The Moral Aspect of MarketsOn March 24, the Sydney Morning Herald published an exemplary summary (pdf) of the thinking presented in Moral Markets: The Critical Role of Values in the Economy, an important collection of papers edited by Paul J. Zak and published by Princeton University Press in January.
As explained by Ross Gittins, the social and natural scientists who wrote the papers in Moral Markets argue that markets are moral in two senses:
Most economic exchange, whether with people you know or with strangers, relies on character values such as honesty, trust, reliability and fairness. And a set of shared values is essential to the functioning of modern economies.The full article is well worth reading. In just a couple of pages, Gittins provides an excellent précis of some of the key findings of the growing field of neuroeconomics.
That's the first sense in which markets are moral ... The other sense is that market exchange itself can lead to an understanding of what constitutes fair exchange, and in this way build social capital in the community. Research has shown that the values that create social capital are a potent stimulus for economic development.
"Exchange is inherently other-regarding," Zak says. "Both you and I must benefit if exchange is to occur. In this sense exchange in markets is virtuous: one must consider not only one's own needs but also the needs of another." [link added]