Tim Montgomerie says:

Liberal capitalism requires social conservatism. It needs the virtue-generating institutions or there'll be no thrift, no duty, no honesty, no Protestant work ethic.

I half agree. I agree that, in order to work well, a market economy does need particular personal virtues, for example, it needs:

- a strong work ethic, so that labour supply will be high. One reason why early factories employed children was that adults did not have the habit of working long hours.

- temperance, so we save and accumulate capital; one cause of the crisis is that we offshored this one.

- trust, so that the invisible handshake (pdf) can be used to solve market for lemons-type problems.

- lawfulness, so businesses can invest in the confidence their profits won't be stolen. It's the lack of this that helps explain why poor areas stay poor.

Where I have my doubts is whether socially conservative policies really do generate virtues. For example:

- Can the state really legislate morality? It's not obvious that laws against drug use have succeeded in promoting the virtue of abstemiousness.

- Should the state really promote 'strong families'? Single parenthood - as distinct from poverty - is not a cause of crime or low employability. Given this, tax breaks to 'promote marriage' would be more a deadweight handout to one's favourite people, rather than a means of solving social problems. There's nothing virtuous about this.

- Could it be that building virtues requires anti-conservative policies? Eric Uslaner (this pdf and this one) has shown that inequality breeds distrust. It also possible that it encourages thriftlessness as the poor borrow to keep up with the spending of the rich. If this is the case, then virtues might be promoted not by conservative policies but by egalitarian ones.

My point here is simple. Even if we accept - as we should - that a free market economy requires certain virtues to work well, it does not follow that those virtues are best promoted by conservative policies.