Earlier this month the Cato Institute generously hosted a small roundtable discussion of CEI’s recent study “Virtuous Capitalism: Why there Is Less Corruption in Business than You Think” by Fred Smith and Ryan Young. Our goal was to solicit comments on and criticisms of the paper’s arguments, and to expose more people to the work of CEI’s Center for Advancing Capitalism.
The questions that arose during that session were helpful, but we are eager to open the discussion to as wide an audience as possible. Thus, we invite scholars (and students) to submit written responses to the arguments presented in the paper. Economists who work in the realm of public choice theory might be especially interested in engaging with Smith and Young. As they write:
Most—but not all!—businessmen, we argue, have a sense of decency or an implicit code of honor that causes them to refrain from rent-seeking behavior, or at least do less of it than one would expect. This virtue defies quantification, which may be why many economists defy incorporating it into their analysis. We seek to encourage public choice economists and other social scientists to gain a fuller picture of humanity than they do now.
What issues must be resolved if this perspective is to be more widely accepted? Why do you think the cronyist story seems so much more plausible, even to pro-market thinkers? What data or surveys might be useful in clarifying the conditions under which individuals see rent-seeking as moral or, at least, morally neutral?
We look forward to your feedback. We plan to feature a collection of responses here on OpenMarket, linked to the original paper, so short, blog-post-length responses will be most useful. We’re excited to start a larger online conversation about capitalism, virtue, and business ethics. Please send critiques, reviews, and comments to [email protected].
“Virtuous Capitalism” was the first title in our new Profiles in Capitalism series, which will tackle big-picture critiques and defenses of capitalism, complementing CEI’s sector-by-sector work on regulation and the growth of government. The second title in the series, “Reviving Capitalism: Lessons from the Near-Death and Rebirth of American Railroads,” by Fred Smith and Marc Scribner, was published last week.