Basic Economic Liberties: John Rawls and Adam Smith Reconciled

Abstract

The moral status of economic liberty is a critical point of contention within liberal theory. Classical liberals, including Tomasi, suggest that economic activity is fundamental for exercising personal autonomy and its protection to be to the overall benefit of all persons. By contrast, egalitarian liberals, following Rawls, argue that economic activity is not a sufficiently significant site of moral development. Drawing on contemporary interpretations of Adam Smith, I argue that commercial practices cultivate attitudes of mutual trust and respect in a way that is unique and necessary for developing the moral powers. Although they need not be universally exercised, basic economic liberties must be available to all. While rejecting laissez-faire, this case suggests that well-ordered societies must protect a substantial degree of commercial activity as part of the basic structure.

Individualism, Economic Freedom, and Charitable Giving

“…The market process has properties that not only tap into our capacity for "mutual sympathetic fellow feeling," but also promote individuals' maturation by aligning their conduct with the "moral rules, just rules, that govern our conduct in impersonal markets" ( Smith and Wilson 2019 , 5-8). Insofar as market systems rely upon peaceful, voluntary exchange (most often between strangers), commercial interactions create an ethic of treating strangers with dignity and respect ( Cowen 2021 ;Hirschman 2013 ;McCloskey 2010 ).…”

“…However, we should take care with such an interpretation. Available measures of economic freedom emphasize formal rules rather than the actual practice of participation in market activity among equals ( Cowen 2021 ). Yet, practices play a constitutive role in establishing formal institutions .…”

Introduction to Neoliberal Social Justice

“…[C]ompetitive prices select the goods to be produced and allocate resources to their production in such a manner that there is no way to improve upon either the choice Nick Cowen -9781800374546 Downloaded from Elgar Online at 05/10/2021 05:51:27AM via free access of productive methods by firms, or the distribution of goods that arises from the purchases of households. (Rawls, 1999, p.240) By using this allocative conception of political economy, Rawls subtly rules out the likelihood of conceiving economic liberty as a site of moral development (Cowen, 2021). Rawls uses this economic theory when developing the institutional implications of justice as fairness.…”

Market Participation, Self-respect, and Risk Tolerance

“…In answering these critics, we acknowledge that justifications for the ethical role of business in democratic societies have so far fallen short of reaching precise Rawlsian standards. Nevertheless, there remains a puzzle: real-world liberal democratic societies, including those that come closest to representing Rawlsian commitments, have widespread markets and constitutions with systematic protections for private property and economic liberty (Cowen, 2021a;Sumner, 2015). We offer a solution to the puzzle which is that market participation makes a unique contribution to fostering stable social cooperation in a way that reconciles self-respect with tolerance for unavoidable risks associated with engaging in democratic life.…”