Scholarly Comments on Academic Economics

Capitalism and the Rule of Love

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Abstract

This essay was originally published in 1953 in the Southern Economic Journal. Clarence Philbrook (1909–1978) proclaims as his point of departure “the rule of love,” “universal love,” and asks the central question of comparative institutions: Does undermining the liberal system of free enterprise, by pervasive government intervention—the awe-filling trend of his era—really better serve the rule of love? He contends that interventionism and extensive government serve the rule of love less well than capitalism does: “capitalism does less violence to the rule of love than would any other system so far conceived.” For that position he mounts a case that is noteworthy in many respects, but especially for the great emphasis he puts on system “signals”—a term he uses 17 times—“signals to tell individuals what they are to contribute toward the performance of some social function.” It had been only recently, in 1945, that contemplating system performance in terms of its “communication” had gotten started, by Friedrich Hayek. Here Philbrook boldly asks us to think in terms of pieces of communication, signals, in assessing how well institutional systems serve the rule of love.