less predictable, falling within understandable bounds. Government regulation is not the only kind of regulation; market forces also regulate. Recognizing this, communicating it to others, and getting the awareness into public discourse are key steps toward greater economic liberty.”

 

Article: Why Free Markets Are Difficult to Defend by D. Eric Schansberg (FEE.org)

“In sum, there are at least two plausible explanations for the paradox of why people support free markets in general and government activism in specific areas. The visible benefits of government activism are easier to explain than the more abundant but more diffuse benefits of free markets. And due to the different incentives that winners and losers face for any given proposal, the benefits of government programs are more forcefully argued since their proponents will (out of ignorance or deceit) discuss the program only in its most favorable light. Government programs may be bad economics, but why they are bad economics may be difficult to explain. That is why an effective defense of the free market must be based on moral principle.”

 

Article: Equality, Markets, and Morality by Burton Folsom (FEE.org)

“Free markets may yield odd results and certainly unequal outcomes, but the greater opportunities and prosperity have made the tradeoff worthwhile for American society.”

 

Articles/Videos: Does the free market corrode moral character? (templeton.org)

This is the fourth in a series of conversations among leading scientists, scholars, and public figures about the “Big Questions” from the John Templeton Foundation.

 

Video:(Learn Liberty, 2:02 min)

“Some people like rock music, and others like country. Some people prefer chocolate; others prefer strawberry. Economics calls value subjective to reflect these different tastes and preferences. Philosophy uses the term "value" objectively, to refer to things such as rights. Prof. Aeon J. Skoble shows how both conceptions of value are legitimate and, in fact, complement each other.”

Last modified: Monday, August 13, 2018, 12:55 PM