Arthur Brooks’ Moral Case for Free Enterprise

Some people argue that free enterprise hurts poor people by impeding their opportunities to gain wealth. For instance, according to Occupy Wall Street (OWS), corporations have “perpetuated inequality…in the workplace” and “consistently outsourced labor…to cut workers’ healthcare and pay.”

If OWS’ descriptions of free enterprise are true, then perhaps there’re better economic systems than free enterprise. However, as policy blogger Patrick Chisholm recently argued, “…we live in a positive-sum society where the vast majority of those who are rich got that way through wealth creation, not wealth coercion. The history of America is the story of the rich getting richer and the poor and middle class getting richer.”

So if free enterprise benefits everyone, why aren’t more people on board? According to GlobeScan’s 2010 poll, only 59% of Americans believe “the free market…is the best system on which to base the future of the world.” Arthur Brooks, President of the American Enterprise Institute, claims that liberty advocates have failed to make the moral case for free enterprise. Brooks claims liberty advocates argue about economic efficiency when most people would prefer to understand how free enterprise can improve people’s lives.

To make the moral case for free enterprise, Brooks recently released this short video:

Brooks proves the following claims:

1) Free enterprise safeguards lasting happiness

The Founders’ concept of “the pursuit of happiness,” as in the Declaration of Independence’s promise of “Life, Liberty, and the pursuit of Happiness,” didn’t necessarily mean the pursuit of money. Brooks reminds viewers that earned success and not money brings happiness. Earned success is the creation of value in one’s life and other people’s lives. Brooks suggests earned success can of course involve money. However, Brooks argues it’s one’s work effort and sacrifice that make one happy and satisfied. As Brooks explains, “Free enterprise is the only system that lets us pursue our happiness by earning our success. And that’s the right thing to do, whether we get rich or not.”

2) Free enterprise promotes real fairness

What’s fairer? A system in which government officials take successful individuals’ money to “spread the wealth around” or a system that rewards individuals’ merit and hard work? Brooks asks viewers to imagine a school system in which teachers “spread good students’ grades around” to bad students. For instance, in grade fairness’ name Billy, an A student, must give some of his good grades to Ryan, a D- student. Then Brooks says the answer is obvious: “[R]edistributing income just to get more equality isn’t fair, it’s completely unfair.”

3) Free enterprise does the most good for the most vulnerable

Brooks explains how free enterprise has, since the 1970s, reduced the world’s worst poverty, defined as a condition in which people live on a U.S. dollar a day or less, by 80%. Thus, Brooks says, free enterprise has dramatically improved billions of people’s lives. Brooks concludes his video saying, “If we want more prosperity…not just for us but for people all over the world who are poor, we have to stand up for the free enterprise system.”

To convince more people, even Occupy Wall Streeters, that “the free market…is the best system on which to base the future of the world,” liberty advocates must start making Brooks’ moral case for free enterprise. Also, liberty advocates should add arguments to Brooks’ moral case to make it even stronger, which I’ll do in a future article.

About Tony Escobar

Tony Escobar is publisher of and owner of the digital media company AMTG Solutions. He's also a decorated combat infantry veteran of the U.S. Army. If you liked this post, you can follow him on Twitter at @EscoTony.