Thankfully, however, Adam Smith has already done so. For him, concern for the people at large, as well as the particular aid required by the poor, remain at the forefront of his mind. After all, it is Smith himself who wrote that, “It is but equity, besides, that they who feed, cloath and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, cloathed and lodged” (Smith 1.8; see our first post for Works Cited). Rather than eroding character and culture by the redistribution of wealth, Smith therefore seeks the long-term interest of both the blue- and white-collar classes by increasing the wealth of everyone.
He recognizes that the best way to help the poor is to build an economy that educates, equips and empowers the producer to provide for his family from the fruits of his own labor, leading both to a stronger character and a true stake in the society he has helped build. The solutions to capitalism’s flaws are therefore found in conservative reforms that maintain Smith’s own emphasis on the free market and the development of the human mind and spirit.
So while our economy is in great need of reform, these reforms must be undertaken as an essentially moral task, while also recognizing the valuable role played by fair and free markets. While liberals prefer the first principle and conservatives the second, we should be careful to avoid a false dichotomy—a market must be fair in order to be free, and free in order to be fair. The difficulty, however, lies in how to balance this tension in a manner consistent with the values of a free society and for the common good.
Hayek, however, believed any explicitly moral purpose would be too broad to be of any prescriptive or practical use: “The ‘social goal,’ or ‘common purpose,’ for which society is to be organized is usually vaguely described as the ‘common good,’ the ‘general welfare,’ or the ‘general interest.’ It does not need much reflection to see that these terms have no sufficiently definite meaning to determine a particular course of action” (Hayek, ch. 5). But while Hayek is right to point beyond empty rhetoric, his choice of words is actually the exact sort of discussion we need.
Too many of us are concerned with what’s good for Me, and what The Man is doing to keep Me down. But what if we loved The Man (ostensibly our Enemy) as Our Neighbor and therefore as Me (Mat 5:43-48)? What if our economy were built upon a concern for each Other and less about personal or immediate gain? What if our economy served our families and communities instead of the other way around? If we vested our own special interests in the good of everyone? And if we understood that the all-too-real hunger games in our neighborhoods affect good people along with the irresponsible?
Hayek actually understands this better than he thought: “With our world as it is, with everyone convinced that the material conditions here or there must be improved, our only chance of building a decent world is that we can continue to improve the general level of wealth” (Hayek 14, emphasis added). He even articulates the constitutional principle that makes it possible: the rule of law. As he writes, “The Rule of Law thus implies limits to the scope of legislation: it restricts it to the kind of general rules known as formal law and excludes legislation either directly aimed at particular people or at enabling anybody to use the coercive power of the state for the purpose of such discrimination” (Hayek 6, emphasis added).
In practice, this means that our laws should be written based on what happens to the vast majority of families the vast majority of the time. There are, of course, always exceptions to rules, especially to mitigate the risks for those whose circumstances are outside the norm, but these exceptions generally prove the very rule being excepted. And when applied consistently, this means a transparent legal environment that applies to all people equally, enabling producers and consumers to use their freedoms for the best interest of all involved.
Good policy, then, will recognize the “fundamental principle that in the ordering of our affairs we should make as much use as possible of the spontaneous forces of society, and resort as little as possible to coercion” (Hayek 1). Such freedom, of course, has its own set of risks, but “in the long run even material progress will depend on this very variety, because we can never predict from which of the many forms in which a good or service can be provided something better may develop” (Hayek 4).
The wisdom of such liberty is even more apparent as technology continues to stretch the bounds of what is possible. In fact, “it is the very complexity of the division of labor under modern conditions which makes competition the only method by which such coordination can be adequately brought about” (Hayek 4). The role of government, then, cannot focus on picking winners and losers, and writing the rules to match our choices. Instead, we should focus on shaping an environment in which both producers and consumers are free to thrive:
To create conditions in which competition will be as effective as possible, to supplement it where it cannot be made effective, to provide the services which, in the words of Adam Smith, “though they may be in the highest degree advantageous to a great society, are, however, of such a nature, that the profit could never repay the expense to any individual or small number of individuals”— these tasks provide, indeed, a wide and unquestioned field for state activity. (Hayek 3, see Smith 5.1.3)
Yet again, the Founders were prescient, opening our federal Constitution by enshrining these very principles into America’s civic life: “We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America” (Preamble, emphasis added).
The General Welfare Clause, of course, does not simply authorize any economic plan discussed in today’s public square, but when placed back in its constitutional context an important principle becomes apparent: the common good (including future generations) is integrally connected to a principle of ordered liberty under law, and mediated through the framework of our constitutional republic. Politics and economics are rooted in the common good, because as in all aspects of life, “We are how we treat each other, and nothing more.” And now for the slightly eccentric video . . .