The Moral Foundation of Economic Behavior
David C. Rose
Language: English
Pages: 288
ISBN: 0199360596
Format: PDF / Kindle (mobi) / ePub
This book explains why moral beliefs can and likely do play an important role in the development and operation of market economies. It provides new arguments for why it is important that people genuinely trust others-even those whom they know don't particularly care about them-because in key circumstances institutions are incapable of combating opportunism. It then identifies specific characteristics that moral beliefs must have for the people who possess them to be regarded as trustworthy. When such moral beliefs are held with sufficient conviction by a sufficiently high proportion of the population, a high trust society emerges that supports maximum cooperation and creativity while permitting honest competition at the same time. Such moral beliefs are not tied to any particular religion and have nothing to do with moral earnestness or the set of moral values-what matters is how they affect the way people think about morality. Such moral beliefs are based on abstract ideas that must be learned so they are matters of culture, not genes, and are therefore able to explain differences in economic performance across societies.
The Return of Depression Economics and the Crisis of 2008
Markets for Managers: A Managerial Economics Primer
needs, and feelings, and were therefore able to more efficiently assign tasks, divide resources, and provide help when needed. The resulting increase in efficiency led to higher group payoffs. This led to more successful reproduction for members of the group relative to members of other groups. With respect to direct group-on-group competition, it also led to the domination, conquering, and destruction of groups less able to empathize and therefore efficiently allocate resources. Finally, the capacity
such actions in the first place, because not undertaking positive moral actions is simply not wrong. This first appears to suggest that people will have no basis for undertaking positive moral actions, or that a society comprised of such individuals will lack all benevolence. This is incorrect. Perfect lexical primacy is simply the belief that benevolence is never an obligation or duty. As such, there is no reason to feel guilty for failing to take a positive moral action. Just as de jure lexical
a matter of duty, so B possesses an ethic of duty-based moral advocacy with respect to positive moral actions (y1, y2, . . . , ym) in addition to possessing an ethic of duty-based moral restraint with respect to negative moral actions (x1, x2, . . . , xn). Now suppose that in a particular circumstance B must do y1, but y1 can only be accomplished in that circumstance by doing x1 as a means to that end. In this case, B’s moral duty to do y1 implies that B must do x1. But if B possesses duty-based
be limited to small groups. Such a society will be less able to support positive moral actions because it will be significantly poorer than a society that abides by the moral foundation. 142 The Moral Foundation of Economic Behavior One might ask how the matrix above adds anything beyond making the obedience of moral prohibitions lexically primacy to the obedience of moral exhortations. Recall that lexical primacy of the obedience of moral prohibitions over the obedience of moral exhortations
argument. My claim is simply that an ethic of duty-based moral restraint is a necessary condition for most fully supporting the development and operation of a market economy, and thereby maximizing general prosperity. Duty is simply a word that captures the thought of attaching sufficiently strong feelings of guilt to actions, and not just their consequences. In the moral foundation, duty is not a matter of “the good” but is instead a matter of “what works best.” Duty matters because it leads to a