By Yuval Levin

e are again in a season of suspicion about business in America. After a summer of corporate scandals and falling stock prices, the morality of markets is in question and the notion that capitalism is corrupt by its nature is once more in the air.

At just the right moment, Edward Younkins has offered a full-throated defense of the capitalist worldview, which ably refutes some critiques but at the same time also confirms (by embodying) others. Younkins is well suited to the task. A professor of accounting and a card-carrying libertarian, he stands for the capitalist view. And he proves to be no simpleminded market worshipper.

Capitalism and Commerce, Younkins's new book, is a moral argument for capitalism. In a series of short, crisp chapters, it lays out the classical case for natural rights, negative freedoms, free markets, and a narrowly limited government. These elements of the capitalist system, he contends, are good not only for the wallet, but also for the soul. Capitalism, he writes, not only generates enormous wealth but also creates an environment in which morality and virtue can flourish.

The morality that Younkins sees flourishing is an ethic of individual responsibility and accountable free choices. Markets reward the prudent virtues, and wealth affords us leisure, which allows us to get beyond the base necessities and think of higher things. Younkins makes a strong case for free markets and free trade, for the corporation, and even for business as a noble calling.

And yet, his book also highlights a key weakness of the libertarian position. Younkins argues well that unencumbered capitalism can create an environment in which morality and virtue can flourish, but he leaves open the question of just what will actually make them flourish. After all, as he acknowledges, immorality and vice can also flourish in the same environment. Younkins defends an unknown ideal: the businessman who turns down government subsidies on principle, or the corporate board that sees the defense of natural rights as its highest purpose. He does not explain just how the market will create such people.

The answer is that the market alone will not create them. Illiberal economic systems are indeed great barriers to decent moral living. But free markets alone are not the source of virtue. They must be accompanied by a larger culture that encourages morality and virtue to flourish. And occasionally there are ways in which totally unfettered capitalism can impair such a culture, and therefore in which capitalism should be gently fettered in the service of a higher end. Libertarians often fail to see this point because their notion of culture and community is informed by a radical individualism that has real trouble dealing with the necessarily common task of educating citizens.

The three great advocates of a free economy at the birth of the capitalist idea ' Adam Smith, Edmund Burke and Alexander Hamilton ' did not imagine that the market would produce its own morality. On the contrary, they saw it as arising out of a certain moral view of the world (as Younkins does), and answering to the norms of a political community ruling itself through free institutions.

They were informed, above all, by an insight that seems too often lacking in contemporary libertarian circles: an overriding skepticism about the capacities of human beings to perfect themselves and their world. Capitalism as originally understood is truly the least worst form of an economy, and not the road to some utopia. It is this darker and more grave sense of the world, this fundamental conservatism, that separates the classical liberals from the keen post-modern futurists among the friends of capitalism.

And it is just that guarded view that can lead us to the right conclusions about the corporate misbehavior uncovered in the past few months. The constant rediscovery that, yes, there is corruption in the market should not lead us to abandon markets but to remember that human nature is susceptible to corruption, and is in constant need of correction by rules and institutions that recognize its weaknesses. The free market is one such institution, though it is not the only one.

Because his case is founded first in natural law, Younkins is fundamentally a classical liberal. His book is at times a bit too strident in its declarations, and it now and then assigns to the American Founders the views of the editorial board of Reason magazine, but it puts forward a serious and on the whole convincing moral argument.

Edward Younkins has made a real contribution to our understanding of the moral underpinnings of the economic system that accompanies our way of life. And he has done so just when we needed it most.

' Yuval Levin, a member of the staff of the President's Council on Bioethics, is the author of Tyranny of Reason: The Origins and Consequences of the Social Scientific Outlook.