It’s not at all surprising that the problem of morality is taking center stage. Not at this moment, when in the midst of the Second Great Depression tens of millions of Americans are suffering from unemployment, poverty, and food insecurity. Nor in general, since neither capitalism nor economics can exist without some kind of moral discourse.
Let me explain. Capitalism could not have come into being nor been reproduced over time without a complex set of ideas and beliefs that it is a just economic and social order—that, in one sense or another, people get what they deserve under capitalism. The same is true of economics: there is no theory of economic value, on the Right or the Left, without a judgment concerning the morality of the outcomes of the production and distribution of capitalist values—and, thus, some utopian configuration of the economy, either within or beyond capitalism.
In my view, that applies to the views of Paul Krugman (e.g., here and here) as anyone else involved in the ongoing discussion of the morality of capitalist markets. Krugman, like all mainstream economists, may attempt to deny it— holding to some notion of a fact-value, positive-normative distinction—but his arguments—in favor of equal opportunity and welfare-state capitalism—are, at least in part, moral arguments. They are arguments about just deserts.
Marx, too, started from the just deserts moral argument. Why? Not because he had a lot of sympathy for moral reasoning but because his critique of political economy started where others left off. If “they”—capitalists and political economists of his day—sought to make the case that capitalism was just, then that’s where he’d begin. In fact, his theory of value was premised (in the initial stages, in volume 1 of Capital) on the assumption that capitalist commodity exchanges were equivalent exchanges. He thus gave those who celebrated capitalism their strongest case. (Later, in volume 3, he would show that equivalent exchange under capitalism was impossible.) Then, he showed that, under the conditions of equivalent exchange (where all commodities, including labor power, exchange at their values), a surplus-value would arise. He succeeded in demonstrating that capitalist exploitation violated bourgeois morality.
In the end, that’s what Krugman and the other participants in the liberal-conservative debate about just deserts choose to ignore: that both regulated markets and free markets are compatible with the fundamental injustice of capitalist exploitation.