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    In recent contributions to First Things, theologian R.R. Reno and legal scholar Robert T. Miller have debated several questions concerning conservatism, capitalism, and the government’s economic role. Obviously, the discussion is complicated by the inexactitude of words like “conservative” and “capitalism.” But fundamentally, their debates address the present-day scope of economic freedom in America and throughout the world.

    Are we, as Reno claims, living in the age of the market economy’s triumph? Or are we, as Miller maintains, in fact witnessing significant erosion of freedom throughout much of America’s economy? But could it also be that this discussion, as important as it is, doesn’t engage one area of debate about the market that some conservatives seem quite reluctant to address?

    One of Reno’s contentions is that capitalism generally has no significant rivals today, unlike, say, the situation that existed before communism’s collapse. In that sense, he argues, markets have triumphed.

    But Reno also holds that capitalism’s very success means that the turmoil of creative destruction, unleashed on a global scale, is harming America socially and economically. For Reno, this means conservatives should accept the necessity of politically limiting “economic freedom, whether directly through regulation, or indirectly, through taxation.”

    In response, Miller points out that economic conservatives aren’t generally against regulation per se as a tool for addressing economic problems. Economic conservatives have, however, usually studied regulation’s effects very carefully and, while sometimes willing to affirm it in particular areas, are consequently attuned to regulation’s far-too-often counterproductive results.

    Miller also notes that “in the United States today we have vastly more economic regulation than at any time in the past.” He stresses, for example, that the financial sector is now subject to literally thousands more pages of regulation than 30 years ago — and that’s not even including the pages of Dodd-Frank (not to mention all the interpretive glosses by courts and regulatory authorities that will emerge). Likewise Miller underscores that government programs that were supposed to have some of the tempering effects that Reno thinks we need have been in place in America for a very, very long time.

    Some fiscal conservatives are certainly too sanguine about creative destruction’s unintended negative effects on our lives. But these side effects are not sufficient reasons to try to slow or even stop the process, let alone assume that higher taxes and the welfare state (which itself breeds plenty of dysfunction) are the appropriate response.

    Still, it doesn’t seem wise to play down these negative impacts. Given the conservative commitment to limited government, it would seem that the authentically conservative response would be to investigate and apply Tocquevillian “civil society” solutions to such problems before looking to the state for remedies.

    One reason conservatives should take such proposals more seriously is that Miller is surely correct about the growth of regulation and its impact on economic freedom throughout America. Besides his evidence on the financial sector, there is also the trainwreck otherwise known as Obamacare (though, as Reno observes, the pre-2010 American healthcare situation was far from being a free-marketer’s dream) presently unfolding before our eyes.

    Then there are the trends highlighted in the comprehensive indices of economic freedom compiled by the Heritage Foundation and the Fraser Institute. The multiple indicators gathered together in these surveys indicate that economic freedom in America has been declining for several years, both by way of comparison with other nations and in absolute terms.

    Nor can anyone who has read Heritage’s Index of Dependence on Government really doubt how much the American economy has moved in significant, albeit uneven ways in social democratic directions. Among other things, this index details the steady increase in the number of Americans (both in raw terms and as a percentage of the population) receiving some form of direct government financial assistance.

    In many ways, the Reno-Miller debate gives us important insights into divergent patterns of thinking among American conservatives about the market economy. But their discussion doesn’t address another question about conservatism and the market that, in the long term, may well be more pertinent to capitalism’s triumph or downfall: What principled (as opposed to a merely utilitarian) case for economic freedom and its associated institutions can conservatives make?

    Considerable obstacles face anyone wanting to make such an argument. One impediment, for example, is our culture’s negative view of modern industrial capitalism’s rise and effects — a perspective profoundly influenced by Marxist and other left-leaning accounts of economic history but long since part of popular culture and absorbed by much of the academy.

    To be sure, the Industrial Revolution was not all sweetness and light. Alexis de Tocqueville, for instance, was disturbed by some of the scenes he saw in Manchester during his second visit to England in 1835.

    Yet as the Oxford economic historian Max Hartwell showed in his debates with Eric Hobsbawm (the unapologetically Marxist historian who stated in a 1994 BBC interview that 20 million deaths would have been a price worth paying to create a communist utopia), the evidence suggests strong correlations between industrial capitalism’s development and the overall steady growth in living standards (as measured by indicators like life-spans and nutrition levels) and significant diminutions in poverty in Britain and Western Europe.

    Hartwell may well have been correct about these facts. But does anyone doubt that decidedly negative accounts of modern capitalism’s emergence and its effects remain the prevailing wisdom in many people’s minds?

    Moreover, even if the historical arguments could be won, this would not in itself compensate for some conservatives’ perceptible unwillingness to advance robust principled cases for economic freedom. In some cases, this reluctance seems to flow from pre-existing commitments to philosophical skepticism and positivism and/or a general reluctance to make arguments that go beyond utility, sociology, and positive economics, perhaps due to a fear of appearing “unscientific.”

    The result is that, as even some modern liberals quietly concede, fiscal conservatives are very good at developing policies that positively transform people’s lives. But they seem far less able to articulate these market-oriented policies within an overall vision of the good that goes beyond efficiency and effectiveness.

    Sadly enough, this is not a new problem. In his book The Great Persuasion, the historian Angus Burgin illustrates that from the late 1950s onward, efforts in Western free-market circles to make “thick” moral cases in favor of markets were gradually supplanted by “a relentless emphasis on the superior efficiency of laissez-faire” and an abandonment of a “language of values.”

    There’s also a very practical difficulty with viewing normative questions as somehow hopelessly subjective and therefore irresolvable. The problem is that while many people might agree, for example, that markets are more efficient than other alternatives for wealth creation and economic development, the same people remained unconvinced of the moral case for economic liberty.

    If this is true, it should radically reshape the ways in which conservatives seek to address America’s economic challenges. Changing policies is important. But equally important is the need to develop defenses of economic freedom that flow from a coherent set of principles that have been carefully developed, critically analyzed, and rigorously defended.

    There have been some efforts to do so. Michael Novak’s The Spirit of Democratic Capitalism is one example, as is John Tomasi’s more recent Free Market Fairness. Though it is primarily a critique of John Rawls’s Theory of Justice, Robert Nozick’s Anarchy, State, and Utopia (which, as I’ve suggested elsewhere, has significant problems) was another attempt.

    Unfortunately, however, most people defending free markets today shy away from discussing the ends of human free choice and the content of human flourishing — at least in ways that avoid the circular autonomy-for-the-sake-of-autonomy arguments regularly encountered in free-market circles.

    I would maintain, though, that until fiscal conservatives start grounding the full canopy of activities and institutions associated with economic freedom in robust accounts of human fulfillment, they will struggle to make headway against the widespread skepticism concerning the morality of free markets. Arthur Brooks, with his emphasis upon “earned success,” has made some steps in the right direction.

    Far more, however, could be done by exploring how economic liberty and its institutions can facilitate the process whereby humans participate in moral goods and thereby transform themselves. Take, for example, the idea of entrepreneurship. When a person creates a new product or refines an existing service, he doesn’t just change the world around him. He also shapes himself interiorly by engaging his reason and free will in an act of self-determination that allows him to participate in some of the distinctly human goods (such as creativity and work) that lie at the heart of human fulfillment.

    Such arguments are, however, somewhat removed (to put it mildly) from most contemporary debates about the economy. Their development also involves the type of sustained investment in the formation of ideas that would, most likely, have long-term impacts rather than immediate payoffs. But until more conservatives choose to engage in this type of defense of market economies, they will, I fear, continue to find themselves losing much of the moral debate to those who want to take America further down a social democratic path. And that would certainly be a triumph of sorts — but for mediocrity and national decline.

    The article first appeared on The Public Discourse.

    Dr. Samuel Gregg is an affiliate scholar at the Acton Institute, and serves as the the Friedrich Hayek Chair in Economics and Economic History at the American Institute for Economic Research.

    He has a D.Phil. in moral philosophy and political economy from Oxford University, and an M.A. in political philosophy from the University of Melbourne.

    He has written and spoken extensively on questions of political economy, economic history, monetary theory and policy, and natural law theory. He is the author of sixteen books, including On Ordered Liberty(2003), The Commercial