Economics, Current Events

Can a Liberal Education Produce a Defense of Capitalism?

In the process of looking for something else this evening, I came across some remarks I delivered in 2006 as a respondent at a faculty colloquium where the main talk was given by Professor Juliet Schor from Harvard.  I had forgotten about them and upon rereading them thought they might be of interest to this crowd.  They are reprinted below “as is.”

Can a Liberal Education Produce a Defense of Capitalism?

 Remarks on Juliet Schor’s Crimmel Colloquium Lecture Sept 2006

Steven Horwitz

          Let me start this morning with my title:  can a liberal education produce a defense of capitalism?  Those who know me know that this is a rhetorical question – of course I think it can.  After all, I’m a faculty member and administrator at a college devoted to providing  a liberal education.  And I’m a radical libertarian economist who actually believes that unfettered markets are really, really good things of which I’d like to see more.  That said, I’m also someone deeply committed to the values of a liberal education – values that both Bill and Prof. Schor have outlined so well.  I just happen to believe that capitalism (a word I detest, I might note, for many reasons, but I’ll bow to common usage) serves many of those values as well or better than other forms of economic organization.

Of course Professor Schor was very clear to be talking about “consumerism” not “capitalism,” although it’s, I think, fair to say that the latter was in her sights too.  Her inventory of consumerism’s sins implies a set of policy alternatives that would be antithetical to capitalism.  However, it’s worth noting that it need not.  One can, though this is not Prof. Schor’s stance, believe that living more simply is a good thing and yet still believe in free enterprise and capitalism and the like.  After all, the CEO of Whole Foods, John Mackey, is a pretty radical libertarian and has given money and lent his name to a variety of free market causes in recent years.  Are you all so sure you know where your consumer dollars are really going?

What pushed me in the direction of my comments this morning was a somewhat more off the cuff remark Prof. Schor made about how a good liberal education could create more critical consumers who would, for example, hesitate to buy clothing made in sweatshops because they would understand the real costs associated with doing so.  Professor Schor made similar remarks about other consequences of current consumption patterns and preferences, suggesting that a liberal education might change those patterns if we understood their full implications.  This got me thinking more broadly about the issues she raised, so my comments to follow are more a musing on the issues rather than a direct response to her.

What of the student who attended last night and responds by saying: “Wait a minute.  What if the opportunities in those sweatshops, however meager they may seem to us in the comfort of the West and North, are in fact a real step up for the individuals who work there?  What if they are better off there than working 16 hour days harvesting crops, or scavenging for returnable bottles, or selling their bodies on the street?  Shouldn’t the values that are a part of my liberal education here at SLU suggest that I should buy more sweatshop-made clothing so that I provide more such improved opportunities and increase the value of the labor of people who can use all the help they can get?”  I happen to believe this is a correct argument, but I wonder whether there are those who would see my encouragement of a student who makes such an argument as being somehow antithetical to a liberal education.

Or conversely:  what of a student who agrees with Prof. Schor’s argument, who I then respond to by saying “well, let’s step back for a second and ask a few critical questions about your belief that buying sweatshop-produced clothing is problematic.”  Aren’t I engaging her critical thinking skills as well?  Aren’t I, at least in my own mind, challenging her to think more carefully about the effects her actions and choices have on the world around her?  Yes, my causal chain might be different, but the form of the argument is the same:  engage your critical thinking skills to see beyond the apparently “natural” to understand the underlying processes that are at work.  Yesterday, I had one of the brightest students I know on this campus say to me “I’m seeing the world in ways that have made me think critically about things I always thought were true” as a reflection upon understanding the effects of price controls in her first month of Econ 100.

Another example is the way in which one might use the insights of public choice economics to engage students’ critical thinking skills to unmask the rhetoric and pretense of government policies that limit freedom in the marketplace.  For those who don’t know, public choice economics examines the political arena from the perspective of broadly self-interested exchange.  Politicians want votes, voters want programs from government, and bureaucrats want power and budgets.  Thus when political actors, including private sector interest groups, mouth platitudes about the public good, public choice economics leads us to ask “cui bono?” – what’s in it for them?  So when Michigan politicians preach the need for import quotas on foreign cars in order to improve the US economy, we can deconstruct that rhetoric pretty quickly.  Or when firms who already provide health insurance to their workers call for government to impose mandatory insurance-provision rules on their competition in the name of improving health care, we can talk about how it can also be seen as a way to raise their rivals’ costs by using the power of the state to do so.

These are all, I think, examples of ways in which the skills and values of a liberal education –  critical thinking, deconstructing rhetoric and ideology to see the underlying forces at work, and concern that political and economic institutions serve the interests of all, and especially the least well-off, and not just those of the politically powerful – can be consistent with a defense of capitalism.  It’s also worth noting that what’s good for capitalists isn’t the same as what’s good about capitalism.  Many times, those with economic power cloak their own self-interest in public good rhetoric. For example, Wal-Mart’s recent call to raise the minimum wage – they pay well above it but their competition doesn’t.  Again “cui bono?”  One can be a defender of capitalism but a critic of capitalists, and the skills and values of a liberal education can enable students to engage that work and make that important distinction. Again, there might be much to disagree about over my take on the merits of capitalism, but that very disagreement itself is yet another value of a liberal education:  exposing students to multiple narratives of the world and equipping them with the skills to sort out the better from the worse.

More generally, the whole idea that market order emerges “unplanned” or “unintentionally” from individual actions requires that students go beyond/behind believing that politicians or capitalists or the Fed “control” economic outcomes.  It requires the critical thinking skill of “seeing the unseen” – which, by the way, is not a bad definition of economics.  Seeing that gas prices change for reasons other than the greed of oil companies (have they all had a psychological conversion experience in the last few weeks?) or that they are not controlled by the President (which apparently people seem to believe, based on the inverse correlation between gas prices and his approval ratings) involves seeing through rhetoric and understanding long chains of causation that lead to abstract patterns of unintended order.  Seeing the unseen and understanding that most social order is not intentionally designed are two accomplishments of the critical thinking skills that should be at the core of a liberal education.  They also happen to be skills that can be part of a case for capitalism.

Finally, if a liberal education is about acquiring critical thinking skills and a skepticism toward manipulative rhetoric, aren’t attempts to get students to think critically about the power and rhetoric of the state, and not just with respect to the so-called “war on terror,” and imperialism, and threats to civil liberties more generally, but also with respect to the state’s interventions into the marketplace, completely consistent with that goal?  Collateral language can be found in all kinds of places.  Prof. Schor raised the potential biases and silencing that might come from faculty who occupy corporate-named chairs, or students who learn in corporate-named classrooms.  Fair enough.  But the number of students in that situation is dwarfed by the number of college students (and faculty) who learn and teach at entire institutions with the word “state” in the title, or whose research is sponsored by tax dollars.  Shouldn’t we, as liberal educators, be asking the same questions of them?  How critical of the state can one really be when one is getting grant money from the NSF or NEH or DoD, or when one’s Board of Trustees are politically appointed or elected?  If your response is “state actors don’t care that much about what faculty do in the classroom or with their grants” then either you have to explain away the unfortunate political success of David Horowitz and his ilk or you have to be willing to say the same of corporate donors.  You can’t eat your conflict of interest cake and have it too.

So yes, a liberal education can produce a defense of capitalism.  And critics of capitalism should be careful not to forget that the answer is yes, lest they turn liberal education into an ideological weapon, and do grave damage to its long and noble history, and a whole bunch of students, in the process.

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Author: Steve Horwitz
  • Great points; I couldn’t say it better myself. My favorite part was pointing out the obvious conflict of interest in working in “State” schools and eating ones proverbial conflict of interest cake and having it too.

  • adrianratnapala

    Hmm, at a philosophical level the talk seems to conflate “Can a Liberal Education Produce Defense of Capitlaism?” with the question “Can a Defense of Capitalism produce a Liberal Education?” That is Horowitz gives various example about how showing students a pro-capitalist idea helps them learn to think for themselves.

    At a more practical level, I suspect that such pairs of questions are inseparable. If students hear only one side of an argument, then even the clever ones will usually go along with it. This might be OK when it comes to the conservation of momentum, but not when it comes to capitalism and its discontents.

  • Great post. I agree with almost every word. The words I have a problem with are ‘capitalism’ and ‘capitalists.’ You said you have a problem with at least one of these yourself, but you decided to bow to common usage. I wish you hadn’t. By using those words you shot yourself in the foot. Imagine an astronomer trying to enlighten people about the stars but bowing to popular usage by adopting astrological concepts. He is crippling himself. Imagine a biologist trying to explain to backward farmers how cattle become diseased, but respecting their traditions by talking in terms of evil spirits, spells and charms. No hope.

    • What’s your preferred terminology?

      • I talk of the market, or the free market, or open markets, or even a market society. I have no preferred term for ‘capitalists,’ just as I have no preferred term for ‘witches.’

        • good_in_theory

          You’d have to be completely delusional to think that “capitalist” does not refer to reality.

          • We’ve had this discussion before.

          • good_in_theory

            And you’re pretty clearly wrong, so it’s sort of odd that you continue to belabor the position.

  • Pingback: Can a Liberal Education Produce a Defense of Capitalism? | Bleeding Heart Libertarians | THINKING: Middle of the road Libertarian? Maybe…()

  • A fine defense, as far as it goes and undoubtedly provocative to those who haven’t heard these points before. But we desperately need more: careful scholarly engagement with the particulars of the **consumer** experience, both contemporary and historical, from perspectives that take seriously consumer agency and the complex dynamics through which personal and cultural meanings arise in the marketplace. Attempts at seller manipulation are part of that story, but only part and not always with predictable or deleterious results. Neither economists nor philosophers are well suited for this sort of research. It requires studying questions that many libertarians think are trivial (shopping!) because they do not concern the state, but that do concern what it means to be a free individual in the marketplace.

    • Steven Horwitz

      No argument Virginia. Given the audience, this was the way to go.

    • Somebody oughta write a book!

  • Three things. First, economics is a social science, not a liberal art — and a true “liberal education” is a concentration on the liberal arts. Second, what happens if the demand on the sweatshop increases? At what point does the labor supply become finite and hence a more valuable resource? (And that means more pay to the workers.) At what point do we start approaching the situation of China where the workers are demanding to have the enjoyment of some of the products they are producing?

    Third, and most important, at what point — with our advanced communication and such — does working conditions of employees become a marketable aspect of a product? “Fair Trade Coffee” comes to mind — back in the 1970s, the Catholic Church largely put an American clothing manufacturer out of business because of their labor practices. And WalMart is under scrutiny that no grocery store chain ever would be — and the grocery stores often exploit their workers worse than WalMart would ever dream of.

    “Recycled” paper, “sustainable” lumber, all of this is marketing and it does work.

    • Steven Horwitz

      Ed, I think you don’t understand what the “liberal arts” are. Economics, and the other social sciences are most *definitely* part of the liberal arts, as are the sciences. Perhaps you’re confusing “liberal arts” with “humanities.” In addition, I used the phrase “liberal education” not “liberal arts.” Even so, the latter refers to all non-professional education, so eliminating business, engineering, nursing, and other pre-professional programs.

      Economics is most assuredly part of the liberal arts.

  • “Thus when political actors, including private sector interest groups,
    mouth platitudes about the public good, public choice economics leads us
    to ask “cui bono?” – what’s in it for them? ”

    Well, if ideals count for nothing and it is all self-interest, we can address exactly the same question to self-proclaimed libertarians, noticing perhaps the strong representation of economically secure white males in their ranks …. cui bono indeed!

    • Cal

      Libertarians do indeed address exactly the same question to libertarian political actors qua political actors (eg David Friedman on the Libertarian Party), but not to discredit substantive arguments from anyone. That’s missing the whole point.

  • ThaomasH

    The answer is so transparently yes that the context of the question needs to be explained. I am always a bit suspicious of people who try to persuade me of things that seem obvious, feeling that the intent is to persuade me of something else.

  • michaelstrong

    I went to the University of Chicago in the 1980s as a liberal arts student who wanted to prove that the Chicago economists were evil. After spending some time there studying economics, I realized that I had known nothing about economics. As I learned economics, I became libertarian, and now buy some variant of Steve’s arguments above.

    With respect to the issue of consumerism, I’ve come to a position similar to that of Arnold Kling (markets fail, use markets): The problem is that we do not have enough markets, not that we have too much. In particular, government control of education is the cause, excessive consumerism is the symptom. See “The Creation of Conscious Culture through Educational Innovation,”

    Ultimately the solution to the problem of excessive consumerism, which I do regard as a serious problem, will involve free markets not only in education, but in career opportunity (no occupational licensure), insurance (accurate pricing of the costs and benefits of diverse habits and attitudes), and community formation (essentially ancap, though the state may remain as a vestigial limb somewhat like the Queen of England).

  • David

    So, libertarians and leftists both think “critical thinking” exercised properly will lead students to agree with the positions they already hold, and they both seem pretty confident about it.

    Is this meant as an exercise to demonstrate that “critical thinking” is devoid of content until the clever ideologue deploys it to guide undergraduates to her desired conclusion? I’m not sure what other conclusions I’m supposed to be drawing here…

    • We cannot say in advance what the conclusion of critical thinking will be. In fact, there can be no conclusion of it, in the sense of ‘termination.’ Any conclusion, in the sense of ‘inference,’ may itself be subject to criticism and so is only a temporary resting point.

      You are right to be sceptical of what is often labelled ‘critical thinking.’ I avoid books on that subject because the bits of books on it that I have read (before giving up) have been exercises in dogmatic thinking. It is a fact that many (I think, most) theorists think that, when ‘exercised properly,’ critical thinking will lead to (final) conclusions that they personally endorse. This is symptomatic of the dominant tradition in western philosophy, encompassing both rationalists and empiricists, which sees rationality as dictating, and thus leading to ‘conclusions with which no one may reasonably disagree.’

      I criticise this dogmatic/authoritarian conception of rationality, and contrast it with the opposing Ionian/Popperian/libertarian conception, in a somewhat polemical paper available here:

      The topic is also discussed by Popper in many papers, including ‘On The Sources
      of Knowledge and of Ignorance,’ which is available here (part 1):

      and here (part 2)

    • Sean II


      I think you were supposed to draw the conclusion that a liberal education, if it lived up to its professed values, would tend to produce a defense of capitalism at least as often as not, maybe more.

      The problem I see is that if liberal education ever started living up to those professed values, there’d be about 12 universities left in all of North America. Critical thinking is hard work, and its results can be quite depressing. Deconstructing rhetoric takes patience and time, and it tends to make one unpopular at parties. Showing off either trick in a job interview is madness.

      Probably 29 out of every 30 students believe the purpose of a liberal education is to learn a certain set of habits, acquire a certain vocabulary, and gain entry into a certain class. They don’t mind taking their opinions off the shelf, provided those opinions mark them out as hip, morally aware, and above all as reliable servants of consensus. They don’t mind being told WHAT to think, but if anyone ever threatened to start teaching them HOW to think, they’d probably seize the Provost’s office and start a revolution just to make it stop.

  • D.A. Ridgely

    I still consider it a parental failing on my part that I could not convince my son to answer college application questions about his humanitarian efforts by stating he had invested some of his savings in Nike stock.