1. Running head: Pure Capitalism and the Exclusion of Morality 0
Pure Capitalism and the Exclusion of Morality
Taylor L. Hartshorn
Troy University

2. Pure Capitalism and the Exclusion of Morality 1
Abstract:
The idea of pure capitalism and its benefits as well as repercussions allows for a deeper
exploration into its ability to rebut the arguments presented by socialism. The free market in a
purely capitalistic society allows for truly free people who are not restricted by any factor
including morality. By defining morality as a social construct, it is possible to explore the idea of
morality not existing in a capitalist society. The exclusion of morality allows for the rejection of
key objections to capitalism. The idea of a truly free person being oppressed by a social construct
is not feasible in a truly free market society, as the simple social construct would obstruct the
free market.

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Introduction:
The ideological beliefs of pure capitalism have consistently carried negative
connotations with them throughout history. The majority of these negative thoughts deal with
morality and whether or not capitalism, pure capitalism in this case, will allow for markets to be
moral, or if those same markets are immoral in their structure. In concurrence with the moral
objections to capitalism comes emotional arguments meant to distract one from finding solutions
to these issues. The rejection of morality as it is defined in society today provides a response to
the objections against capitalism. To understand this separation of morality from pure capitalism
and its ability to provide solutions to critiques put forth by those who oppose, the objections
made must first be understood. The Mises Institute lays forth some of the major objections to
capitalism in plain terms. These objections include exploitation, racism, sexism, and monopolies
in regards to resources (Carden 2012). The issues laid out by Carden, all contain the concept of
morality. The issues outlined will be examined under the eye of pure capitalism on moral
grounds, and will be re-examined after the exclusion of morality. To make these exclusions, it
must be seen that morality is a social construct that affects each individual in society. The
theoretical assumption made in this case is that truly free people, as seen in pure capitalism, will
not be oppressed by social constructs as those constructs would suppress their free will as
guaranteed by the capitalist system.

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Literature Review:
The idea of a completely free market under pure capitalism is discussed in great detail in
The Free Market Innovation Machine: Analyzing the Growth Miracle of Capitalism (Baumol
2012). In this book, the market is viewed as “a machine whose primary product is economic
growth” (Baumol 2012). The ideas in this book serve as a cornerstone to defining capitalism and
its positive effects. These arguments presented for capitalism by Baumol allow for further
analysis on morality and its role in capitalism. Furthermore, Baumol attacks capitalism on moral
grounds citing ancient civilization such as China who while using all sorts of “socially
unacceptable” tactics to gain wealth in their capitalist society (Baumol 2002). These objections
can be addressed by taking a deeper look at morality’s role, if any in society.
The morality that exists in markets is also discussed deeply by Langrill, Ryan, and Storr
(2012) in The Moral Meanings of Markets. The morality that they describe exists, but not out of
a social construct as morality is seen today. I hope to separate the market morality, due to profit
seeking, from social morality, which is driven by emotional responses. The market must provide
morality to all in a truly free society, even those who would seem amoral under the societal
definition we have today. If an individual is engaging in an activity that may seem immoral
under societal standards, but is market efficient and creates growth, it would seem amoral to stop
the market from allocating that resource. According to the text, “market supporters have
consistently emphasized that markets make it so that self-interested or even greedy individuals
can only help themselves by serving their fellow men and women” (Langrill, Ryan, Storr 2012).
This statement serves and the backbone for the case of the social construct of morality being
stricken from pure capitalism. With this in mind, it becomes evident that in order to create

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economic growth, each individual in society must have to freedom to pursue their own self-
interest in order to enhance the greater good of society.
Minimum wage hikes allow for a good example of conflicting moralities in society. On
the one hand, critics of capitalism, argue for minimum wage rates to be increased, citing moral
convictions, but not economic reason. On the other hand, pure capitalism argues for no minimum
wage, as it is an artificial interjection in the market and therefore interferes with efficient
allocation. By looking at the arguments of these critics, it is possible to further split the two
moralities defined, social morality and market morality. According to The Two Moralities of the
Minimum Wage, Lee (2014) states the importance of morality over economic logic is the driving
factor in minimum wage laws and is accentuated by the ability of voters to express personal
virtue at little personal cost (Lee 2014). This split of social morality and market morality
provides a clear example and path to separating morality from the market in pure capitalism.
Pure Capitalism
Pure capitalism can be defined as a market allocating all resources and demands
efficiently. This idea leans heavily on the idea of private property rights and individual liberties
and freedoms. In a society based solely on individual freedom, there can be nothing that stops a
market from allocating any good or service efficiently. If each member or the market has
complete freedom in their decisions inside the marketplace, bearing both costs and benefits, there
can be no inefficiencies due to each individual is fully expressing their preferences in the market.
Following this logic, it can be seen that morality would interfere in the market, as it would alter
preferences, throwing the market out of equilibrium due to outside pressures on participants in
the market. The ideologies in pure capitalism offer solutions to the objections laid forth by critics
as previously outlined. Starting with the concept of exploitation, a concept that has been shaped

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by societal moralities as we see it today. The idea of exploitation is not an objection that holds
under pure capitalism as no truly free individual can be exploited. In pure capitalism, each
individual has the freedom to choose in the market, bearing their costs and benefits, ensuring that
any exploitation is impossible. The objections of racism and sexism fall on the argument that the
capitalist market is structurally created to foster these qualities (Carden 2012). This fails to hold
in a purely capitalist society due to profit seeking and Langrill, Ryan, and Storr’s (2012)
intervention that in order to prosper, each individual must pursue self-interest in order to benefit
their cohorts. The market provides an incentive for corporations and individuals to seek profits.
This incentive ensures that racism and sexism cease to exist as they would hinder profit seeking
activities. Racist and sexist practices would cease because those corporations and individuals
partaking in them would face market competition from those not employing those practices. It
would not be profitable for companies or individuals to practice racist or sexist tendencies as it
would put them at a disadvantage in the market; being that in a pure capitalist society each
individual fully bears the costs and benefits of their actions. The final objection under
examination is the idea of monopolies becoming apparent in capitalist societies. The idea of a
monopoly becoming prevalent in a purely capitalistic society is impossible as competition and
free will would not allow it. If a company were to obtain a monopoly without any intervention
granting that power, as is the case in most monopolies of today’s society, the monopoly would
have to be efficient in the marketplace to continue. The monopoly would still face competition
from market forces and would eventually not maintain this power. These simple rejections of
cornerstone objections serve to enhance the idea of excluding morality from pure capitalism.

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Market Morality versus Social Morality:
An important distinction must be made in terms of morality to fully analyze and
understand how morality can be excluded from pure capitalism. It must be seen that capitalism
foster market morality, in that it creates an equality of markets. Pure capitalism creates market
that allow equal opportunity to all individuals in a society without oppressing others in the
market. Market morality is obtained through the pursuit of profit and the upholding of personal,
private property rights. The morality guaranteed by the market is one of fairness and equal access
to opportunity to succeed. An example of this was outlined earlier in the discussion of minimum
wage by Lee (2014). It is important to note that this morality cannot oppress any rights of the
individuals in the market. This marks a clear distinction between market morality and social
morality. Market morality can only be seen in a system of pure capitalism where private property
and the pursuit of profits create motivation to provide goods and services to all in the name of
self-interest. While market morality does not suppress the free will of participants, morality
constructed by society can and will oppress the free will of individuals. This is further explored
in the next section where morality is defined as a social construct.
Morality as a Social Construct:
The science of economics has evolved over the years in terms of moralities. According to
(Alvey 2000) before Adam Smith’s economic developments, the science of economics, the ideas
of Aristotle were used as the basis for economic research. The research of Aristotle defined
economics as part of a much larger science into the field of ethics, morals, and theology. The
change in thinking occurred after the works of Adam Smith. The change in economic science
occurred after the printing of Wealth of Nations (Smith 1937). This change signified economics
entering the world of science as a moral science, separate from theological and ethical sciences.

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This change in economic thought allows for the separation of morality from the ideologies of
pure capitalism. The idea of morality has been debated and discussed for hundreds of years and
continues to find a place among philosophical discussions pertaining to capitalism. According to
Moshman (1995) “morality is actively constucted rather than revealed in the course of a
genetically directed process of maturation.” This construction of morality comes from society as
a whole directing the actions of individuals. The argument to follow allows the original thesis to
be confirmed. The ideologies of pure capitalism does not allow for any individual to be
controlled or oppressed by any means, guaranteeing complete economic freedom and free will.
The directing of actions of individuals by society can now be seen as oppressive under pure
capitalism, as the ideology does not allow for free will to be suppressed in the market.
Conclusion:
The idea of pure capitalism in itself allows for morality objections to be rejected, but
furthermore allows for the concept of morality to be ruled oppressive as it suppresses the free
will of people in a market place. The idea stems from describing morality as a social construct,
with the belief that morality is subjective, rather than objective. Drawing on the works of Smith
(1937), Alver (2000), as well as Langrill and Storr (2012), it can be seen that morality is
subjective, and due to that subjectivity, the morals of one may oppress the morals of another in a
society. This oppression ceases to exist in a pure capitalist society due to economically free
individuals not being constrained by any factor other than the market itself. The distinction made
between market and social morality is important in determining if rights are violated. As shown,
market morality does not allow for the oppression of individuals because it is constrained by the
pursuit of profits in a market as well as private property rights. It can be seen due to social
morality being subjective, that individuals’ rights can be violated in a system where morality is

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set up as a social construct. This sort of oppression allows for the exclusion of morality in pure
capitalism due to its inability to violate the rights of individuals in society by way of free markets
and private property rights.

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References:
Alvey, James A. (2000),"An introduction to economics as a moral science", International Journal
of Social Economics, Vol. 27 Iss 12 pp. 1231 – 1252
Baumol, William J. The Free-market Innovation Machine: Analyzing the Growth Miracle of
Capitalism. Princeton: Princeton UP, 2002. Print.
Carden, Rt. "Common Objections to Capitalism." Mises Institute. Mises Institute. Web. 22 Mar.
2016.
Langrill, Ryan and Storr, Virgil Henry, The Moral Meanings of Markets (Fall 2012). Journal of
Markets and Morality, 15 (2) 2012. Available at SSRN: http://ssrn.com/abstract=2350846
Lee, Dwight R. (2014). “The Two Moralities of the Minimum Wage,” The Independent Review
19(1): 37- 46.
Moshman, David. "The Construction of Moral Rationality." Human Development38.4-5 (1995):
265-81. Web.
Smith, Adam, Edwin Cannan, and Max Lerner. An Inquiry into the Nature and Causes of the
Wealth of Nations. New York: Modern Library, 1937. Print.
Young, S. (2003). Moral capitalism: Reconciling private interest with the public good. San
Francisco: Berrett-Koehler.