In The Morality and Virtues of Capitalism and the Firm, Competitive Enterprise Institute founder Fred L. Smith, Jr. argues that businesses help people develop relationships that extend to other areas of life. In his new paper, Smith examines the positive impacts that can come from being a part of a business – ranging from stability to fairness to freedom.
“In a free society, people want fairness, financial and personal stability, community, and freedom,” explains Smith. “What people may not realize is that businesses need those values, too, for long-term success. Whether it’s your local hardware store or a big box store like Lowe’s, the same virtues are true to building a solid business.”
The problem is that while business leaders are generally effective at communicating the value of their firm, they often fail to articulate the morality of capitalism – the system that has made success possible. But as The Morality and Virtues of Capitalism and the Firm argues, as businesses grow and expand, business leaders can both keep and promote the core values that that make their businesses thrive.
Smith maps out the why and how for business leaders to defend the virtues of the business communities in which they work and live. He explains how capitalism operates in the real world through a key institution, the firm or corporation, which is a cooperative venture that must consider the values and wants of everyone in its community—customers, employees, suppliers, and investors. As a consequence, capitalism not only makes people wealthier, but also advances other important values and concerns we all care about, such as fairness and justice.