Paul J. Zak, ed.: Moral Markets: The Critical Role of Values in the Economy.

Bishop, John Douglas

Paul J. Zak, ed.

Moral Markets: The Critical Role of Values in the Economy.

Princeton, NJ: Princeton University Press 2008.

Pp. 386.

US$65.00 (cloth ISBN-13: 978-0-691-13522-9); US$26.95 (paper ISBN-13: 978-0-691-13523-6).

The point of this book is to replace the common view that free markets are a non-moral realm in which all participants pursue their self-interest without regard to their moral obligations to others or to the common good. The volume's contributors argue that moral rules and an instinctive regard for the interests of other people are fundamental to free markets and that markets cannot function without morals.

The common view of the free market is that it is a self-regulating mechanism in which every individual pursues only her own self-interest, and from which, as though by an invisible hand, emerge enhancements to the common good. The central assumption is that people act within markets like homo economicus, a being who rationally pursues the maximization of his own utility, has a well formed consistent utility curve not influenced by other people, and is never altruistic except when altruism pays dividends. Since free markets promote the common good, homo economicus need never sacrifice his interests from moral motives. Sometimes part of the common view is the idea that homo economicus is the natural result of evolution, since self-interestedness is the result of the evolutionary survival of the fittest.

The contributors to this book reject the common view from many perspectives, both theoretical and empirical. The attack comes from many disciplines, including economics, where institutional theory, behavioral economics, game theory, and macro-economics have shown that (a) people do not behave like homo economicus, (b) altruism and costly rule following is common, (c) the invisible hand does not work well in real markets, (d) free markets (even if self-regulating in some sense) are not self-generating or self-restraining, and (e) the best outcome is often the result of co-operation and co-ordination, not free market competition. Our economy is full of prisoners' dilemmas. Psychologists have contributed empirical data that make nonsense of homo economicus's obsession with self-interest; people, they have shown, are mostly trusting and trustworthy, honest, and deeply concerned about others, plus we have an instinctive sense of fairness. Biologists have pointed out that our closest evolutionary relatives (other primates) share some of our altruism and sense of fairness, and that such attributes are not only a possible outcome of evolution, but are a probable outcome in many social species. Anthropologists have tried to trace the cultural evolution of free markets, and have shown that trust and trustworthiness necessarily accompanies such evolution. Sociologists have collected further evidence on the role of trust in economic exchanges. Philosophers have pitched in with theoretical constructions and arguments, and they have claimed that philosophy has known all this for centuries.

This book is a snapshot of current developments in all these fields, and most of the contributors are leading scholars well able to give an overview of what their discipline has to say relevant to markets. The result of bringing these views into one book is a new paradigm of morals and free markets. Key elements of this new view are that markets require morality to function; that most human beings are naturally moral even at the expense of their self-interest; that moral instincts are buried deep in human emotions and that morality derives from 'sensations' not 'reason'; that this natural morality of fairness and co-operation is the result of evolutionary forces; that there are many common moral instincts that exist across most human cultures; and that free markets have culturally evolved in ways consistent with natural human morality. None of these views are original to this book, but it is nice to have such excellent accounts of them brought together: the result is like a picture emerging as a jigsaw puzzle is completed.

For philosophers, the picture painted in this book is of great interest, but the book raises several more specific issues of philosophical purport. First, bringing these contributors together made them realize that key words had radically different meanings in different disciplines. De Waal comments on this directly with respect to 'altruism' and 'selfishness'. For a primatologist, 'altruism' refers to any behavior with results that benefit others, and 'selfishness' refers to behavior with results that benefit the actor; intentions, motives, reasons, and feelings are not considered. But, of course, most of the other disciplines deal with what the primatologist exquisitely ignores. This is not just scientists leaving love to the poets. At stake is the nature and structure of acceptable explanations. An evolutionary explanation of altruism has to explain altruism in terms of survival benefits, which by definition makes altruism selfish. The sensations and feelings that Solomon claims underlie morality do not enter the biologist's picture--or rather, the philosopher is left wondering how they enter it. The methodological questions of explaining and doing ethics are intriguing.

If levels of explanation are to be kept clear, it is helpful to be clear on whether the morality being studied concerns altruism, co-operation, rule following, or mechanism design. Oliver Goodenough has contributed an excellent article specifically on this issue. I wish the other contributors had positioned their ideas more clearly with respect to his conceptual structure. I recommend that Goodenough's contribution be read first; and I recommend his discussion be required reading for anyone who thinks game theory has implications for ethics.

The main contribution of a philosopher to the volume comes from Robert Solomon, who examines how the Scottish moral sense school anticipated much of what is now being said by other disciplines. The key point is that most of the contributors believe that morality is the result of feelings or sensations, not rational principle. They seem to think that this view is entailed by their claim that morality is the result of human evolution; rational principles are the result of cultural evolution. The empirical evidence is thus deciding the eighteenth century debate between moral reason and moral sense in favor of the latter. I am not convinced. Unfortunately, this issue runs as a theme through many contributions; no single author tackles it directly.

Reading this book is like looking at a still from a film; all the contributors' disciplines are expanding explosively and several of these disciplines are very young. This book should be read by everyone interested in current views on morality and its role in how free markets function. This includes anyone interested in moral failure within our economy, a most important topic at the moment. However, I am afraid that this book will date very quickly. A revised edition in 10 years, even in 5 years, will show a vastly different picture.

John Douglas Bishop

Trent University