Comment: The Nature of Belief – Part Two: Free-Market Fundamentalism

(Note: Postings under the “nature of belief” heading should be taken not as an attempt at a systematic analysis, but as extemporaneous ramblings.)

Why do people get passionate about economic theory? Why is there an emotional attachment to theories of laissez-faire capitalism?

An emotional attachment to contrary economic theories – Marxist socialist theory, for instance – is easy to understand, because they tend to link up directly with moral issues. Such theories claim to show how social institutions and economic arrangements directly, predictably, and purposely commit injustice.

But free-market fundamentalism is at best indirectly connected to moral issues. The theory says, roughly, economies will work best, and more people will prosper, if you have an unrestricted free market. Of course this links up, at some point, with moral issues, but it is a remote connection. The theory doesn’t diagnose deliberate injustice. It doesn’t prescribe a remedy for injustice. It just says there will be greater wealth in society if we do such and such. That sort of theory is clearly important, but so are theories of disease transmission in urban environments, and there are no passionate, sword-wielding crusaders creating political movements around disease transmission theories.

I have a guess about why free-market fundamentalists are so emotional about their economic theory. (And mainly we’re not talking about economists – who might be expected to be passionately committed to their own theories. Mostly we’re talking about non-economists who come close to getting sexually excited at the mention of Adam Smith or David Ricardo.) My guess will not find much favor among the fundamentalists themselves. Here’s my guess. It’s short and simple.

Theories of laissez-faire capitalism provide a mask of respectability for selfishness and unconcern for others. The theories say that as long as you cater to the interests of prosperous people, everyone else will be better off. The theories allow you to act selfishly in the interests of the people you identify with (the rich) and to say that you are doing it for the benefit of the poor. You can demand tax breaks for the rich, because that will help everyone else. You can demand that the power company be allowed to pollute air and water, because that is in the best interests of the people who breathe the air and drink the water.

This is not just an economic theory. This is a putatively empirical-logical justification for selfishness and unconcern for others. That is something you can get excited about. That is a theory you can be emotionally committed to and take to bed. And so they do.

That’s my guess. Maybe I’m wrong, but something has to explain why this social-scientific theory, unlike others, incites such passionate love and fanatical devotion. Nobody gets that excited about quantum physics. I’d be interested to hear other possible explanations.