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Are Profits Moral?

I recently wrote about whether capitalism is compatible with Christian values, noting that the answer depends heavily on whether basic free trade is itself compatible.

In a new video from the Atlas Network, Tom G. Palmer explores the same question, offering an answer that is sure to rile many. Although Palmer avoids any discussion of Christian values, the parallels are not hard to discern.

Palmer uses the recent charity efforts of Bill and Melinda Gates as a launching pad for his discussion, focusing specifically on Gates’ language about wanting to “give back” his wealth to society.

“If you give something back,” Palmer notes, “it’s because you took it in the first place. You can’t give back what you didn’t take.”

Gates did not, of course, take anything from anyone (as Palmer duly explains). Rather, he participated in basic wealth creation — a process of producing value through mutual exchange (which Jay Richards helpfully describes as being “immaterial” in nature).

We are not forced to fill company coffers against our will. We are not doomed to buy oranges or apples if the price isn’t right. Instead, we are free to collaborate of our own free will and by our own consent. In such a world, profit is merely a symbol of community value. If we reject profits as immoral, we should be prepared to reject the community that empowers it. The tricky part, as I’ve mentioned before, is that this is most often ourselves.

This is what the “morality of profit” all boils down to: whether mutual exchange is indeed mutual. As Palmer explains:

There’s a crucial difference between profits gained by violating the property rights of others through theft, pollution, or special favors and subsidies on the one hand, and profits that are earned voluntarily through exchange on the other. Whether a transaction is voluntary or involuntary makes all the difference.

This is not to say that all profits are moral, but that the immoralkind are more likely to be found in your run-of-the-mill communist dystopia than your average American’s day-to-day business activity. As Palmer continues:

Profits earned honestly in the market are moral. They arise from morality and they reinforce morality. The search for profit through voluntary exchange teaches people to be civil. It encourages us to try to imagine what it’s like to be someone else and to ask what other people would like.

But the damage of zero-sum mythology doesn’t end at its distortion of the morality of profit. It goes further by perverting the nature of generosity. As Palmer notes in his concluding thoughts, it is generosity that the Bill and Melinda are engaged in, not payback. Why, then, do they position their giving as mere reimbursement or obligatory penance?

Indeed, by diluting our charity to some redistributionist obligation, we dilute the very potential of our charity, both for ourselves and our communities. How are we to maximize our generosity and distribute compassion effectively if we harbor faulty, guilt-ridden sentiments about how we got our resources in the first place? With such logic, the prospects for true, unadulterated virtue are grim indeed, regardless of how much material stuff we’re able to shift around in the process. It’s no wonder so many Christians believe in a Jesus who robs us and demands that we “go and do likewise.”

Everything is not win-lose. Or have you forgotten?