Does the free market corrode moral character? No! And, well, yes.

Our forebears believed that a commercial society would instruct all its members in hard work, regularity, and innovation. It would also teach Americans to be bold in adventure (like the New England sea captains), modest in their expectations of gain, and thrifty in their repeated reinvestment of gains for the sake of future compounding. These activities would be an alternative to the conspicuous consumption of the old landed aristocracy. A commercial society encouraged an honest, responsible, self-denying, and future-oriented citizenry. Such a citizenry is especially needed to make free republics law-abiding and prosperous.

Because the roots of commercial society–habits of innovation and invention, the blessedness of hard work, a focus on the future–spring from imperatives in the Jewish and Christian religions, it was not too long a stretch for America’s founders to recognize the crucial role of religion and morality in curbing commercial instincts, keeping them within bounds and steering them from self-destruction. “There are many things that the law does not prevent citizens from doing that the religion of Americans prevents them from doing,” Tocqueville noted approvingly.

On the other hand, the successes of a commercial republic also produce, over time, various enervating influences that corrode the moral strength of societies. Younger generations take for granted the prosperity won by the sacrifices of their forebears. Some want escape from the disciplines of a commercial republic, and some have contempt for the restrained manners and mores of their ancestors. Generations inured to hard work and self-discipline can give way to new generations that hear other music blowing in the wind and long for rebellion, preferring to luxuriate in idleness rather than to engage in menial work. A generation committed to saving for tomorrow is replaced by a generation heedlessly living just for today.

In such ways, the very successes of a commercial republic tend to undermine the moral stamina of the young. The sociologist Daniel Bell dubbed these cyclical turnings of the wheel “the cultural contradictions of capitalism.” In other words: strong morals in, but over time, loose morals out.

We can see all around us the opportunity for accelerating moral decadence. But such moral decadence is only a possible outcome, not a necessary one. Well warned against it, we can make special efforts to overcome its attractions. In this way, the greatest task of a commercial society becomes moral and cultural deepening, a return to spiritual roots, what our forebears called a “Great Awakening.”

By the reckoning of the Nobel Prize-winning economist Robert Fogel, the United States is now in the slow upsurge of a Fourth Great Awakening. It is characterized by a return to basics, an emphasis on family, and an invitation to the young to develop the self-nourishing habits of will and mind that are the best guarantors of strong character. Such young people are the best hope of the future vitality of our republican liberties and commercial creativity. (Excerpted from the American Enterprise Institute, October 1, 2008.)