For a long time I've been nagged by a sense of inconsistency in my beliefs. I am as absolute a defender of free-market capitalism as you will find, under the assumption that people can generally be trusted to sensibly pursue their own interests. At the same time, I believe that morality can only be assured through a system of law, and that leaving morality to the individual is a recipe for disaster.
When thinking about the distinction between them, the best I could come up with is that individual freedom seems to work better in economics than in morality. That answer is unsatisfying, since it says nothing about why this should be so. Yesterday, I finally put my finger on what I think the essential difference is.
In economics, you can keep score. In morality, you can't.
In economics, your success or failure can be clearly quantified at any time, by counting up your assets. By watching your score, you have immediate feedback on whether the choices you make are beneficial. With that information, each individual can analyze his options and decide which are best, at least when taken generally over the whole system.
But in morality, the very standards you use to measure yourself are based on a moral decision. There is no single standard. What I would consider a debauched disintegration of society, others might call the free expression of individual potentialities or other such nonsense. We cannt agree on how to score ourselves, and therefore groups of people cannot effectively regulate their own behavior without the intervention of an outside standard. People cannot be trusted to do the right thing, because they cannot agree on what the right thing is.
Libertarianism, when applied to morality, leads to anarchy.