March 4, 2023
Especially in a liberal arts college context, it’s not uncommon to speak with students who are torn between (something like) “making money” and “helping people.”
Thankfully, a sound understanding of economics can relieve this tension (in many circumstances—exceptions discussed below).
I was reminded of this fact recently in re-reading a passage from Power and Market:
“However, even if we adopt an altruistic ethic, we must applaud maximization of monetary income just as fervently. For market earnings are a social index of one's services to others, at least in the sense that any services are exchangeable. The greater a man's income, the greater has been his service to others. Indeed, it should be far easier for the altruist to applaud the maximization of a man's monetary income than that of his psychic income when this is in conflict with the former goal. Thus, the consistent altruist must condemn the refusal of a man to work at a job paying high wages and his preference for a lower-paying job somewhere else. This man, whatever his reason, is defying the signalled wishes of the consumers, his fellows in society.
If, then, a coal miner shifts to a more pleasant, but lower-paying, job as a grocery clerk, the consistent altruist must castigate him for depriving his fellowman of needed benefits. For the consistent altruist must face the fact that monetary income on the market reflects services to others, whereas psychic income is a purely personal, or “selfish,” gain.”
That’s true, but only in free market contexts. So, one possible exception is someone who is evaluating their options in a cronyist system (i.e. our system). Plenty of rich people in our society didn’t get rich by serving their fellow man but by successfully seeking rents (transfers).
For Christian students, a second question is relevant. Does this production process contribute to human well-being and flourishing in an objective, spiritual sense? Without naming them, it should be manifestly obvious that not all production processes do.
All the forgoing argument says is that high incomes are evidence of satisfying preferences in a market free of government privilege, but it says nothing about whether the market is free in any given case or whether people’s preferences are themselves morally praiseworthy.
It is possible to “do well” by “doing good.” If it wasn’t, the world would never have gotten rich.