The nature and moral content of capitalist profits
In a competitive environment, wealth often comes from luck, replacing others, and capital strength, so moral considerations are irrelevant, and therefore it can be said to be unrelated to morality.
Author: GUDORDI | 2025-04-08
資本主義社會在本質上是不道德的。
The capitalist system is unethical.──奈特（Frank Knight），1982年諾貝爾奬經濟學得主佐治史德拉（George Stigler）引述
筆者今回續談凱恩斯提出的「動物精神」（anumal spirits）概念，以及這個概念對經濟發展的重要。
Giants in the field of economics
George Stiglitz, the 1982 Nobel laureate in economics, wrote that his teacher, Knight, said the above passage . Strictly speaking, whether this sentence actually came from Knight is debatable, as Knight did not say this in publicly published literature . If it is true, the context cannot be ignored , because sentences without context often contain some misleading elements . Moreover, Stiglitz recalled an even more extreme second half: ” it will only lead to a cumulative growth in wealth concentration and social inequality.” At first glance, this statement seems somewhat arbitrary, but upon closer examination, it is not insignificant. As Keynes said, ” Words ought to be a little wild , for they are the assault of thoughts on the unthinking. “
Knight is a giant in the field of economics. Although his publications are not numerous, he is widely regarded as a founding father of the Chicago School of Economics, and countless of his students have won Nobel Prizes in Economics , with Struth being just one of them. Struth quotes the above passage to illustrate that Knight’s thinking style is not one that emphasizes logical reasoning, but rather one that is highly inspiring , encouraging students to think about problems from different perspectives. It is probably no coincidence that so many of his students have won Nobel Prizes . Moreover, it is said that the inspiration for Gauss’s two epoch-making papers, “The Nature of the Firm” and “The Problem of Public Losses,” which won the 1991 Nobel Prize in Economics , came from his youth when he passed by the University of Chicago and audited Knight’s lectures.
Knight: Capitalist profits have nothing to do with morality
Although there is no record of Knight saying this in publicly available documents , he likely did so in casual discussions. Despite the somewhat fanatical worship of markets in his era, Knight consistently maintained a cautious and reserved attitude towards market mechanisms. He once wrote that in a competitive environment, wealth often comes from luck, replacing others, and capital strength, and can be said to disregard moral considerations, and therefore be unrelated to morality.
However, despite Knight’s reservations about the ethical implications of market mechanisms and profits, he may well be the pioneer, or even the foremost figure, in upholding the legitimacy of capitalists ‘ profits. In a 1921 article titled ” Risk, Uncertainty, and Profit,” Knight pointed out that economic development often involves many uncertainties, and these risks are unanalyzable and cannot be transferred to others through insurance or other means. Capitalists bear these risks, and without someone else willing to take them, economic development and breakthroughs are impossible. Therefore, allowing capitalists to profit is perfectly reasonable.
Key factors for Shenzhen's success
This leads to the question: under what circumstances will there be enough capitalists willing to take on enough risks to propel the economy to another level? Perhaps because these questions are difficult to quantify or mathematically quantify, there is very little relevant literature in the field of economics . Keynes’s concept of “animal spirits” in his 1936 work , “A General Theory of Employment, Interest and Money,” is probably the earliest article to address this issue and one of Keynes’s greatest and most original contributions to economic theory .
More importantly, could this concept be a key reason why Shenzhen’s economic performance has differed so greatly from that of Eastern European countries over the past 30 years? Yes, to ignite the animal spirit in the market , there needs to be a sufficient number of capitalists and entrepreneurs with sufficiently optimistic and reasonable expectations for the future, and these expectations tend to be self-fulfilling .
Could the fact that Shenzhen has historically had a large enough population to believe that a better future is possible through hard work be the main factor in its success? And could the lack of sufficient “animal spirits” be the root cause of Hong Kong’s current economic predicament? I will discuss this further later.
