Throughout this blog, I will use the word “good.” I mean “good” in a moral sense. For example, when I say “markets, in general, do good,” this is not a grammatical mistake. I mean it literally: they do good.
So, the question then becomes “why do markets do good?” This is a worthy question worth exploring and people far smarter than I have written extensively on this matter. But allow me my small contribution to the discussion.
My discussions of morality will come primarily from Christian roots. I was raised a Christian and I live as a Christian and this is the moral sense I ascribe to.
The moral argument of Christianity can be summed up in what is commonly called “The Golden Rule”: Do unto others as you would have them do unto you. Markets fulfill this rule. As we have previously discussed, markets are voluntary, exchange-based institutions. Therefore, in order for a trade to occur, there must be reciprocity: one cannot receive without giving. In a market transaction, no one party can compel the other to act. Given the reciprocity, one party does unto one as he would have done unto himself. This nature of voluntary exchange, I believe, are what makes markets moral. i would also contend that if force is applied in a market situation (whether by either party or by a 3rd party) the transaction is therefore immoral. By using this criteria, it is one of the reasons I argue minimum wage is immoral, but we can go into detail on that later.
Markets are moral. They are good and they do good. And that’s the way it is.