Virtues as Social Capital

This chapter explores the nature of those virtues that are the most important for supporting economic activity. Virtues are considered as forms of human capital to the extent they are instrumental to improving an individual’s personal quality of life. Virtues are divided into three categories: prudential, positive, and negative. The negative virtues are shown to be especially important for sustaining high-trust societies and, as such, are also properly viewed as social capital. The negative virtues are shown to also constitute public goods and, as such, are prone to inadequate investment. In addition to deepening our understanding of the role that virtues in general play in the development and operation of free-market economies, this exercise helps explain why most societies are not flourishing free-market societies. This exercise also calls into question conventional approaches to moral education, which do not stress the negative virtues.