Posts Tagged ‘morality’


Special mention

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Yesterday in our class on A Tale of Two Depressions, we discussed Robert McElvaine’s notion of “moral economy” (which he introduces in chapter 9 of his book, The Great Depression: America, 1929-1941). The idea is that, during the first Great Depression, Americans were engaged in an intense debate between different moral economies (which McElvaine characterizes as the difference between the “cooperative individualism” of workers and the “acquisitive individualism” of businesspeople).

As I explained to students, all economic theories—for example, neoclassical, Keynesian, and Marxian theories—represent moral economies. And they arrive at very different conclusions concerning the justice or fairness of capitalism. Thus, for example, neoclassical economists argue that everyone gets what they deserve and, through the workings of the invisible hand, the result will be full employment. In contrast, Keynesian economics is based on the proposition that, while everyone may get what they deserve (with the possible exception of coupon-clippers), it’s quite possible that will result in less-then-full-employment equilibrium, which then requires the visible hand of government intervention. Marxian economists propose a third possibility: even if everyone gets what they deserve in markets, in production things are different (because of exploitation)—and the consequence, whether there’s an invisible or visible hand, is inequality and instability. In other words, the three economic theories represent radically different moral economies.

One student then invoked the idea of moral economy and blamed greed for causing the current crisis. I responded by making the distinction between individual greed and economic institutions, which like the different notions of fairness among economic theories leads to quite different solutions: throw the greedy bankers in jail (which of course we haven’t done) or change the economic institutions (which we haven’t done either).

Chris Dillow makes a similar distinction between “greedy bankers” and “overly powerful bankers.” His view is that “the habit of over-emphasizing individuals’ traits and under-emphasizing situational forces” leads us to “to moralize inequality; the rich are rich because they are greedy whilst the poor are poor because they are lazy.”

What this effaces is the fact that inequalities in capitalism are instead the result of inequalities of power – a power which rests in part upon ideology. Moralizing inequality tends to blind us to this fact. It creates the illusion that capitalism would be acceptable if only those at the top were better people, when in fact the faults in capitalism are structural and not due to the flaws of passing individuals.

That’s pretty much the same distinction I was trying to make, although I still want to characterize the two explanations as different moral economies: one is a moral economy of flawed individuals, while the other is a moral economy of flawed institutions.*


*Although I’m willing to admit I’m sympathetic to Dillow’s view for another reason: because he invokes my favorite football club and blames Crystal Palace fans (who greeted Wayne Rooney with chants of “you fat greedy bastard”) for committing the error of “blaming Rooney’s salary upon his personal character rather than upon his situation.”



Amia Srinivasan sets her critical sights on the free-market liberalism of Robert Nozick but, in the end, she undermines both forms of market moralism—of both Nozick and John Rawls.

Perhaps her most telling insight is how narrow the terms of the mainstream debate actually are:

Rawls and Nozick represent the two poles of mainstream Western political discourse: welfare liberalism and laissez-faire liberalism, respectively. (It’s hardly a wide ideological spectrum, but that’s the mainstream for you.)

Snrinivasan’s questions to those who follow a Nozickian version of market liberalism are indeed quite useful. But, lest Rawlsians think they can rest content with current arrangements that represent departures from Nozick’s preferred approach, she makes a series of observations on the actual injustices occasioned by market moralism in the United States:

People might be legally prohibited from selling their organs, but that doesn’t remedy the desperate circumstances that might compel them to do so. The law does not stop people from falling into poverty traps of borrowing and debt, from being exploited by debt settlement companies promising to help them escape those traps, or losing their homes after buying mortgages they can’t afford to pay back. And there is certainly no prohibition against the mind-numbing and often humiliating menial work that poor people do in exchange for paltry wages from hugely rich companies. A swiftly eroding welfare state might offer the thinnest of safety nets to those who fall on hard times, but it does nothing to address the lack of social mobility caused by the dramatic rise in inequality. And while it might be thought poor form to walk by a drowning man, letting children go hungry is considered not only permissible, but as Senator Sessions said, “a moral issue.” These facts might be not quite as ethically outraging as walking past a drowning man, but they, too, grate against our commonsense notions of fairness.

The fact is, neither version of market moralism effectively captures the injustice of current economic arrangements. What we need to do is leave the sphere of markets—which, as that cigar-smoking critic of political economy wrote almost a century and a half ago, represents the very Eden of the innate rights of human beings, where freedom, equality, property, and Bentham rule—and begin to think about the fundamental unfairness of an economy where employers have the right to appropriate the surplus labor of their workers.

Once we do so, we can’t but agree with Snrinivasan about how narrow the mainstream ideological spectrum actually is.


Readers will remember (or at least have heard about) Home Alone, the 1990 film in which Kevin McCallister, an eight-year-old boy played by Macaulay Culkin, is left behind when his family flies to Paris for their Christmas vacation.

Well, it seems a similar fate has befallen Paul Krugman, who by his own admission won’t follow Joseph Stiglitz and couldn’t-be-more-centrist-a-Democrat Barack Obama. Obama, in his Knox College address concerning economic issues, followed Stiglitz in focusing on inequality both as a cause and a consequence of the current economic crises.

Krugman however argues, as he has all along, that inequality is a moral not an economic issue.

What this means is that even other mainstream economists and centrist politicians, in placing inequality at the center of our current economic story, may now be leaving Krugman behind.

Market morality

Posted: 26 November 2012 in Uncategorized
Tags: , , , , , ,

Both Michael Sandel and Deirdre McCloskey treat market morality as a very trivial thing, and easily understood.

For Sandel, market morality is based on the idea that “some of the good things in life are degraded if turned into commodities.” Therefore, “the market” should  be circumscribed and delimited according to community norms and values. McCloskey’s view, per contra, is that “the market” is responsible for tremendous economic growth, and especially for the decline in world poverty. Her version of market morality is to encourage the flourishing of markets, anywhere and everywhere.

The problem is, both market moralists—Sandel and McCloskey—treat markets in an abstract fashion, as “the market.” Neither wants to discuss different kinds of markets: slave markets, capitalist markets, communist markets, and so on. And therefore neither wants to recognize the fact that the different consequences of markets depend, at least in part, on how market commodities are produced.

Once we move beyond the idea of the abstract market—and thus the idea that market morality is a very trivial thing, and easily understood—we can begin to talk about the conditions and consequences of capitalist commodity production. The Sandels of the world would then have to confront the moral consequences of a large part of humanity being forced to have the freedom to sell their ability to work to the tiny minority who appropriate the surplus they produce. And the McCloskeys of the world would have to move beyond their moral defense of the origins of bourgeois virtues to consider the contemporary implications of the buying and selling of “fictitious commodities” such as labor, land, and money.

McCloskey is correct in chiding Sandel for wanting to undo the fundamental “‘unfairness’ of charging for Shakespeare tickets in Central Park.” There certainly is something more important at stake. But McCloskey, for her part, fails to recognize the continued existence of poverty in the midst of plenty—or the fact that those on top, in the name of bourgeois virtue, brought the world economy to the brink of disaster and continue to impose the costs of capitalist recovery on the rest of the population.

No, in contrast to the views of both Sandel and McCloskey, market morality is not a trivial thing, easily understood. To quote that nineteenth-century Moor, “Its analysis shows that it is, in reality, a very queer thing, abounding in metaphysical subtleties and theological niceties.”


The manners and morals of the plutocracy are once again provoking negative reactions within the United States and around the world.

Back in 1977, in the midst of an earlier economic crisis, John Kenneth Galbraith examined the claims of and on behalf of the super-rich during the age of “high capitalism.”

Chrystia Freeland [ht: sm] is doing something similar today—studying contemporary plutocrats and how they justify their exalted status.

Those at the very top, Freeland says, have told her that American workers are the most overpaid in the world, and that they need to be more productive if they want to have better lives.

“It is a sense of, you know, ‘I deserve this,’ ” she says. “I do think that there is both a very powerful sense of entitlement and a kind of bubble of wealth which makes it hard for the people at the very top to understand the travails of the middle class.”

One standout moment Freeland recalls is a conversation with a billionaire who spoke with great sympathy about some friends who’d come to him for investment advice. “And he said to me, ‘You know what? They only had $10 million saved. How are they going to live on that?’ I kid you not, he was really worried about them.” . . .

So how are the super-rich that Freeland interviewed different from the super-rich of the past — say, 1955? Well, there are many more of them, and they’re a lot richer than they used to be.

“One of the things which is really astonishing is how much bigger the gap is than it was before,” she says. “In the 1950s, America was relatively egalitarian, much more so than compared to now.” CEOs earn exponentially more now, compared with their workers, than they did 60 years ago.

“The other difference is that now the super-rich are global. And that’s not sort of a cultural choice of theirs, that is something which is imposed on them by the nature of the world economy,” says Freeland. “Increasingly, I think you are actually seeing what, ironically, was the dream of Marxists, right? You are seeing the emergence of an international class.”

While Marx almost certainly wasn’t dreaming of global billionaires, Freeland says he might have recognized what’s going on right now. “This notion that borders wouldn’t matter, that we would have commonality of interests around the world. Well, guess who got there first? The plutocrats.”

Thomas Locher, “The Mystical Character of Commodities
Does Not Originate, Therefore, in Their Use Value” (2007)

Right now, morality seems to be calling into question faith in free markets.

There is, of course, the new book by “rock star professor” Michael Sandel, whose views I have engaged here.

Putting a price on a flat-screen TV or a toaster is, he says, quite sensible. “But how to value pregnancy, procreation, our bodies, human dignity, the value and meaning of teaching and learning – we do need to reason about the value of goods. The markets give us no framework for having that conversation. And we’re tempted to avoid that conversation, because we know we will disagree about how to value bodies, or pregnancy, or sex, or education, or military service; we know we will disagree. So letting markets decide seems to be a non-judgmental, neutral way. And that’s the deepest part of the allure; that it seems to provide a value-neutral, non-judgmental way of determining the value of all goods. But the folly of that promise is – though it may be true enough for toasters and flat-screen televisions – it’s not true for kidneys.”

And then there’s the recent survey by the Public Religion Research Institute (whose web site is not working right now), cited by Thomas Edsall [ht: bn], on whether or not capitalism is compatible with Christian values.

As it turns out, the answer depends on the partisan political identities of the respondents.

By two to one, 53-26, Democrats believe that capitalism and Christianity are not compatible. Republicans, in contrast, believe there is no conflict, by a 46-37 margin. Tea Party supporters are even more adamant, believing that capitalism and Christian values are compatible by a 56-35 margin.

The general public, by a 44 to 36 margin, believes capitalism is not compatible with Christian values.

There are positive signs, then—from the worldwide interest in Sandel’s book and a survey of the U.S. population—that moral and religious discourse represents a challenge to free-market capitalism.

The only caution I’d add is that it may be a mistake to set up a simple opposition between moral values and markets, as if a return to values and morality represented a way out of the current crises. We need to recognize that the faith in free markets leading up to the financial crisis of 2007-08, like the call for austerity today, was itself a discourse dripping with moral values.

An alternative might be to declare the long dark night of values and morality finally over and move instead to a materialist critique of political economy—in order to uncover the secret of the mystical character of commodities.