Knight held that capitalism’s survival paradoxically requires individuals to defy its own incentives

Evidence

Knight worried, in par tic u lar, about the moral life of marketcentered societies. It was neither common nor desirable, he observed, for individuals to decide how to act on the basis of rational calculations of their own fi nancial interests. Even those at the highest levels of business enterprise pursued profi t more out of a love of competition than a desire for monetary gain. He wrote in Risk, Uncertainty and Profi t that they “consume in order to produce rather than produce in order to consume, in so far as they do either. The real motive is the desire to excel, to win at a game, the biggest and most fascinating game yet invented, not excepting even statecraft and war.” Indeed, actions pursued purely for interests that economists would defi ne as “rational” were widely considered abhorrent. The “rational, economic, criticism of values gives results repugnant to all common sense,” he observed in his 1922 essay “Ethics and the Economic Interpretation,” and the “economic man is the selfi sh, ruthless object of moral condemnation.” Market societies encourage such undesirable behaviors while discouraging the production of values not refl ected by the price mechanism. … Knight believed that a capitalist society could sustain itself only to the extent that it consisted of individuals whose behavior departed from the norms it incentivized. — Angus Burgin, The Great Persuasion, 95

Categorization

• XREF: Complicates the standard map of ‘neoliberal’ thought: Knight as skeptical of the moral economist’s rational man — connects to later chapters on how MPS thinkers reconciled markets with values. — connects to: Capitalism sustains legitimacy through broken promises, not fulfilled ones — Aris Komporozos-Athanasiou, Speculative Communities: Living with…, 118; Capitalism requires perpetually unsatiated desire to maintain civilizational growth — David Theo Goldberg, John Solomos, A Companion to Racial and Ethnic Studies, 3420; Capitalists themselves are compelled to innovate by impersonal market forces — Clara E. Mattei, Escape from Capitalism, 124
• DEEPTHINKING: The paradox that a market system must depend on actors behaving against its own incentives is a dense, generative tension — anti-moral utilitarianism, a founding problem for the whole MPS project.

Broader Connections

• Capitalism sustains legitimacy through broken promises, not fulfilled ones #complicates (0.80) — Aris Komporozos-Athanasiou, Speculative Communities, 118
• Capitalists themselves are compelled to innovate by impersonal market forces #qualifies (0.78) — Clara E. Mattei, Escape from Capitalism, 124
• Capitalism requires perpetually unsatiated desire to maintain civilizational growth #complicates (0.72) — David Theo Goldberg, John Solomos, A Companion to Racial and Ethnic Studies, 3420