Natural religion and “moral capitalism”: Insights from Adam Smith and Thorstein Veblen

Abstract

Purpose

At the 2009 Devos economic forum on the global financial crisis, David Cameron, then leader of the British Conservative Party and now Britain's Prime Minister, called for embracing a “moral capitalism.” The purpose of this paper is to consider the insights into a moral framework for the modern economic order that might be drawn from natural religions perceived by Adam Smith and Thorstein Veblen.

Design/methodology/approach

A review of the two perceptions of natural religions provide the basis for assessing their compatibilities with the type of competitive market economy that Smith observed in the eighteenth century, and with a modern market economy of large corporate enterprises and global financial markets. Particular attention is given to reforms that curb the practices that led to the global financial crisis.

Findings

Smith's “pure and rational” natural religion has been interpreted as being compatible with the type of competitive market economy that he analyzed in Wealth of Nations. Veblen's natural religion of “Christian morals” had a natural rights analogue in the ethics of a competitive market economy in which market relationships were heavily influenced by production resting heavily on personal skills of craftsmen and trade relying on the honesty of small merchants.

Research limitations/implications

The primary focus is on reforms in those aspects of the financial sector of the modern market system that have been associated with the current global financial crisis. What the two natural religions might suggest in the nature of broader socio‐economic reforms, e.g. corporate governance issues, would require a much larger study.

Social implications

While debates over a “moral capitalism” will be influenced doctrinal stances of institutional religions, sectarian differences may be bridged by considering natural religions that are rational and rest on the principle of fair play and mutual service.

Originality/value

Because of the attention that has been given to Smith's and Veblen's critical commentaries on institutional religions, the paper shows that their perceptions of natural religions and how those religions might relate to the economic order are easily overlooked.

Citation

Leathers, C.G. and Patrick Raines, J. (2011), "Natural religion and “moral capitalism”: Insights from Adam Smith and Thorstein Veblen", International Journal of Social Economics, Vol. 38 No. 4, pp. 330-340. https://doi.org/10.1108/03068291111112031