Markets and Morals

A recent paper on the economics of new media flags an interesting moral assumption inbuilt in most market based relations. It has echoes of Michael Sandel's recent arguments on the moral limits of markets.

At a superficial level, it is apparent that people act differently, and are expected to act differently, in the context of relationships mediated by money than in other contexts. Behaviour that would be regarded favourably in a non-monetary context is regarded as foolish or even reprehensible in a monetary context. One of the most important general differences relates to rationality and calculated reciprocity. In a non-market context, careful calculation of costs and benefits and an insistence on exact reciprocity is generally deprecated. By contrast, in market contexts, the first rule is never to give more than you get. Why is it more important to observe this rule in market contexts? One reason is that markets create opportunities for systematic arbitrage that do not apply in other contexts. In an environment where trust is taken for granted, a trader who consistently gives slightly short weight can amass substantial profits. If trading partners assume honourable behaviour, none will suffer enough to notice. This is much more difficult to do in ordinary social contexts. Similar points can be made about other motives. There are a whole range of sales tricks designed to exploit altruism, friendship, desire for self-expression and so on. Hence, to prosper in a market context, it is necessary to adopt a view that “business is business,” and to (consciously or otherwise) adopt a role as a participant in the market economy that is quite distinct from what might be conceived as one's “real self.”

The last sentence is particularly important because it does remind us that though  market based transactions are predicated on "freedom" and can even be argued to maximise greater material welfare, the market is not always morally neutral and usually accentuate the worst rather than the best in people. Christians reflections on the role of market in society therefore must be much broader than what we tend to hear from the American religious right. Equally important is that it must take on board new reflections from the secular philosopher Michael Sandel who cogently argues in his recent book that the relentless march of prices in our lives has led to erosion of social assets / goods that money simply can't buy. The result is that as a society, we are all becoming poorer for it.