Debunking Free Market Materialism
Murray Rothbard once noted that “One of the most common charges leveled against the free market is that it reflects and encourages unbridled ‘selfish materialism’…it distracts man from higher ideals. It leads man away from spiritual or intellectual values and atrophies any spirit of altruism.”
Ludwig von Mises may have laid out the issue even more clearly in Liberalism.
Liberalism is a doctrine directed entirely towards the conduct of men in this world. In the last analysis, it has nothing else in view than the advancement of their outward, material welfare and does not concern itself directly with their inner, spiritual and metaphysical needs. It does not promise men happiness and contentment, but only the most abundant possible satisfaction of all those desires that can be satisfied by the things of the outer world.
Liberalism has often been reproached for this purely external and materialistic attitude…There are higher and more important needs than food and drink, shelter and clothing. Even the greatest earthly riches cannot give man happiness; they leave his inner self, his soul, unsatisfied and empty. The most serious error of liberalism has been that it has had nothing to offer man’s deeper and nobler aspirations.
At first glance, Mises seems to be adding fuel to the fire of the selfish materialism allegation against freedom. But that is not so. At issue is whether the allegation is true. To that, Mises answered with a resounding “no.”
[T]he critics who speak in this vein show only that they have a very imperfect and materialistic conception of these higher and nobler needs. Social policy, with the means that are at its disposal, can make men rich or poor, but it can never succeed in making them happy or in satisfying their inmost yearnings. Here all external expedients fail. All that social policy can do is to remove the outer causes of pain and suffering…It is not from a disdain of spiritual goods that liberalism concerns itself exclusively with man’s material well-being, but from a conviction that what is highest and deepest in man cannot be touched by any outward regulation. It seeks to produce only outer well-being because it knows that inner, spiritual riches cannot come to man from without, but only from within his own heart. It does not aim at creating anything but the outward preconditions for the development of the inner life.
In other words, the freedom at the heart of liberalism does not directly address people’s ultimate, higher ends, because they are internal to each individual. But that is not an argument against freedom, because the same thing is true of all “external expedients.” None can directly advance those higher ends. In particular, they cannot be coercively imposed from without, which is all that alternative social organizations add as potential tools in that direction. However, freedom does advance the potential for greater achievement of those ends, albeit indirectly, by offering individuals the most effective means of removing scarcity’s impediments. As Mises put it,
[T]he relatively prosperous individual…can more readily satisfy his spiritual needs than, say, the individual of the tenth century, who was given no respite from anxiety over the problem of eking out barely enough for survival or from the dangers that threatened him from his enemies.
Henry Grady Weaver, in The Mainspring of Human Progress, echoed that point when he wrote, “the necessities of life must be taken care of before there can be any widespread progress in other, more important directions.”
One could think of this argument as defining time (and energy) spent toward ultimate goals as total time available, minus time spent on other concerns. The less time necessary to support oneself and one’s family, the more “ultimate time” is available. This is advanced by gains in productivity, for which freedom has no peer. When freedom is externally restricted, ultimate time (and resources) must also be reduced by the time “governors” spend trying to control, dictate or enforce compliance on others and the time the “governed” spend in complying with or evading those impositions. These effects, which arise from every alternative to freedom, further detract from individuals’ ability to pursue their ultimate ends, while violating and corrupting morality by necessitating the use of harmful means.
Murray Rothbard added that, in a world where individuals are not allowed to do violence to others’ rights, “An individual can aim at any ends he pleases…But…he must first earn the money before he can attain the goal.” However, that fact offers “absolutely no ground for saying that the market economy fosters…material…goods; it simply leaves every man free to choose his own pattern of spending.”
Rothbard here recognized something freedom’s critics get backward. The worldly arrangements that freedom makes so much more productive are not distractions from advancing ultimate ends. They are reductions in the necessary distractions of earning a living, which is unavoidable because of the absence of free lunches in the world. By reducing scarcity’s inescapable toll on our efforts, freedom is not a substitute for those ends, but a complement to them, enabling them to be more completely attained.
Friedrich Hayek further extended the defense of freedom against the selfish materialism charge in “The Moral Element in Free Enterprise.” He noted that freedom both allows us and requires us to advance our ultimate ends in a way that, at the same time, also advances the prospects for others to achieve their ultimate ends. Coercion, in contrast, advances one’s ultimate ends at the expense of others’ efforts in the same direction.
Economic activity provides the material means for all our ends. At the same time, most of our individual efforts are directed to providing means for the ends of others…It is only because we are free in the choice of our means that we are also free in the choice of our ends.
Hayek’s conclusion here is worth particular note, because the ends one may choose to pursue (e.g., standing for the truth and having good character) are often inconsistent with many means of acquiring the resources to the pursue them (e.g., political false advertising). The fact that only in a system of liberty is the biblical command not to steal venerated rather than violated is a good illustration.
Hayek summarized this unique aspect of freedom in advancing ultimate goals:
In fact free enterprise has developed the only kind of society which, while it provides us with ample material means, if that is what we mainly want, still leaves the individual free to choose between material and nonmaterial reward…[it] may well make a free enterprise society materialistic. But the way to prevent this is certainly not to place the control of all material means under a single direction, to make the distribution of material goods the chief concern of all common effort, and thus to get politics and economics inextricably mixed.
Surely it is unjust to blame a system as more materialistic because it leaves it to the individual to decide whether he prefers material gain to other kinds of excellence, instead of having this decided for him.
Hayek also saw that the growth of moral values–a commonly cited “higher end”—is another important advantage of market systems:
[M]orals and moral values will grow only in an environment of freedom…
[F]reedom is the matrix required for the growth of moral values—indeed not merely one value among many but the source of all values…It is only where the individual has choice, and its inherent responsibility, that he has occasion to…earn moral merit…
[I]n particular the Christian values had to assert themselves through men who successfully resisted coercion by government…it is to the desire to be able to follow one’s own moral convictions that we owe the modern safeguards of individual freedom…
In addition, in contrast to any version of dictation to all, under freedom, the variety of ultimate ends pursued and the various choices made in those pursuits allow each individual to observe and compare differing results to better judge what will “work” for them in their lives.
Hayek also recognized a cause-and-effect relationship between the wealth created by economic freedom, which critics view solely as crowding out time for ultimate ends (which he described as “decry[ing] as materialistic the economically more active periods to which they owed the material comfort which had made it easy for them to devote themselves to other things”), and the ensuing expansion of human possibilities and humanitarian actions it makes possible.
[F]ree societies…in modern times have been the source of all the great humanitarian movements aiming at active help to the weak, the ill, and the oppressed.
Periods of great cultural and artistic creativity have generally followed, rather than coincided with, the periods of the most rapid increase in wealth…Individuals as well as communities, when they feel that other things have become more important than material advance, can turn to them.
Mises made a similar observation:
It is a purposeful distortion of facts to blame the age of [classical] liberalism for an alleged materialism. The nineteenth century was not only a century of unprecedented improvement in technical methods of production and in the material well-being of the masses. It did much more than extend the average length of human life. Its scientific and artistic accomplishments are imperishable. It was an age of immortal musicians, writers, poets, painters, and sculptors; it revolutionized philosophy, economics, mathematics, physics, chemistry, and biology. And, for the first time in history, it made the great works and the great thought accessible to the common man.
This pattern made Hayek reject the view that “the free enterprise system is more materialistic than other social orders.” The desire for more material goods is exhibited in every economic system. But under capitalism, as Rothbard noted, “The very fact that exchangeable consumers’ goods are more abundant enables each individual to enjoy more of the nonexchangeable ones.” In fact, Hayek concluded that “I find the atmosphere of the advanced Welfare State in every sense more materialistic than that of a free enterprise society.”
In Ben O’Neill’s words,
[T]he increase in wealth that obtains in the free market leads to a greater diversion of effort to nonmaterial concerns. Thus we see that capitalism, and the gain of material goods it engenders, leads to less “materialism” and “consumerism” — in terms of effort and time — rather than more.
Further, as Lew Rockwell expressed it,
[C]apitalism…tends to encourage not a materialist ethic, but…prudence, thrift, and hard work…The less free the economy, however, the more materialistic everyone must be…The demand for material possessions tended to displace other values.
The welfare state also directs man’s interest to the least important material activities. [e.g., away from responsibilities for our families]
Not only does the superior productivity of freedom enable greater focus on ultimate ends rather than materialism, it encourages it as a result of what economists call diminishing marginal utility or value. As Ben O’Neill noted,
[W]e rationally weigh alienable and inalienable goods against one another, according to our particular preferences…
[I]f we have more money, so that we can acquire additional alienable goods, then we will derive less marginal satisfaction from further additional alienable goods than we otherwise would. In this case, we will shift some of our effort and time away from acquiring alienable goods and towards acquiring inalienable goods.
[I]t is perfectly rational for wealthier people to devote more of their time and effort to nonmaterial concerns. This is because, given their existing wealth, the material concerns still available to them are of diminished importance compared to the material concerns of the poor…In the context of their own situation, they do indeed prefer to focus their effort on the attainment of nonmaterial, inalienable goods. But of course, their preference, usually in the context of relatively large amounts of existing wealth, should hardly be imposed on others, many of whom are in a far different situation.
Further, while critics’ accusations that capitalism’s offer of more material goods leads people addictively down the road to a monomaniacal focus on materialism, a stronger case can be made in the other direction. O’Neill notes that the persistent denial of individuals’ ability to acquire adequate material means in alternative systems—the opposite of the case under freedom—makes it a much more likely source of greater desire for and focus on material means, making people more materialistic.
Observe that it is the impoverished people of backward economies who devote more of their time and effort to the acquisition of material goods…It is not the poor who so fervently profess their desire for greater “spiritual fulfillment” and decry the evils of “materialism” and “consumerism.” They do not pursue nonmaterial goods with the same fervor…
O’Neill also recognized the irony of the accusation that freedom causes materialism, which comes from socialists of all degrees, when the original argument for socialism was that “it would lead man to material abundance, whereas free-market capitalism would lead only to increasing misery and would ultimately collapse under its own internal stresses.” When socialists were promising more material success and an inevitable implosion of capitalism, more was a boon. But when socialistic organization has proven beyond any reasonable doubt to create poverty and capitalism to create inconceivably greater wealth, their criticism has shifted 180 degrees. Now wealth they once promised is bad, turning us into materialists. When what was good is now bad, it is not consistent logic that is being put on display. What is being illustrated is blatant inconsistency, tied together only by an initial animating premise that capitalism is to be condemned, no matter what.
So what can we conclude about the “selfish materialism” assertions against capitalism?
Freedom, or “liberalism” in Ludwig von Mises’ terminology, does not directly advance ultimate ends because those ends are unimportant, but because they cannot be provided through external expedients. It is not a valid criticism to say that freedom does not directly advance ultimate ends, when no system of social organization can do so.
When no social organization can directly advance ultimate ends, systems must instead be evaluated by which does the most to make those ends possible. Here, freedom offers multiple major advantages.
Freedom’s massive expansion of productivity compared to any other system allows people to free up far more time and effort for pursuing ultimate goods (while simultaneously providing far more material goods). In this sense, freedom is a complement to, rather than a substitute for, attaining ultimate ends.
By offering individuals the ability to choose the means they will employ, within the bounds created by others’ rights, which coercion does not, freedom expands the higher, ultimate ends individuals’ are actually able to pursue.
Freedom requires that the pursuit of one’s ends must at the same time expand others’ freedom to pursue their ends, while coercive alternatives contract that freedom for others.
Freedom is the only system that appropriately rewards responsibility and is not inconsistent with the imperative that “you shall not steal,” expressed in every society but violated in all coercive systems.
Freedom allows people to learn from example to better discover what will work in advancing their ultimate ends. It offers individuals the maximum potential for moral growth.
Historically, freedom-enabled bursts of productivity and wealth creation have led to consequent outbursts of creativity and learning, improved health and humanitarian advances, the reverse of accusations leveled against it.
While freedom allows greater output to be produced, that does not make it materialistic. It is more likely that the persistent denial of the fruits of one’s labor to individuals in alternative, coercive systems makes people, of necessity, far more materialistic in focus.
By making more material goods and service available, freedom, plus diminishing marginal utility actually encourages more focus on non-material things.
Finally, the logical u-turn done by socialist-leaning critics in transforming material goods from benefits when they promised them to costs when freedom delivers them reveals that accuracy and truth are not the main motivation for the criticism.
“Selfish materialism” is one of a host of accusations by which those who wish to impose their views on others harass believers in freedom—and potential believers in freedom. But it shares two central things in common with the others—it is false, and careful thinking is able to reveal it as such. That is why those of us who wish to expand the reality of self-ownership and its consequences in the world must continually work to rebut such distortions and communicate the wonders of freedom accurately—it is the only hope of reaching those who remain open to freedom that is consistent with freedom.