Michael Walzer: The Free Market and Morality

Walzer: I’m Michael Walzer and I am a professor, now Emeritus, at the Institute for Advanced Study in Princeton, professor of Social Science. Question: How can we improve our economic system? Walzer: Well, the analogy that I drew in the essay was with political constitutionalism, because I think that the competition for power has similarly corrosive effects as the competition for wealth, but we’ve taken into account the corrosive effects of the competition for power. That’s the point of limited government. That’s the point of democratic constitutionalism. The idea is to set limits on what people can do in pursuit of power and on what they can do with the power that they win. And I would do exactly those same things in the economy. I would set limits on what people can do in the pursuit of wealth. Now, to some extent, we do that. We prohibit theft and extortion. But, obviously, there are forms of market behavior which don’t come under the definition of theft or extortion, which nonetheless are brutal in their effects on other people. False advertising, promises that financial brokers make to the people whose money they claim to be managing, and I would regulate that. And then I would set limits on the extent of wealth. And then we have to set limits on what money can buy, in the same way that we set limits on what power can do in the world, and the limits of what money could buy, that means that people should not be able to buy university, Ivy League university places for their children. They should not be able to buy expensive medical care that isn’t available to anybody else. They should not be able to buy justice in the courts or political influence. And if all they can buy with their money was rare books or fancy gourmet dinners, then money would be harmless, and that’s what money should be. We should take the sting out of money, and that’s just the way we take the sting out of power. A president cannot use his power for personal aggrandizement. He could not use his power to get his son into an Ivy League college. He cannot use his power to get the Supreme Court to make the decisions he wants them to make, that we have separation of powers, we have limited government, we have… Congress can override a veto. We have all kinds of mechanisms to set limits on what politicians can do. We need to set limits on what politicians can do. We need to set limits on what enormously wealthy people can do, limits of essentially the same kind. Question: Did greed cause the Wall Street meltdown? Walzer: Well, I don’t accept the notion that greed on Wall Street, the exemplary form of the corrosion of moral character, caused this crisis, because greed always exists on Wall Street. Greed is what makes the capitalist system go. As Adam Smith taught us, everybody pursues personal gain and somehow the invisible hand makes it all work out for the best, but the invisible hand doesn’t do that, as we know. What is necessary is a visible hand, and that’s the visible hand of the state, regulating market behavior, taking into account the corrosive effects of competition, and the cause of this crisis is the failure of governmental regulation, because that’s what’s new and recent, whereas greed has, is a permanent feature and the crisis is obviously not a permanent feature of the capitalist economy. Question: Can greed be good? Walzer: I think people are ambitious and people are greedy in very different ways and to very different degrees. Democratic politics depends on the ambition of some people to win office, and I, in the capitalist system, so we are told even by its defenders, depends on the propensity to gain wealth, to search, to seek for wealth. So, those are just facts about the world and we don’t harness them but we accommodate them within Constitutional structures. And, yes, in a certain sense, we need them. I remember, back in the 1950’s, I remember being told by an older friend and political mentor that Adlai Stevenson was a very good man, but he didn’t want to win, and therefore he wouldn’t win, and we needed somebody who wanted to win. And, I guess, a corporation where some entrepreneur has a new idea which may or may not bring pleasure or comfort to millions of people, that corporation wants somebody to drive that idea as hard as he can. And the motive for doing that may be fame and glory but it might, for many people, be wealth. So, yes, it’s not entirely wrong to say that we use those driving forces but mostly we try to control them. Question: Why are most American’s so rabidly laissez-faire? Walzer: Well, in fact, we haven’t been, and all of us haven’t been rabid champions. The elections have been very, very close in these last years. The driven free market ideologues who have governed us for the last 8 years barely won, maybe didn’t win, the 2000 election. So, the country has been very divided, and I think one of the major features in explaining the growing inequities of American capitalism and the increasing failure of regulation has been the virtual collapse of the labor movement, of the trade unions. That’s if you want to explain why growing productivity has not produced higher and higher wages, which is, that a feature of the American economy for the last 30 years, that’s because of the weakness of the unions. Question: Are human beings inherently moral or inherently immoral? Walzer: “Crooked timber,” was Isaiah Berlin’s line, I think, from [IB]. Yes, we are crooked timber, but most people, I think, do the decent thing when they can, when they’re not under terrible pressure, under terrible threat, and a few people do the decent thing even when they are under terrible threat, as we see in the history of Nazism and of Stalinism. But those people are, philosophers call it “[superogatory].” They are above and beyond the normal level of expected behavior. But I think people are good, if you put them in circumstances that are not frightening and if you don’t expose them to threats of brutality and destitution.

The Princeton professor answers the Big Question "Does the free market corrode moral character?"

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