The Moral Promise of Free Enterprise
Course DescriptionThe words happiness and free enterprise don't usually appear in the same sentence. But Arthur Brooks, President of the American Enterprise Institute, shows that the two are intimately and profoundly connected. The free enterprise system not only creates wealth, it creates the best chance we have to achieve personal satisfaction.
Taught ByArthur Brooks
Login to Receive Credit!
TranscriptWhen you hear the words "free enterprise," or "capitalism" or "free markets," whatís the first thought that comes into your head? For just about everyone it would have to do with making money.
But thereís another side to free enterprise thatís actually more important. Free enterprise matters not just because of its unparalleled material benefits, but because of its unparalleled moral benefits.
Now, this might seem counterintuitive to you, especially if youíve been spending a lot of time hanging around college professors. For decades, so many of them have preached that free enterprise is mostly about selfishness and greed.
But after the fall of the Soviet Union, and communism was repudiated, even the left grudgingly acknowledged the utility of free enterprise -- but only as a necessary evil. Sure, they said, free enterprise benefits us materially. But the cost is not worth it. People become too materialistic, corporations become too powerful, profits are corrupting, and there is just too much material inequality.
Is this a fair assessment? No, it isnít. And hereís why: free enterprise is not just materially fulfilling, itís a moral imperative. One big reason is that only free enterprise enables us to become truly happy -- because it enables us to earn our success.
Now what do I mean by this? Earned success is the satisfaction and happiness that we derive from having dreams and working hard to achieve them. This is only possible in a system where rewards are based on earning them rather than on having the right connections, and where you have to please customers and not politicians.
Think about the things in your life that make you happy. Itís probably your personal relationships, your family, and maybe your job; in other words, the things that represent hard work and personal virtue and achievement. Sure, we all want nice things. But if they are just given to us, if we donít earn them, they donít really make us happy.
Youíve probably thought about what youíd do if you won the lottery, right? Weíve all played that game. Maybe you say youíd buy a big house, a new wardrobe, or take a great trip around the world. Maybe youíd do it all!
The truth is, according to data from researchers at the University of Michigan, youíre actually more likely to be less happy after you win than before you bought the ticket. People who win the lottery typically buy a bunch of stuff they donít want, get new friends, some even become alcoholics. This hardly makes for a great Powerball ad campaign, but itís the truth.
Why is this? For the same reason that your parents probably always taught you: money doesnít buy happiness.
Still, critics on the left tell us that if we only had more equal incomes weĎd be a happier society. Thatís just not true.
Happiness is earned, not given by others. Look at entrepreneurs. People who own their own businesses rate themselves as happier than just about any other job category. Any why? Whatís their secret?
Itís not as if theyíre working short hours, or making lots of money. Neither of these are the case. Entrepreneurs earn 20 percent less than government managers, on average. Rather, itís because their businesses allow them to earn their own success. It is this success that makes them happy. And this is really only possible through free enterprise. The government giving us stuff we didnít earn doesnít make us happy, and itís really that simple.
This insight is hardly one I came up with. In fact, no one in my field of social science can claim credit for it. It was Americaís founding fathers who first put together happiness and earned success.
You probably remember that the Declaration of Independence talks about the rights to "life, liberty, and the pursuit of happiness." Think about those words Ė pursuit of happiness. Our founders didnít say that you have the right to be happy. Only that you have the right to pursue happiness.
And thatís what free enterprise does, and why it matters. Only free enterprise lets us decide what makes us happy and then go do it. You can read more about this in my book, The Road to Freedom: How to Win the Fight for Free Enterprise.
The pursuit of happiness thatís at the root of Americaís moral promise can only happen if we have the opportunity to earn our success. Happiness is not about materialism or government redistribution of wealth. Itís about defining our lives and our goals, and achieving happiness on our own terms.
That is the moral promise of free enterprise.
Iím Arthur Brooks, President of the American Enterprise Institute, for Prager University.