One of the ideas that has bugged me over the years is the claim that capitalism is soulless. In a literal sense, of course, it has to be soulless because it’s a system, not a person. But the term is used so often that it’s important to examine the claim more closely. Don Boudreaux does so admirably in his article  “Capitalism Is Impersonal, Not Soulless,” AIER, January 4, 2024.

I’ll quote a few excellent passages and then go on to say that this is a rare example where I think Don understates his case. And it relates to the picture above. But I’m getting ahead of myself.

Don writes:

Read narrowly, this assertion [that capitalism is soulless] is empty of useful meaning. Capitalism isn’t a sentient creature; it has neither consciousness nor a conscience. Capitalism is the name we give to a particular manner of human interactions. It therefore is no more useful to observe that “capitalism is soulless” than it is to observe that “automobile traffic is soulless.”

But the ‘soullessness’ of capitalism is claimed so very frequently, and by people of all ideological stripes, that this claim obviously conveys some substantive meaning to those who encounter it.

What might that meaning be? I think I know. The claim that capitalism is soulless reflects a confusion of “impersonal” with “soulless.” Capitalism does indeed feature myriad impersonal exchanges, but this reality doesn’t mean that capitalism is soulless.


Motivated, in fact, not by love but by self-interest – and guided not by personal knowledge, but by impersonal market signals – capitalist markets are indeed impersonal. And I grant that they seem cold and soulless when compared to the face-to-face connections that we have with loved ones, neighbors, and mom’n’pop merchants in small towns. But surely when compared to the deadly poverty that we’d experience if we had economic connections only with people we know by face and name, capitalist markets ought to be applauded for their humanity. To describe as “soulless” a system that encourages and enables countless strangers to peacefully and productively cooperate for each other’s benefit surely conveys a wholly false impression.

It’s in the second sentence of the above paragraph that I think Don understates. Not terribly, but somewhat.

To make the point, I’ll tell a true story. My wife and I are cat lovers. At any given time, we have 3 cats. When one dies, we get another, typically with only a 1-week to 3-month lag. It occurred to us over a decade ago that we value our cats so much that we should get good insurance for their vet bills. So we did. We learned the hard way that you can blow through the upper limits of coverage pretty quickly. So we looked around and found a company named Trupanion. We have insured with them for about the last 6 or 7 years. Trupanion has been as excellent as we had hoped.

Sounds impersonal so far, right?

But then, a couple of years ago, one of our favorite cats ever, Kipper, a gentle thing who was so loving to his “siblings,” got very sick and it was clear that we needed to let him go. Of course, our vet went online to get the last procedures paid for.

A couple of weeks later, a package arrived in the mail from Trupanion. It was a framed picture of our wonderful cat Kipper. This is not something we had contracted for. Of course, you can remind me, although you don’t need to, that there’s no such thing as a free Kipper picture. Implicitly, we did pay for it in our premium. But, as I mentioned, that was not part of the contract. So we thought we were getting good value from the company even without that picture. The picture was pure sentimental consumer surplus. And a stranger at Trupanion had enough “soul” to do that.


I got this story totally wrong, as my wife explained when she saw this post this morning. It wasn’t Trupanion; it was a company named Smalls that sells human-grade food for cats. We had been trying various foods to get Kipper to eat. The vet suggested human-grade food. So my wife ordered some from Smalls. By the time it arrived, Kipper had died. So my wife contacted them to say that he had died and she wouldn’t be ordering more. They were very nice and sympathetic and asked her if she had a photo of Kipper. My wife sent two. A couple of weeks later, a framed picture arrived (the one above) from a picture-framing company.