Must-Read: I sometimes wonder: would Matthew Yglesias be a better economist and moral philosopher now if he had been an Economics rather than a Philosophy major at Harvard College? If the answer is--as I think it is--"no", then some people have a lot of 'splainin to do...
Thoughtful opponents of the welfare state have generally avoided making the argument that capitalism is good because it promotes human well-being...:
...Since capitalism does promote human well-being, 'capitalism promotes human well-being' sounds like a good argument in its favor. But it turns out that capitalism plus a large welfare state promotes human well-being even more. So you either need to embrace the welfare state (the correct answer) or come up with another justification of capitalism. One that frequently arises is what Greg Mankiw has referred to as the 'just deserts' perspective in which 'people should receive compensation congruent with their contributions' and we should aim for a society in which public policy ought to ensure that 'every individual would earn the value of his or her own marginal product.' So if... you are blind and... [thus find] hard for you to earn a living in an unregulated market that's too bad for you... your ability to contribute... is limited... [so] it is morally appropriate that your living standards be limited as well.... If... genetics and childhood living conditions have left you with an IQ... 2 standard deviations below average... you deserve to have a much lower standard of living than [if] society... were willing to do... redistribution.
Mankiw's moralized capitalism seems bone-chilling to me, but I don't really think I can prove him wrong.... Mankiwism isn't a Christian worldview. Jesus didn't preach 'blessed are those with high marginal products, for they shall inherit incomes proportionate to their contributions.' The practical benefits of capitalism are something that maybe a Christian should care about, but the practical benefits of capitalism-plus-welfare-state are bigger. To justify the tax-cutter policy agenda, you need some thicker ethical theory, and it ends up being a distinctly non-Christian one.