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The Moral Status of Market Competition

One of the main criticisms of the market economy leveled by people of faith is that the market thrives on competition, incentivizing the voracious and oppositional features of human existence. Walter Rauschenbusch captured this concern in his classic exposition of what he called “the law of tooth and nail” in Christianizing the Social Order (1912). “The moral instinct of men has always condemned competitive selfishness,” he wrote, “just as it has always admired the moral beauty of teamwork.”

The moral cogency of the argument against competition is enhanced in a framework where the goods that are sought after are static. Whether conceived of in terms of market share or the size of a firm, business and political leaders often use language that makes it seem as if economic gain comes at the expense of others. Indeed, this is an economic perspective with a lengthy historical pedigree. As the New Testament scholar Craig Blomberg writes, this is sometimes called a “theory of limited good,” and it was characteristic of the biblical world: “Most people were convinced that there was a finite and fairly fixed amount of wealth in the world, and a comparatively small amount of that to which they would ever have access in their part of the world so that if a member of their society became noticeably richer, they would naturally assume that it was at someone else’s expense.”

This theory of limited good has been known by many names and taken many forms. The Austrian economistLudwig von Mises called it “Montaigne’s fallacy,” after the famous early modern French essayist Michel de Montaigne, and according to which, as Mises put it, “human intercourse cannot consist in anything but the spoliation of the weaker by the stronger.” The Spanish Jesuit Juan de Mariana (1536-1624), who likewise possessed remarkable wit and intellectual courage, also picked up the idea from the ancient philosopher Plato that “one man’s profit is another’s loss.” This, said Mariana, is one of the “fundamental laws of nature,” and meant that “one man’s loss is another man’s gain. There is no way around that fact.”

It would not be until some of the more historically recent insights into the nature of subjective valuation of goods, innovation, and technological progress that the idea of the amount of wealth in the world as a static thing, a “zero-sum game,” began to be effectively challenged. But as Charles Murray of the American Enterprise Institute reminds us in a recent commentary in the Wall Street Journal, this destructive view of economic life is still with us: “Americans increasingly appear to accept the mind-set that kept the world in poverty for millennia: If you’ve gotten rich, it is because you made someone else poorer.”

But if economic activity is conceived of as at its core consisting of mutually-beneficial exchanges, then “human intercourse,” to use Mises’ description, need not fundamentally manifest in “spoliation of the weaker by the stronger.” And, indeed, if the measures of economic activity are expanded to include realities beyond market share and relative inequalities, we can see that competition, rightly conceived, can be a force for much good in the world. Market economies tend to reward those who serve others well and meet the needs and wants of their customers. If the competition among various market players is cast as competing to surpass one another in providing increasingly excellent goods and services, then it becomes easy to see the virtue of competition. As the economic educator and entrepreneurial leader Manuel Ayau put it, in a market economy “in a very real sense, we all compete to enrich others.”

The comparative orientation at the heart of competition can certainly work itself out in destructive ways. As Thomas Aquinas noted, when we observe good in others that surpasses what we possess ourselves, there are two basic responses. One is to grieve at the good another possess, to envy it, and very often out of a malicious spirit to seek its destruction. This, says, Aquinas, “is always sinful,” for “to do so is to grieve over what should make us rejoice,” that is, “our neighbor’s good.” But on observing a good which our neighbor has that we do not possess can also spark a different reaction: zeal for virtue and self-improvement. Observing a relative lack in ourselves, we can be moved to address the lack not by tearing others down but by addressing our own flaws and weaknesses. This zeal is praiseworthy especially when the sought-after good is spiritual, but it can also receive moral approbation when temporal goods are sought after judiciously and prudently.

Where the market economy can engender a spirit of competition, Christians must work to assure that the competitive spirit is expressed in, and when necessary transformed into, a zeal for doing good for others. As the Apostle Paul urges in another context, we should seek to excel one another in serving others: “Outdo one another in showing honor” (Romans 12:10 ESV). When competition is construed as seeking ways to love one another better, it becomes a virtue of the market economy that ought to be celebrated rather than scorned.


Jordan J. Ballor is associate editor at the Acton Institute.

(This article is a product of the Acton Institute — www.acton.org, 161 Ottawa NW, Suite 301, Grand Rapids, MI 49503 — and is reprinted with permission.)


  • springmom

    And of course, it’s important to realize that competitiveness in the marketplace can come about because someone worked hard and thought hard about what his or her neighbors NEEDED and produced it. “Build a better mousetrap and the world will beat a path to your door.” When, for instance, a drug is invented that cures AIDS once and for all, would we *actually* expect the inventor not to receive compensation for his find? Of course not (or at least I hope the answer to most people is an obvious “of course not”!) Where a free market becomes immoral is where the person who TRIED to invent said drug puts in on the market anyway, knowing full well that it has horrific side effects. I love the last sentence: competition construed as seeking ways to love one another better. That ought to be engraved on the desks of every CEO on the planet :-)

  • http://www.facebook.com/people/Bill-Baltar/100000650491133 Bill Baltar

    Should
    we encourage each other to be virtuous? Yes. Are we (Americans)
    socialized and virtuous enough to call for unbridled competition? Is
    there such a society? No; that’s why the CCC 2425 says (among other
    things) the Church has refused to accept, in the practice of
    “capitalism,” individualism and and the absolute primacy of the
    law of the marketplace over human labor. … Regulating it (the
    economy) solely by the law of the marketplace fails social justice,
    for there are many human needs which cannot be satisfied by the
    market. Reasonable regulation of the marketplace and economic
    initiatives, in keeping with a just hierarchy of values and a view to
    the common good, is to be commended.

    Let’s
    talk more about the just distribution of the common goods of our
    states and businesses based on merit/contributions.

    (It
    appears the author has misinterpreted the words of Saint Thomas.
    The recognition of another person’s good actions as a reason for
    self-improvement is not competition. It also appears he has
    misinterpreted the verse from St. Paul’s letter. I think the
    outdoing referred to in certain translations of Romans 12:10 has to
    do with the way that we relate to each other in charity. It’s
    has nothing to do with competition.)