What is the moral-ethical foundation of capitalism?

Morality is the “science of self-preservation” and human fulfillment, or in the words of John Galt, the hero in Ayn Rand’s revolutionary novel Atlas Shrugged: “The purpose of morality is to teach you, not to suffer and die, but to enjoy yourself and live.”

And what does the science of morality tell us? It tells us if a flourishing life as a human being on earth is one’s goal, one must act according to one’s rational self-interest (i.e., the pursuit of happiness).

Rational self-interest means choosing to take those actions required by a human being, according to a reality-based, scientifically validated moral code of values, so that one may live a flourishing life on earth.

Rational means choosing to take a principled, long-range approach in one’s decision-making guided by reason. Reason is one’s means of grasping reality by a logical process based on the evidence of the senses (facts).

Self-interest (egoism) means to hold one’s life as the ultimate standard of value (the measure by which one determines and judges one’s actions), regarding oneself as the primary beneficiary of one’s actions. Self-interest means that one’s actions are geared towards the furtherance of one’s own life.

Self-interest indicates the end of one’s actions (the self); rational indicates the means of obtaining that end (reason).

In regards to one’s relationship with others, rational self-interest does not mean sacrificing oneself for others (what philosopher Auguste Comte coined as altruism or “otherism”) or sacrificing others for oneself (what is smeared as “selfishness”). Instead, rational self-interest means having a benevolent view of existence, seeing other individuals as traders with a shared harmony of interests, exchanging value for value — in the material (wealth and pleasure), intellectual (knowledge and discussion), and spiritual (love and friendship) realms.

Capitalism is the social system based on individualism that regards the individual as a sovereign, independent being. Individualism does not mean living a “rugged life” on a desert island or as a “lone wolf” in the wilderness, but like its antithesis, collectivism, specifies the nature of the relationship of the individual to the rest of society.

Where collectivism holds that the life of the individual is only justified in service to the group; individualism regards the individual not as a slave, but as a sovereign being that owns their own life. (Observe the powerful influence of ethics on politics: altruism, the ethics that upholds self-sacrifice as a noble ideal, leads to collectivism, the politics of sacrificing the individual to the group; rational egoism leads to individualism.)

Capitalism is the ideal social system as it leaves the individual free to be moral — free to act rationally in the pursuit of happiness — so long as one respects the equal right of others to do the same.

The principle that makes this possible is the concept of individual rights, which philosopher Ayn Rand identified as the bridge between individual morality and social politics.