Moderating the Dark Side of Emotional Morality with the Bright Side of Market Morality
Lee, Dwight R., Independent Review
Making a convincing moral case for markets is difficult. The approach most often taken is to point to the desirable outcomes motivated by markets, many of which can be described as moral. Markets are unequaled in reducing poverty, improving environmental quality, decreasing discrimination, and providing opportunities for social and economic advance based on freedom and responsibility. These and other desirable market outcomes result from a spontaneous process of widespread social cooperation that few understand. Thus, the benefits that markets generate are easily taken for granted, with little appreciation being shown for the markets' role in providing them. Even when market outcomes are appreciated, they are morally tainted in the minds of many because they are seen to result from motives that are morally dubious, if not outright immoral.
Stereotypical market behavior fails to satisfy the conditions that people associate emotionally with morality. One can make the case that given the right institutional arrangements, the pursuit of self-interest is a virtue on instrumental grounds, but few will be convinced. People do not evaluate morality entirely or even primarily in terms of outcomes, but in terms of the motives and means by which outcomes are generated. The motive of self-interest and the means of impersonal exchanges rank high on very few people's scale of morality. As Joseph Schumpeter pointed out, "The stock exchange is a poor substitute for the Holy Grail" ( 1950, 137).
Yet there is a strong moral case for markets based on their ability not simply to produce wealth, but also to improve the emotional morality that is critical to harmony in small groups and adds meaning to our personal relationships. My argument is not simply that the wealth created by markets makes personal relationships more meaningful, although this benefit is an important one. I also argue that what is universally seen as morality and as the source of enormous human happiness also has a dark side that has caused enormous grief throughout human history. The morality of concern and caring for those with whom we identify as members of our community can also trigger hostility and hatred toward those who belong to other communities. The human decency based on our propensity to exhibit compassion and love and a willingness to sacrifice for some is coupled with an equally human tendency to inflict pain and suffering on others. What goes almost completely unrecognized, even by those most vocal in their desire to reduce human brutality, is that the morality of markets serves to moderate hostility between diverse groups by harmonizing conflicting objectives through positive-sum exchange. Markets make the instinctive morality we all embrace emotionally more moral than it would be otherwise.
Consider first the type of behavior that is emotionally recognized as moral and that is clearly appropriate for personal and direct interactions in small groups. I refer to this behavior as satisfying the conditions of magnanimous morality.
Magnanimous morality can be described as helping others in ways that satisfy three requirements: the help is provided (1) intentionally, (2) sacrificially, and (3) directly to identifiable individuals or groups.1 Helping others, no matter how great the help, is not considered moral if the help is provided unintentionally. For example, no moral credit would be given to someone for preventing a suicide bomber from carrying out his deadly mission merely by having a car accident with him. Also, providing help to someone for personal profit does not warrant moral credit. Pharmaceutical companies extend the lives and reduce the pain and suffering of millions, but because they do so with the intention of gaining profit, their actions are not considered worthy of moral praise. Finally, directly helping identifiable people or members of particular groups has more moral appeal than providing benefits indirectly to unknown beneficiaries. …