A Journal for Western Man

 

 

 

Hudgins Letter in Wall Street Journal

Dr. Edward Hudgins

Issue LXXVI- October 19, 2006

 

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The October 14-15, 2006, Weekend edition of the Wall Street Journal featured a letter to the editor by Atlas Society/Objectivist Center Executive Director Edward Hudgins. Under the heading “Economic Individualism and the Only Truly Just Society,” Hudgins commented on an October 10 editorial page essay in the Journal by Edmund Phelps, the 2006 Noble Prize winner in economics.

Hudgins wrote that, “Phelps advocates economic individualism but moral collectivism. He is on the mark to distinguish the dynamic, open capitalism found in America from the corporatism of established interest groups and government bureaucrats found in Continental Europe (where Mussolini seems to have won!). He’s also correct that capitalism allows all to find a greater sense of self-realization in their work. And he’s right to trace resentment against capitalism to a confusion of the entrenched, government-protected businesses with true entrepreneurs who must survive through open-market competition.”

Hudgins went on to say, “But he’s mistaken to use John Rawls’s standard of social justice. Under this standard, capitalism is unjust if it results in ‘raising the scores of some, though at the expense of reducing the score at the bottom,’ compared with other feasible systems. Prof. Phelps argues that, in addition to the evidence of history that under capitalism everyone wins economically, ‘In an economy in which entrepreneurs are forbidden to pursue their self-realization, they have the bottom scores in self-realization.’ Thus, capitalism is just.”

Hudgins elaborated: “Yet Rawls’s standard is wrong. Capitalism is based on the freedom of individuals to pursue their own self-interest as long as they don’t initiate force against others. This means that no group is entitled to any given distribution of benefits; individuals must earn their wealth by producing goods and services with which to trade with others. Some individuals and enterprises might be worse off in the short term, perhaps because of their own lack of initiative or adherence to out-of-date strategies, like corporatists in Europe and elsewhere. But these corporatists use Rawls’s standard to justify their stagnant systems. If they open their systems, they argue, there will be lots of immediate losers with a few, perhaps hypothetical, future winners. Such a collectivist argument is guaranteed to kill entrepreneurial capitalism.”

Hudgins concluded that, “Prof. Phelps says, ‘Ayn Rand went too far in taking ... freedom to be an absolute.’ But if the individual rather and a statistical group is the ultimate subject of justice, then freedom is the highest good in the only truly just society – a capitalist one!”

The Atlas Society & The Objectivist Center


email: toc@objectivistcenter.org

phone: 202 296-7263

web: http://www.objectivistcenter.org

This TRA feature has been edited in accordance with TRA’s Statement of Policy.

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Learn about Mr. Stolyarov's novel, Eden against the Colossus, here.

Read Mr. Stolyarov's new comprehensive treatise, A Rational Cosmology, explicating such terms as the universe, matter, space, time, sound, light, life, consciousness, and volition, at http://www.geocities.com/rational_argumentator/rc.html.