ABSTRACT
The title of this chapter is, of course, the same as that of the celebrated paper which Frank Knight published over 70 years ago, in which he set forth what is probably the most powerful and profound ethical critique of the market economy ever written.1 Certain central elements in that critique have succeeded in establishing themselves as part of this century’s conventional wisdom concerning capitalism: they have come to be routinely restated in and absorbed from today’s principles textbooks in economics.2 The circumstance that a number of Knight’s most eminent students have, in the latter half of this century, come to be identified as the most prominent defenders of capitalism has not, in the mainstream perspective, suggested serious questioning of the validity of Knight’s criticisms. Rather this perspective seems to conclude that convincing defenses of capitalism can be achieved only by confining analysis within a narrow economic frame of reference (permitting one to ignore, at least, Knight’s ethical worries), or by remembering that Knight himself was careful not to imply that his critique requires us to deny significant merit to capitalism nor to suggest that his critique in and of itself established the ethical inferiority of capitalism to other possible systems of economic organization.
