The Morality of Free Markets and the Blessings of Capital

A colleague recently voiced to me his opinion that it’s “immoral” when people go to dinner and spend a couple hundred dollars.  Because of my respect for him and his teaching ability, his comment hit me like a proverbial “ton of bricks.”  I had to think through his proposition … and I have come to believe in the strongest terms that he’s wrong.  Dead wrong.

As we move forward, let’s clear the air a bit.  I’m not talking about spending ill-gotten gains or spending money that you don’t have.  I’m also not talking about going into debt for the sake of having a little fun.  I’m addressing a situation where people make the adult decision to spend their money how they wish (in this particular example on an excellent meal prepared by competent chefs and served by attentive wait staff).  Of course, there are many who would read this and argue that such a “waste” of money is entirely selfish and inappropriate.  Their assumption appears to be that charity only takes place when someone gives something away with nothing in return.  I reject that notion.

Being restaurateurs, there are two things that my wife and I adore:  seeing others enjoy themselves in our own restaurant, and going out to enjoy ourselves in the culinary establishments of others.    Let’s take a moment to imagine that Patsy and I are headed out to one of those “selfish” dinners after a hard week of working our day jobs and running our little restaurant “on the side.”  We’re tired, we don’t want to imagine cooking for ourselves because we’ve been cooking for others all week, and we just want to settle at a table somewhere and be waited on.  Let’s imagine that we’re headed to a fine-dining establishment because we want the best dinner we can get and we want impeccable service.  We know in advance that it’s going to be pricey, but that’s a choice we’ve made.  After all, we’re selfish, right?

By the way, on the way home from teaching that day, I stop to fill my gas tank at a chain gasoline station.  My payment to the attendant not only helps assure that the station owner can pay her bills and feed her family, it also guarantees that she can continue to hire people to run the station and stock the shelves and coffee machines.  My payment also supports the thousands of Americans in the oil production and refinery businesses, and it puts no small sum into the federal tax coffers (in fact, I pay more in taxes on my gasoline purchase than I pay in profit to the gasoline retailer or the provider).  My purchase at the pump also make it possible for the guy who delivers the gasoline to the station to feed his family, along with all the other businesses who deliver to this location:  purveyors of sandwiches, high-energy drinks, hot chocolate, candy bars, coffee, headache remedies (something I need often since Obama was elected) and yes, one can even buy condoms (even without Obamacare they’re cheap).  This one little shop is visited dozens of times a week by people providing for their families by delivering goods that are subsequently sold to people like me.

After my gasoline purchase I arrive home and check the mail.  In the box I find a package containing a theological text I’ve ordered through Amazon.  It’s a used text, purchased directly from a retailer in Idaho who happens to have had it on his shelf and who sells pre-owned books online.  My payment to him helps him keep his kids in school, keep them fed, and helps him move one step closer to a bigger store where he also wants to sell coffee to shop visitors.  He pays a small fee to Amazon, and Amazon uses that to hire more people to fulfill the thousands of orders they get each month for new books.  As I walk to the door of my home, I’m greeted by pets (dogs and cats), all of whom have to be fed and several of whom need their medication because they’re getting older.  So I’m supporting grocery stores and veterinary clinics–all of which are staffed by employees who depend upon the success of their employers to meet their own financial and personal obligations.  And, of course, the interactive delivery web that I mentioned with the gas station applies in these establishments as well.

All of this and we’ve not even left the house for dinner!

I’ll try not to bore you with the rest.  Even a cursory glance at the rest of the evening will make my point.  Upon our arrival at dinner, Patsy and I are waited upon by a friendly bartender in her twenties.  She is a single mom who desperately needs her job behind the bar to pay her bills.  She’s good at what she does.  We each drink a cocktail, we hear about her precious daughter, and we leave a generous tip.  We are then shown to our table by a friendly manager in a suit, we’re introduced to a sommelier eager to sell us a bottle of wine, and then we’re greeting by a waiter named Gus who bubbles over with information about the specials of the day.

We are wined and dined.  We talk.  We make business plans for our own restaurant.  We share the joys and disappointments of our recent days.  We pay for our dinner and wine and we return home.  If we had a really great bottle of wine, and if we splurged on appetizers and dessert to accompany our meal, it’s not impossible that we did spend a couple hundred dollars.  But in the wake of our evening adventure we’ve supported bartenders, waiters, chefs, chef assistants, dishwashers, delivery personnel, training personnel, and yes, even a business owner.  Because my wife and I splurged on a night of “selfish” entertainment, and because others were doing the same, there are dozens and dozens of people whose jobs and incomes are secure.

Though it’s maligned these days by left-leaning politicians, the free market is nothing more than a web of relationships between people for the sake of exchanging goods and services.  It works much more smoothly because of the invention of money, or capital (from the Latin word capitale, meaning “stock” or “property” and from the French word capitaliste, a form of coinage in use during the French revolution).  Although money today is controlled by government and is often disastrously affected by the policies of government, it wasn’t always so.  It’s simply a medium of exchange that makes it possible to avoid all the problems associated with the barter system and, at least in theory, anything can be used as money.

Unfortunately, for most of us, the idea of charity means only one thing:  giving away something of value (money, time, or goods) with nothing in return.  I’m certainly not opposed to such forms of charity, as I hope my work with the poor has demonstrated.  But if charity is defined by concern for others and by making it possible for others to care for themselves and their loved ones, then the free market itself is a tool for charity. 

Need a relaxing evening with a loved one?  Go to a nice restaurant if it fits into your budget.  If money is tight, go to the local BBQ joint instead.  Either way, there are lots of people who will be terribly grateful that you did–especially when they pay their bills.  You will have made that possible.

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4 thoughts on “The Morality of Free Markets and the Blessings of Capital

  1. Dear John, I think that you make some very good points in this article. In particular, you are (of course!) correct to emphasize that many other people profit and are helped by your economic activity. Indeed, I agree wholeheartedly with your claim that “if charity is defined by concern for others and by making it possible for others to care for themselves and their loved ones, then the free market itself is a tool for charity.” That’s an excellent way of putting it, and I would be surprised if your anonymous interlocutor disagreed.

    You don’t cite his/her argument for the claim that $200 dinners are immoral (if indeed he had one), but it’s not hard to motivate that claim in a way that is in fact *supported by* your own reasoning. You and I both know that there are some absolutely destitute parts of the world – places where people don’t have clean drinking water (where in fact the only water around is miles away!), let alone enough food, whether because of famine, war, or whatever else. Now suppose instead of going out for that $200 dinner, you stay in and eat something really cheap and donate the rest of that money to them. (Say, through Catholic relief services.) We can now reason as you did above: there’s someone there to take the money; to select, buy, and organize food purchasing; there are the pilots who fly the food to the distant location; all the mechanics who maintain the plane; all the engineers and assembly line workers who build planes; there are people who distribute the food; there are social workers and nutritionists who help the people understand how to eat the food. Oh, there are the people who make the fuel for the planes. And the farmers who grew the food. Maybe some of the food is even bought “locally” (i.e., in areas surrounding the destitute) – which means you are further supporting a run-down economy. Indeed, in giving that money to charity, it might be the case that you’re in fact benefiting *more* people than you would be if you ate at the fine dining restaurant – and I haven’t yet mentioned the fact that you’re ALSO helping people who desperately, desperately need it.

    On balance, I think it’s fairly obvious that giving money to charity is overall far more beneficial, in an economic sense, than eating out. It’s a far, far better way, as you put it, to “demonstrate concern for others.”

    Now, do we have to be maximizers when it comes to helping others, as at least some utilitarians would have it? I rather doubt it. But nothing in my argument here turns on that claim. My point is that your own reasoning doesn’t actually support your point. Or, to put it another way, your own reasoning can be used in support of the conclusion you wish to deny.

    This is, of course, all part of a larger discussion of the value of different kinds of economic activity. Whenever I buy something – anything – I’m supporting the business or person(s) from whom I buy. And yet that alone is not justification for the economic activity. There are many, many things I can do with my money. Some of them are better than others. Thus, for example, people argue that one ought to buy food locally whenever possible to support local farmers (and keep down transportation costs, etc.). So my second point is that the issue is (as always!) more complicated.

    I close by reiterating what I said at the beginning, which is that I think you made some excellent points, ones which are often neglected in the conversation.

  2. Christopher, dear friend, thanks for your comment! There is little I disagree with, but if I’m reading you correctly then I’m not sure you read me correctly.

    You state in your third paragraph that “on balance, … giving money to charity is overall far more beneficial, in an economic sense, then eating out.” I’m not sure that you can prove that, Chris, unless you really have the specific data comparing the many transactions in two particular cases (a restaurant and a charity). Your argument, to be exact, should probably say that “it’s possible in a particular case that money given to a charity would be more beneficial, economically, than eating out.” Does that sound reasonable? If so, then I would agree with you.

    On the other hand, let’s also note that I never state in the blog post that eating out was economically better … I simply state that it qualifies as a form of charitable concern (as you admit in the opening of your commentary). You are correct that this is a complicated issue. That’s exactly why I limited my comment to saying what I did!

  3. John, your blog concerning the value created for others by your legitmate choice of a couple hundred dollar meal reminded me of what Samuel Johnson said some 300 years ago. James Boswell wrote in volume two, pages 258-259, of his three volumes on the life of Samuel Johnson the following:

    “Many things which are false are transmitted from book to book, and gain credit in the world. One of these is the cry against the evil of luxury. Now the truth is, that luxury produces much good.—A man gives half a guinea for a dish of green peas. How much gardening does this occasion? how many labourers must the competition to have such things early in the market keep in employment? You will hear it said, very gravely, ‘Why was not the half guinea, thus spent in luxury, given to the poor? To how many might it have afforded a good meal?’ Alas! has it not gone to the industrious poor, whom it is better to support than the idle poor? You are much surer that you are doing good when you pay money to those who work, as the recompence of their labour, than when you give money merely in charity.”

    So you have continued a dialogue on individual choices and their related values to luxury/charity that has existed for centuries.

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