ABSTRACT
Implied in the political-economy models of Owen, Ricardo, the Ricardian socialists, and Marx is a moral theory, universal in application. The underlying premise is that “exploitation”—which is an essential component of capitalism—is immoral and unjust. The acceptance of this moral interpretation is problematic, since for Smith and the Austrian School exploitation is a necessary component of capitalism (von Mises 1922; von Hayek 1952). Moreover, capitalism as a theory eschews any moral vision whereby justice is secured; rather, it prioritizes liberal freedom based on individual choice. Any transhistorical universal moral value is purposely omitted, since it was the belief of Adam Smith, like David Hume at the time, that morality was a matter of sentiment and relativistic in this regard (Hume 1751; Smith 1759). The market for Smith is to be left to the predetermined laws of supply and demand and rent-seeking individuals free of moral sentiment or moral theory that would otherwise obstruct market efficiency.
